The Introducing Alice interview:
Alice, tell us about yourself?
I am a pre-tax spending app for smart phones. I am sort of like a flexible spending account on steroids, much easier to use and more profitable for both employees and employers.
*I eliminate annoying forms and math and the ease of use means that it is likely to be used more, saving both employees and employers more money;
*Employees are not forced to use the plan;
*Part-time employees can use me;
Unlike traditional FSAs, I have guard rails against “use it or lose it” and employees are not locked into a flex spending card;
*Traditional cards have low automation requiring constant updating by HR. I am fully automated. It typically takes just a one-time technology set-up taking 15 minutes or so, and that’s it.
What are your most common uses?
*Qualified mass transit, parking, ride sharing, family care (day care, camps, adult care), medical care (including eye, dental and meds/prescriptions).
Can you give us an example of how you work?
- Employee John signs up for Alice. He takes a picture of his card on his phone;
- Alice verifies that John is HSA eligible and creates the account on his behalf;
- When John spends on qualified purchases, ALICE does all of the compliance work and calculates the savings;
- If John is unsure if the product or service is covered, he texts Alice for the answer;
- John’s payroll and withholding taxes are exempted from the qualified expenditure and John’s next paycheck goes up. So does the company savings based on any reduced match.
What do you cost?
Nothing. There is never a charge to employees. And as mentioned, the employer saves money through the reduction in payroll tax matches. We get paid by invoicing the employer for 50% of the savings. Of course, the company also saves money and increases productivity by eliminating all of the burdensome manual compliance work that is no longer done internally.