Top Five Things to Know about Healthy Benefits Cards

By: Krystal Register, MS, RDN, LDN, Vice President, Health & Well-being, FMI

Consumers across the country are gaining access to healthy benefits as dollars to spend on their overall health and well-being. These "healthy benefits" are made available through public and private funding and are delivered in varied ways as part of many different programs. Consumers seem to appreciate these extra incentives aimed at improving overall health. (NOTE: Use of the term "healthy benefits" here is in reference to these collective programs and services.)

While some of these programs have been around for many years, the multi-billion-dollar market for healthy benefits is growing fast. As new opportunities rapidly emerge, retailers are seeking ways to understand the entire ecosystem in order to accept various cards, partner with payers and processors, carry products and services covered and ultimately provide seamless solutions for customers.

Programs

In addition to programs funded by the federal government, insurers and employers are expanding healthy benefits offerings. Programs and their sources of funding include:

• SNAP/WIC - federal government (includes GusNIP)
• HSA/FSA/HRA - individuals and employers
• Medicare Advantage - health insurance payors (may receive government funding as well)
• Nascent programs* - government, insurance payors, non-profits, employers, others

*These include Medicaid waivers and food as medicine programs such as food prescriptions and medically tailored meals.

Ecosystem

The general ecosystem puts the consumer at the intersection of healthcare providers and insurance payers, government, retail and many others to include non-profit organizations, employers and issuers. The flow of information, programs, funds, prescriptions, products and services is complex and competitive.

Products and Services

In general, benefits are intended to promote preventive care, wellness activities and overall health improvement. Consumers can spend their benefits on various health-related products and services depending on the program. Examples can include over-the-counter items, select groceries, medical devices, counseling services, nutrition education, fitness equipment, pet food, household supplies, gas, transportation, utilities, etc. Spending can also be restricted to certain products or connected to approved lists.

Challenges

There are many potential challenges in this complicated ecosystem, particularly in the areas of: enrollment for the customer, activation of the card, data security, knowledge of available benefits and what items are on an approved product list, retailer acceptance of the card at the point of sale, technology limitations, and troubleshooting with the right entity when a question arises.

Opportunity

There is a growing opportunity for retailers to connect with food as medicine interventions that provide a combination of medically tailored meals, produce prescriptions, food boxes, personalized counseling and other services intended to prevent or manage disease. Healthy benefits programs are multiplying, and the local grocery store has a supportive role to play. Retailers can champion the growth of these programs while building customer loyalty as a destination for health and well-being in the communities they serve.

To better understand the complexities and opportunities, FMI has partnered with Oliver Wyman to create an on-going series of resources for members. The foundational materials from 2023 include a recorded digital seminar: Understanding Healthy Benefits Cards and white paper titled: How Accepting Healthy Benefits Support Customer Wellbeing.

Continuing to build on this foundation, a follow up digital seminar specifically explored funding pools and accelerated growth. Additionally, Oliver Wyman and FMI have partnered on a white paper to provide examples of publicly and privately funded programs and actionable strategies for retailers to take advantage of this growing market. These resources are available to FMI members.

Download the White Paper     Watch the recording

For Reference:

SNAP = Supplemental Nutrition Assistance Program
WIC = Women, Infants, and Children Program
GusNIP = The Gus Schumacher Nutrition Incentive Program
HSA = Health Savings Account
FSA = Flexible Spending Account
HRA = Health Reimbursement Account