As a Senior Account Executive, Jim Meduna is responsible for employee benefits products at Visa. He discusses the need for FSA and HSA education, saving and spending trends with health care benefits accounts, and the future of digital wallet technology. He also shares his optimism and hope about what could happen post-Covid.
Carla: Hello, I'm Carla Wardin and I'm the host of the "ConnectYourCare Podcast, Exclamation of Benefits." Today I'm speaking with Jim Meduna, senior account executive at Visa. Hello, Jim.
Jim: Good morning and how are you?
Carla: Good. Thanks so much for being on the program.
Jim: You bet.
Carla: So, I'd like to hear about your job and what you do at Visa.
Jim: Absolutely. Well, thanks and thanks for having me on today. I've been at Visa, it'll be now 13 years in March. And I've always been responsible for our employee benefits products. And by responsible, that means account relationship management, new business development, etc. Prior to Visa, I was 17 years with a processor. I'm based in the Midwest, actually based in Omaha. And the last four and a half years of those, I was on their healthcare team. So, I guess I go back a long way. In fact, helped convert on ConnectYourCare onto offering a card way back when, in about 2004 or 2005, somewhere in there...
Jim: Also with Visa, I represent us on the SIGIS group, special interest group for IIAS merchants. I sit on the board of the HSA council and also the East CFC. So, as part of my job here at Visa, not only do what I talked about earlier, but I'm responsible for representing us in those organizations and promoting the products that my partners promote.
Carla: Great. Well, it sounds like you are well versed in this industry. And thanks for your help with ConnectYourCare back in 2004, 2005. What I'd like to talk about today is saving and spending trends, particularly in FSAs and HSAs. For FSAs, does Visa see an uptick of spending activity this time of year, or do you see people saving, or what do you see?
Jim: Yeah. And as we know, this year's not a normal year...
Carla: It's not.
Jim: ...by any curve to the imagination. That's an understatement. You know, we're starting to see the last two to three months are leveling off to where they were last year. So we're starting to see that come back. Because obviously there were some big impacts, just because individuals were not able to get treatments. They weren't able to go in and see their physicians, etc., or have those elective surgeries. So we did see a dip. And then, we've started to come back and we're going on, I think it's about month 3 or 4, and we're pretty much break even a little bit ahead of where we were. What you do see normally though with FSAs, it's tested over time. You'll see the first three months of the year are the biggest spend. It's the huge spend and then it dips down. And then at the end of the year, it comes up as people are trying to use up those last dollars that they might have in their FSA account.
Carla: Do you think that account holders are generally aware of the policy by using FSAs at the end of the year or is it the opposite, there's more education needed in the area?
Jim: I think education is always needed. I think they're getting somewhat better but the lines are so blurred between an HSA and an FSA many times. Because many of our partners set up their programs to look like an FSA, meaning restrictions to go to healthcare MCCs or merchants only. And then if you're not at a healthcare merchant, you're going to a physician...excuse me, not a physician, but a pharmacy or a non-healthcare merchant that uses auto-substantiation, meaning only the items that can be of purchase...and what I mean by that is the 213(d) eligible item list are purchased. So it gets a lot more blurry, so it gets confusing. We had done some research just about a year and a half ago, and education was probably one of the key things. We sat behind mirrored glass and listened to individuals, and it was funny because I could tell where they had their accounts at based upon how they were talking, how they worked. And there was a lot of confusion and education is more important than ever as we continue on and the products become more and more important to the average consumer.
Carla: How could you tell by listening to them? What kinds of things would they say?
Jim: They would say things like, "Well, my account works like this. I can go anywhere I want and I can even withdraw cash." And obviously, that could only be an HSA. And then the other one would say, "My HSA, I can't do that. I can only use it at healthcare MCCs." And then, the next HSA customer would say, "I can use it anywhere and it doesn't stop me at all." It was funny. You could just tell who had set up a program to look more like an FSA than an HSA.
Carla: For someone who's listening and doesn't know the difference, do you have a really easy way to tell them?
Jim: I'll try to keep it simple. You know, with an FSA, obviously, it's a standard healthcare plan. It's not a high deductible, although those lines are getting a little blurry so that makes it difficult now too because the deductibles will continue to go up. So you have to have a traditional healthcare plan. Also when you... And you can only get it through your employer. ConnectYourCare would be one who would administer for your employer. And then, Jim Meduna sets up, I want to set aside $1500 for my family, it's there on day one, and then you pay it back gradually through payroll deduction over the remainder of the year.
