Welcome! Card Solutions & Fraud Seminar

Transcription

1 Welcome! Card Solutions & Fraud Seminar 2013

2 Agenda Welcome and Introductions Mary Murray, CTP Amegy Bank Executive Vice President, Division Executive Introduction to Cards Buddy Funderburg Jr., CTP Amegy Bank Senior Vice President, Sales Manager Credit Card Solutions Rick DeSantis Visa Account Executive, Visa Commercial Healthcare Card Solutions Rob Westra ConnectYourCare Vice President of Sales Cyber Fraud Update Mary Murray Amegy Bank Questions and Answers Closing Remarks & Door Prize Drawings 2013

3 Receivable Channel Receivable Card Types Merchant Cards - Branded business and consumer cards issued by a financial services company. This includes MasterCard, Visa, Discover, American Express, Diners Club and JCB (Japanese Credit Bureau) credit and debit. Stored Value Cards/Gift cards Open Loop Cards are bank issued Discover, MasterCard or Visa branded cards that can be used at any location where the card logo is displayed. Closed Loop Gift or credit card that can only be used at a single store or group of stores. Open Loop Closed Loop 2013

4 Disbursement Card Types Disbursement Channel Payroll Cards Stored value cards used in lieu of checks Characteristics Functions like an open loop stored value card Allows employer to stop printing checks and pay all employees via direct deposit Employee doesn t need a bank account Employee can make withdrawals from ATM machines and make purchases wherever Visa is accepted 2013

5 Disbursement Card Types Tax-Advantaged HealthCare Account Cards Health Savings Account (HSA) Flexible Spending Account (FSA) Health Reimbursement Arrangement (HRA). 2013

6 Tax-Advantaged HealthCare Account Cards Health Savings Accounts (HSA) were established as part of the Medicare Prescription Drug, Improvement, and Modernization Act which was signed into law by President George W. Bush on December 8, Congress passed the bill by one vote ( ). Definition: HSA is a tax-favored savings account individuals can use to pay for healthcare expenses. It is owned by that person, is 100% vested, and allows for investment earnings to build for future needs. A requirement for opening an HSA is that it be coupled with a qualified high deductible health plan (HDHP) that covers catastrophic medical expenses after the deductible. Characteristics: IRA-type account that must be used with a high deductible insurance plan Triple Tax advantage Tax-free contributions up to $3,250 for individual and $6,450 for family Tax-free investment earnings Tax-free payments for qualified medical expenses Funds never expire Employers enjoy payroll tax savings 2013

7 Tax-Advantaged HealthCare Account Cards Flexible Spending Accounts (FSA) were first introduced to the public in the 1970s at the same time 401(k) retirement accounts were created. While HSAs and HRAs are almost exclusively used as components of a consumer driven health care plan, medical FSAs are commonly offered with more traditional health plans as well. Definition: FSA is an employee benefit that allows individuals to have pre-tax dollars withheld from their paycheck to pay for un-reimbursed healthcare or dependent care expenses. Individuals can choose how much money they want to contribute up to a maximum of $2,500 for health care and $5,000 for dependent care. What is not used at the end of the year is lost. Characteristics Doesn t have to be used with High Deductible Medical Insurance Most plans allow for qualified medical/dental expenses and dependent care expenses Tax-free contributions up to $2,500 for health care and $5,000 dependent care Total funds for the year are available when the plan becomes effective Unused funds expire at the end of the plan year Employers enjoy payroll tax savings 2013

8 Tax-Advantaged HealthCare Account Cards Health Reimbursement Arrangements (HRA) are IRS-sanctioned employer-funded, tax advantaged employer health benefit plans that reimburse employees for out of pocket medical expenses and individual health insurance premiums. Definition: HRA is a tax-favored savings account employees can use to pay for healthcare expenses. It is employer-funded and can let employees build up savings for future needs. An HRA can be coupled with a standard or high deductible health plan (HDHP) or offered on its own. Characteristics Doesn t have to be used with High Deductible Medical Insurance Contributions are only made by employers Use the funds for qualified medical expenses - (may be limited by employer) Unused funds expire at the end of the plan year 2013

