drugstore.com, WageWorks Partner to Simplify FSA Shopping Experience

BELLEVUE, Wash. and SAN MATEO, Calif. - drugstore.com, inc., an online provider of health, beauty, vision, and pharmacy products, and WageWorks, Inc., a provider of consumer-friendly employee spending accounts for health care and dependent care, have joined to enable automatic verification of flexible spending account (FSA)-eligible purchases made using the WageWorks Health Care Card at the drugstore.com online store.

The arrangement provides WageWorks' health care account participants with a convenient shopping experience at drugstore.com, inc. and increases the availability of paperless substantiation of FSA-eligible purchases.

The program works like this: FSA-eligible products are tagged at the online store with a special icon to help eliminate confusion about which types of over-the-counter purchases are generally eligible for FSA reimbursement.

When a WageWorks customer shops online at the drugstore.com Tax Advantaged Online Store, eligible and ineligible products are automatically separated during the checkout process. FSA-eligible purchases are then applied to the customer's WageWorks health care spending account through his or her WageWorks card, and the customer is asked to provide another form of payment for ineligible products.

Such a program can develop tremendous benefits to consumers, Jeff Kimmell, v.p., health care services, and chief pharmacy officer of drugstore.com, told Progressive Grocer. "Only about one in five consumers with a flexible spending account actually take advantage of these pretax benefits," he said. "Recent tax code changes making certain OTC purchases eligible for FSA reimbursement, combined with the convenience of technology, are creating renewed interest in this once-sleepy benefit. With innovations like preloaded FSA debit cards and online FSA stores, it's now a lot easier to use a flexible spending account. There's very little, if any, paperwork if using an FSA partner card at the drugstore.com store. There’s little guesswork about which products are FSA-eligible."

Plus, he added, there's no more rummaging through purses or glove compartments for receipts, and then waiting for reimbursement. Today it's much easier for consumers to use up their balance by the end of the year, which helps to increase overall satisfaction and participation in next year's FSA benefits program.

Kimmell points out, however, that such a program is much more difficult to deliver in a brick-and-mortar store than online. "drugstore.com, inc. is one of the first retailers to offer a special FSA store and relationships with several card providers, including WageWorks, Motivano, and Evolution Benefits," he said. "While the cards can be accepted at almost any store, online retailers like drugstore.com, inc. have the advantage of being able to clearly delineate eligible products -- so there's no guesswork involved. Brick-and-mortar stores would have a tougher time earmarking each eligible product on their shelves."

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