Health and wellness-focused FinTech Flex raised $3.2 million in seed funding.
The new financing will help the company with its mission of offering direct-to-consumer health and wellness brands an easier way to accept health savings account (HSA) and flexible spending account (FSA) payments online, according to a Wednesday (Sept. 4) press release.
“Flex will use the funding to accelerate product development and sales and marketing, and to capitalize on strong interest from brands in capturing more of the $150 billion in potential annual HSA/FSA spending,” the release said.
Online acceptance of HSA and FSA payments has been difficult because of the need to substantiate each item’s eligibility “on the fly,” meaning that only companies the size of Amazon and Walmart have the resources to create their own systems to process HSA and FSA payments online, per the release.
“Smaller merchants have been unable to leverage consumers’ desire to spend their HSA/FSA dollars online,” the release said. “Consumers instead must pay out of pocket and submit itemized receipts to their FSA provider seeking reimbursement. The difficulty of that process means consumers often purchase their products elsewhere, from merchants who make the process easier.”
Flex differentiates itself by offering product verification during checkout and “the ability to confirm the eligibility of dual-use items, issuing Letters of Medical Necessity, and handling split tenders — orders that include both eligible and non-eligible items,” Flex co-founder Sam O’Keefe said in the release.
In other healthcare news, PYMNTS spoke last week with PatientPay CEO Tom Furr and ClearGage CEO Ryan Zemmin about the way digital innovations are improving the patient experience in healthcare billing and payments.
“We are trying to digitize a pretty paper-based system, which is how most healthcare bills are sent out,” said Furr, whose company had just merged with ClearGage. “Forty-five percent of bills in healthcare are sent through paper statements, and outside of healthcare that’s not the norm.”
Furr attributed the persistence of paper billing to the complexity of healthcare payments and the difficulty of leaving behind long-held practices.
Although the pandemic accelerated the shift toward digital solutions as healthcare providers faced pressure to maintain efficiency, the macro backdrop has left healthcare systems struggling as costs rise and government support fades, the report said.
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