Where in HSA, unless your employer is contributing to your account, you have to build up the funds. And it is only available with a high deductible healthcare plan. So the individual will have to watch out for that. But then, that administrator, that program has flexibility on how to set it up. You can set it up wide open to be just like as free as you can be with the individual saying that they've just got to be able to prove they made those medical expenses. Or like I mentioned earlier, you can set up as strict as only allowed in healthcare merchants, plus if you're not at a healthcare merchants, they have to do the auto substantiation process. Hopefully, that helps you give some ideas of the difference between the two.
Carla: I feel like you've explained that before. That was pretty much perfect. Nicely done.
Jim: After years and years, I better have it down.
Carla: I saw in 401(k) Specialist today, that among consumers with HSA, 69% use their accounts to pay for current expenses and 67 percent of account holders view their HSA account as a savings account. When you talk to people about using HSAs as a saving account or using it as an expense account, how do you frame it? What do you tell people about it?
Jim: Well, I tell people, I try to refer back to some of the studies that say what we're gonna need in retirement for healthcare. You know, it depends on what study you look at. It could be $265,000 or $365,000 you're gonna need in funds for healthcare expenses in your retirement. So what I tell them is, "Yeah, there's going to be times when you need to maybe dip into your HSA." But the long-term goal should be savings, it should be putting away those funds. You've got some great advantages there as far as taxation, etc. But you need to look for your future. And again, like I said, you run into bumps in the road and that's why you have the funds. But also, you need to be thinking about this as a retirement vehicle, like, right alongside your 401(k) or your IRA.
Carla: For going alongside with things like that, how do people pair those? Is this something that you see at Visa too - and talk about?
Jim: Yeah. You know, it's interesting. As a company that obviously is all about payments, we have a great participation rate in our HSAs and FSAs. We have both types of health plans here within Visa, and we're very fortunate. We're also very fortunate that Visa helps fund those accounts or give HSA holders money to take care of those first hit expenses. But when I talk to our partners as well, you know, it's been interesting to watch. I mean, people, savings isn't at a great rate yet, but it's increasing. And it's going up over time. And, you know, companies like ConnectYourCare are trying to offer all the flexibility they can and encouragement on how those funds can be invested, and how they can be saved so that you have that money later on for retirement.
But it is interesting talking either to employees, like I'll get calls internally here at Visa to talk about the cards themselves, or I should say the accounts themselves, and to understand how they work, and how they don't work, and what they can do, to just talking to friends out there in the market that might maybe have questions about the account, etc, and then, of course, partners like ConnectYourCare. We're seeing more and more interest, but man, we've got a long, long way to go with education, understanding, and really, by understanding, I mean understanding the benefits of the products and how they can truly help you now and in the future.
Carla: More understanding on the way, speaking of terms that people might want to know more about, one of those is the whole digital wallet concept. Can you talk about the fundamentals of that and payment trends and how that is working for us?
Jim: Absolutely. Well, and we can go back to COVID too again. You know, obviously, people are concerned now about holding currency or, you know, when even at the point of sale device. So what you have now, we are...more and more partners are launching digital wallets. So that means you store your FSA account number or your HSA account number in one of the wallets. That could be Google, it could be Apple, etc., you can store it. So then, when you're going to the merchants, and by the way, more and more and more are accepting them, you can go ahead and just tap your phone.
The other thing that is gaining significant popularity, and it's funny because the U.S. is behind the rest of the world, but is tap to pay for cards. So the most preferred method is to actually have your card available and tapping it. I know my family is sick and tired of me when we go to a fast food place or somewhere else and I try to tap in. And they'll say, "Oh, it doesn't work." I say, "Oh yeah, it does. Here's where it is. You just go ahead and put your card right here. And if you have this little emblem on there, it'll work." And what we've seen is large increases and changes, you know, that are occurring.