9 Disbursement Card Types Disbursement Channel Commercial Card Types Purchasing Cards (P-Cards) - Used by businesses to purchase supplies, inventory, equipment, etc. T&E Cards (Travel and Entertainment) - Cards which typically have an expense file component to help expedite and enforce compliance with the company s card policy. Fleet Cards - Issued to a company s vehicle drivers; programmed to only work for fuel and vehicle maintenance expenses. Ghost Cards - A variation of the P-card that does not involve the use of an actual plastic card. A ghost card is simply a vendor specific card number given to a specific vendor for payment. Department and Project Accounts - Each department or specific project is given its own P-card for general use. The card is linked to the department rather than an individual. Visa Payables Automation (VPA) - An electronic payment service that helps make the process of paying suppliers more efficient because you can send accounts payable files directly to Visa. 2013

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21 EMV Chip and PIN (Europay, MasterCard and Visa) Cards that contain an embedded microprocessor chip used for authenticating transactions can Comply with worldwide standard. Each transaction will include dynamic digital data. This makes transactions extremely secure and reduces fraud. EMV cards paying at an EMV enabled device can be instantly authenticated and approved through a process called dynamic authentication. When used with a PIN (Personal Identification Number), the chip verifies that the consumer is indeed holding his or her own device. These cards do not require a traditional mag stripe EMV Chip 12

22 Visa Press Release August 9, 2011 Establish a Counterfeit Fraud Liability Shift Visa intends to institute a U.S. liability shift for domestic and cross-border counterfeit card-present point-of-sale (POS) transactions, effective October 1, Currently, Point-of-Sale (POS) counterfeit fraud is largely absorbed by card issuers. With the liability shift, if a contact chip card is presented to a merchant (those that receive credit card payments) that has not adopted, at minimum, contact chip terminals, liability for counterfeit fraud may shift to the merchant's acquirer. The liability shift encourages chip adoption since any chip-on-chip transaction (chip card read by a chip terminal) provides the dynamic authentication data that helps to better protect all parties. The U.S. is the only country in the world that has not committed to either a domestic or cross-border liability shift. 13

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25 Cards and Acceptance Channels EMV Chip and PIN EMV technology is already in use in other countries, Canada, Eurozone, Latin America, and Asia. Why is the US migrating now? Fraud reduction Maintain US issued cards acceptance globally. Faster and more secure transactions across payment channels contactless, mobile, NFC (Near Field Communication), and remote payment channels. "Future Proof" network rules for growth Align network rules to speed the adoption of new tech.

26 Cards and Acceptance Channels EMV Chip and PIN Why didn t the US convert earlier? Costs- Estimated to be $8.6 billion ATMs: $500 million New cards: $1.4 billion POS terminals: $6.75 billion When will the migration occur? Liability shift to Weakest Link model- Oct 1, 2015 Some US banks with international clientele have already started 17

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48 Educational Luncheon June 20, 2013 simplify motivate execute

49 Agenda HSA Overview CDH Trends Why Use a Tax-advantaged Account? Rolling Out a Successful Program Selecting a Provider simplify motivate execute

50 HSA Overview

51 What Qualifies as a High Deductible Plan? The following requirements must be met: Minimum deductible: $1,250 individual; $2,500 family Out-of-pocket maximum (includes deductible): $5,000 individual; $10,000 family No services paid for prior to meeting deductible (except for preventive care) No deductible required for preventive care For family coverage: family deductible must be met before any reimbursement can be made No prescription drug copayments Higher limits allowed for non-participating provider services simplify motivate execute

52 Tax Free Triple Tax Advantages of an HSA Health Savings Accounts offer three key tax benefits. 1. Tax-free contributions to your HSA 2. Tax-free earnings from interest and investments in your HSA 3. Tax-free payments from your HSA for qualified medical expenses $ Contributions $$ Interest Investment Earnings $$$ Qualified Medical Expense simplify motivate execute

