Employees have long loved flexible spending accounts that let them put aside pre-tax dollars for health and day care expenses.
But many forget to save receipts or have to wait weeks to get reimbursed.
Beginning this month, employees at PBB Global Logistics, which has an office in Buffalo, can avoid the hassle of claim forms by using a special debit card to pay for medical services such as prescriptions, co-pays and contact solution. The card works with flexible spending accounts, dependent care plan accounts and medical savings accounts.
"When you go to the doctor, instead of paying with a personal check or using a personal credit card, you use the Flex Convenience Card," said Melissa Kohn of Michigan-based Med-i-Bank, which developed the technology.
The card works at any doctor's office or pharmacy that accepts credit cards. No special equipment is required and the card looks just like an ordinary credit card.
However, the Flex card is programmed to work with only certain types of merchants.
"If I tried to use this card at a gas station, it would reject it on the spot," Kohn said.
PBB is the largest of about a half dozen local companies that are offering the cards to their employees as a free benefit. More than 300 employees from Miami to Los Angeles work for PBB, which offers international freight forwarding, customs brokerage, warehousing and distribution.
The company that administers PBB's benefits, ee-plan of Buffalo, is offering the Flex cards as a new option to its clients at no additional cost. In addition to eliminating paper work, employees can check their account balance at any time by visiting ee-plan's Web site.
In fact, offering the cards as opposed to claim forms has saved substantial amounts of money for companies in other parts of the country.
For every $1,000 put into the pre-tax medical accounts, employers save $76.50 in payroll taxes, according to ee-plan. But on average, about 12 to 17 percent of employees participate, Kohn said. At PBB, 15 percent of employees have pre-tax money deducted from their paycheck and put into these accounts, said Diane Locche, director of human resources.
"It's a no-cost benefit," she said. "If we get better participation, that decreases our taxes."
Having employees use a debit card rather than a claim form has boosted participation an average of 26 percent among companies using the technology, according to Med-i-Bank. A Baltimore hospital saw the number of employees participating triple over three years, Kohn said.
"I never participated in a flex plan before," Kohn said. "It wasn't worth the hassle. This year I put $1,000 in my account."