And not only those changes with contactless, but also with online shopping. Because the pandemic again, we're seeing more and more, you know, at the pharmacies and things like that, ordering online or, you know, having recurring charges or recurring prescriptions set up and things like that. I think we're seeing a trend and we're seeing a change, a fundamental change that I think will continue. Because once you get someone used to a digital wallet, or a tap to pay, or a card on file, they like it, they're used to it. It's just like, you know, what we're seeing this year with shopping in general. I mean, you're seeing those who would have never done an online purchase are doing it now.
Carla: I'm really surprised that your family is tired of that. I think they should appreciate how progressive you are.
Jim: You're not my son. You get real tired of it. Anyway.
Carla: Oh yeah. Parents and kids. You're right. They never appreciate that. In talking about the future and the upcoming new year, which we all hope is super promising, what kind of trends do you see coming up? What do you think the future is holding?
Jim: You know, I'm trying to be very optimistic about '21 in the respect that, you know, we're gonna go back to some sense of normalcy. Obviously, with the approvals that are here or just right around the corner for a vaccine, I think it's gonna make a world of difference. Now, I am concerned as I listen, you know, with the individuals that say they won't take the vaccine. But, you know, and I understand everybody's concerns and things like that, but I think this is giving us some hope and allowing us to be optimistic, which we haven't had for a while now.
You know, it's been very difficult as we've all had to change our lives. I mean, we've had to adjust to not seeing people, to not getting together to, you know, the way we communicate is Zoom or Teams or whatever method. And it's taking a toll on individuals. So I see the vaccine as a sign of hope. And I see, you know, if they can distribute it, I think we're gonna have a good 2021 later on in the year. It won't be right at the beginning. We gotta get more vaccinated and get people feeling secure again and we open up, you know, are able to open up the economy and open up businesses. But I have a feeling that last half of '21 is going to be pretty optimistic, at least that's my hope.
Carla: I like that hope. I appreciate that very much. What do you have planned at Visa for the rest of the year?
Jim: For the rest of the year, we're working actually, ironically, on a couple of contracts, so you know, keeping busy with that world, trying to work up some new product ideas. And we've been helping with some partners who are launching, as you mentioned a little bit earlier, wallets. So we've been busy helping them in the final stages of getting those launched and ready to go out there for the market. As for next year, you know, we're going to continue to support the market through all lobbying efforts. You know, I talked about the various groups that I sit on the boards, but also we have our GR team who is out there working. They reside in DC and are very active in promoting and being a watchdog for the employee benefits products. So we're going to be actively involved with the new administration and how they're supporting these products, and how can we expand the use of the products.
And then, technology. We're going to be looking to provide our partners with different ways to help make the products more mainstream. And I wanna caveat that because our products are funny because they're different. The main product is the FSA or the HSA. It's not the card piece of it or the payment piece on there. It is what the host account is, or it's the HSA, it's the savings for your healthcare expenses, it's the FSA having that through your employer to go ahead and have those available. But now, we're trying to make it so it's more mainstream, that you have regular...you think of your HSA card or your FSA card just like you do your credit card or your debit card. And you look for those features, and functionalities, and payments that can give you real-time satisfaction or real-time reimbursements, or the ability to, you know, see that information online immediately, or like we talked about earlier, doing a tap to pay, or doing a wallet payment, etc. So we're gonna be really continuing to push those efforts in 2021.
Carla: That's great. All the new technology and an internal optimist to boot. I really appreciate it.
Jim: You bet. Right now, we gotta keep optimistic. You know, I admire, you know, Visa itself and I know companies like ConnectYourCare have really paid attention to their employees and their mental health, and they know how important it is. So kudos to all the employers out there who are really taking an interest in their employees as you go through some really unsettling times and a big change in the way we lead our lives.
Carla: Yes. Kudos to them and kudos to you. Thank you so much for being on the program. I really appreciate it.
Jim: Absolutely. It was a pleasure and I wish you a very happy and, of course, a healthy holiday season.
Carla: Once again, my name is Carla Wardin and this has been the "ConnectYourCare Podcast, Exclamation of Benefits," and I'm speaking with Jim Meduna, senior account executive at Visa.
Carla Wardin is the host of the ConnectYourCare podcast, Exclamation of Benefits. Carla brings her broadcasting and technology experience to talk to experts about the latest innovations in the benefits industry. Carla is an author, speaker, and marketing communicator from Michigan, where she and her husband are raising three boys on a dairy farm.