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Columbia-Based Startup Takes the Sting Out of High Deductibles

By Inside Columbia
Paytient founder Brian Whorley developed the concept for Health Payment Accounts after a decade in hospital finance.

Photo by Scott Schaefer

Like most employers, Angy Littrell was faced with a difficult choice. Littrell, CEO of Fitzgibbon Hospital in Marshall, Missouri, wanted to offer a robust benefits package that would help attract and retain highly qualified employees, but any new offerings had to be fiscally smart for the business.

“Recruitment and retention are challenges across the country in all organizations, but especially in health care,” Littrell says. “Our organization is always looking for value-added benefits for our employees and ones that are affordable for the organization.”

As both the leader of a medical facility and an employer trying to address the health care needs of her staff, Littrell fully understands the pain points. She found the win-win solution she was looking for with an innovative benefit called a Health Payment Account (HPA).

America’s health care system and the employers who help their employees access it are feeling the stress of inflation coupled with the residual financial fallout from the COVID pandemic. According to a recent Mercer poll, health benefit costs are expected to increase 6.5% for U.S. employers in 2023, to more than $13,800 per employee. This projected increase is more than twice last year’s 3% increase — and employers should expect accelerated increases in 2024.

As a result, employers are bracing themselves for the steep cost increases expected to hit the health care industry in the next 24 months and looking for ways to reduce the burden on their employees. Several options are available: moving employees to a high-deductible health plan, instituting health savings accounts and providing individualized guidance
to employees to help them select the most sensible health care plan for their situation.

The innovative Health Payment Account option, developed by Columbia-based Paytient, is proving popular with both employers and employees because it addresses the unique needs of both.

An HPA helps workers pay out-of-pocket expenses over time, which makes the transition from a low- to high-deductible plan more practical and less painful. Employees can easily access funding — what Paytient calls “an allowance” — but are never burdened with fees or interest. In fact, there’s not even a credit check.

HPAs differ from traditional Health Saving Accounts (HSAs) and Flexible Spending Accounts (FSAs) in that they are employer-sponsored benefits that provide short-term funding for employees to pay for unexpected or out-of-pocket medical expenses.

HPAs are the brainchild of Paytient’s founder Brian Whorley, who developed the concept after a decade of working in hospital finance. He had seen firsthand how medical bills overwhelmed individuals and families who struggled to afford care. He recognized an opportunity to help by creating an employer-sponsored plan that allows employees to cover out-of-pocket health care expenses without incurring hefty fees and interest.

Through Paytient’s HPAs, employers offer employees a small line of credit, typically $500 to $5,000, accessible via Visa cards that can be used to pay everything from out-of-pocket medical, pharmacy, dental and vision expenses — even veterinary expenses for their pets.

“HPAs complement health plans, remove financial barriers to care and enhance existing health care financing tools, including insurance plans, gap products, indemnity products and HSAs/FSAs,” Whorley says.

Tom Kayser, a benefits consultant with Sundvold Financial, recalls a time when he was the bearer of bad news to his client’s 120 employees, telling them their annual deductible would double in the coming year.

“I could sense the frustration and anger from the employees,” Kayser says. “The next presenter was Brian Whorley of Paytient. He informed the employees that Paytient would give them an interest-free way to cover the difference in their out-of-pocket costs. To my surprise, he received a standing ovation from the employees at the conclusion of his presentation.”

An HPA is used primarily as a form of short-term liquidity, not as a source of long-term debt. Employees use their HPA Visa card to pay for out-of-pocket care costs, then set up personalized, interest-free repayment plans that extend over time, usually between 12 and 36 months. Employers set the limit for the cards they offer to line up with deductible exposure.

Companies that have added Paytient to their employee benefit offerings find it remarkably easy to set up. And although employees are expected to pay back this interest-free debt, Paytient does add a layer of protection for employers; they are never held responsible for employees’ unpaid balances.

Paytient’s Pet Project

Paytient’s Visa cards can be used to pay for the categories of health care most people would expect, but there’s one category they may find surprising: veterinary care.

“We were programming Paytient back in the day,” CEO Brian Whorley says. “My sister has a basset hound named Baxter, and he’s definitely a part of their family, but unfortu- nately, he had a serious eye issue. She asked, ‘Could Paytient someday work for vet care?’ I was like, ‘We could do that today!’ and it’s been such a crowd pleaser. In 2022, 7% of our employee transactions were vet-related.”

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