With so many Americans living paycheck to paycheck, getting reimbursed for expenses faster can make employees happier and more engaged with a benefits program.
It’s a frightening fact that many Americans are chronically short of money. Seventy-eight percent of U.S. workers live paycheck to paycheck.1 And it’s not a situation limited to low-income workers. Of workers who make at least $100,000 a year, one in ten also lives paycheck to paycheck.2 Perhaps even more frightening is that 57% of American have less than $1000 available to them for an unexpected need or an emergency.3
With money so tight, unplanned expenses are extremely stressful. And they crop up every day. In 2019, one in three homeowners were faced with an emergency home repair at an average cost of $1206.4 Car repairs are another big-ticket item. When you take in to account that the average car in the United States is about twelve years old, and that more that 81% of the disabled cars AAA tows are ten years old or older, it’s easy to imagine how many of us face an unexpected auto repair every week.5
Unplanned healthcare and dependent care expenses are also facts of life. Often there are out-of-pocket expenditures for copays, out-of-network urgent care or emergency care, last-minute sick childcare, etc. Employees in your company’s benefits program might have HSA, HRA or FSA dollars accrued to help take the sting out of these expenses. But with money so tight from week to week, many aren’t able to “float” out-of-pocket money while waiting for their benefits administrator to reimburse them.
And reimbursement time depends on several factors. The slowest reimbursement is by check at ten (or more) business days. ACH (bank direct deposit) reimbursements are faster, but can still take about 3 business days after requests are made because the funds have to go from the administrator through the Federal Reserve system and then to the employee’s financial institution.
This lag time is an important consideration when employers are selecting a third-party administrator (TPA) for their benefits program. The benefits that are going to feel the most like benefits to your employees are the ones that deliver as promised and cause them the least amount of stress and inconvenience. In other words, when it comes to benefits reimbursement, faster is better.
If you’d like to optimize the turnaround time for reimbursement, consider a partner that offers a faster alternative to the average three-day turnaround. TASC, for example, offers the fastest reimbursement in the market with MyCash, which allows funds to go to a participant’s benefits card almost immediately, typically within a day, after the request is received and processed. The money sent to the employee’s MyCash account can be accessed by using the benefits card as a conventional debit card. In other words, with the MyCash feature, your employees can use their benefit card both for covered benefit-related expenses and for whatever immediate need they have, including groceries, gasoline, new soccer cleats for the kids or to pay for that unexpected visit from the plumber. By helping them get their money faster, you’ll have happier employees and a more successful benefits program.