53 Investing with an HSA Investment options vary by custodian and typically include a variety of fund families to choose from. Initial investments minimum can be as little as $1, or as high as $1,000 HSA dollars typically can be set up to be automatically transferred into, out of, or within a selection of mutual funds with the schedule set by the account holder Additional investments can be added online, at any time Most Custodians offer a comprehensive suite of tools is available online to help the account holder select investments and expand their investment knowledge simplify motivate execute

54 Mobile Applications Convenient, secure access: Eliminates the receipt hassle with instant camera upload Real time access to account balances and claim information Pay providers with just a tap Account alerts give real-time advice Fast access to expert support Smartphone app for Android, Windows and iphone Two-way texting Streamlined portal for all mobile phones iphone(r) is a registered trademark of Aple Inc. Android(TM) is a trademark of Google Inc. Use of these trademarks are subject to Google Permissions. Windows(R) is a registered trademark of Microsoft Corporation in the United States and other countries. simplify motivate execute

55 Healthcare Accounts Trends

56 HSAs Cover Millions of Americans HSA coverage jumped to 13.5 million Americans. Source: 2012 AHIP Annual Census simplify motivate execute

57 CDHPs Nearing HMO Levels Enrollment in Consumer Directed Health Plans (CDHPs) grows sharply in CY 2012, narrowing the gap with HMOs. Percent of all covered employees enrolled in each plan type CY 2012 Traditional indemnity: 1% PPO / POS: 65% HMO: 18% CDHP: 16% Source: Figure 5, Mercer s National Survey of Employer-Sponsored Health Plans

58 CDHP Adoption Employer Offerings Employer size employees 5% 16% 18% employees 6% 18% 21% 1,000-4,999 employees 12% 24% 29% 5,000-9,999 employees 18% 39% 41% 10,000-19,999 employees 21% 41% 43% 20,000 + employees 37% 51% 53% Source: Mercer, National Survey of Employer Sponsored Plans (2010) simplify motivate execute

59 Why Use a Tax-advantaged Account?

60 Key Employer Trends Through 2014 Respond to health reform, incentives, taxes and exchanges Cadillac Tax % Excise Tax on the cost of benefits exceeding the applicable cost limits ($10,200 for individual coverage and $27,500 for family coverage). Increasing benefit costs trend at 7-10% Cost shift to employees and employee affordability Focus on workforce behaviors: health, productivity, saving Elimination of non-core benefits to pare cost offer voluntary Reduce DB plans including health trend to DC, funding of HSAs, HRAs and incentives, or full DC and exchanges really! Eliminate retiree medical funding simplify motivate execute

61 Lower Costs with HSA-Based CDHPs In 2012, HSA eligible CDHPs cost approximately 20% less than other medical plan types. Medical plan cost per employee (includes ER HSA contributions) Drop in medical cost per employee of 20% for HSA with CDHP Decreased costs even with slice offering Source: Figure 7, Mercer s National Survey of Employer-Sponsored Health Plans

62 Cost Comparison PPO vs. HSA Traditional PPO Plan Total Out-of-Pocket Costs $1,000 Deductible per PERSON 80/20 Coinsurance HSA PPO Plan Total Out-of-Pocket Costs $5,100 Deductible per FAMILY 100% Coverage Thereafter Annual Paid Premiums $10,200 $6,900 HSA Deposit/Contributions N/A $4,500 Monies Paid to Your Physician & Other Providers ($2,500 Claims) HSA Balance at 1st Year's End Tax Savings on Your Premiums (assumes 28% tax bracket and premiums 100% tax deductible) Tax Savings on HSA Deposits (assumes 28% tax bracket) $1,780 Paid from HSA N/A $2,000 ($4,500 - $2,500) $2,856 $1,932 N/A $1,260 Total Out-of-Pocket Costs $9,124 $6,208 simplify motivate execute

63 Rolling Out a Successful Program

64 Keys to Successful Deployment Multi-year transition plan Support from senior management and key employees Plan Design Financial incentives to join No other options or less attractive options to HDHP Top down communication and education plan Emphasize key benefits of HDHP Pre-tax savings opportunity Rollover feature of HSA Portability Interest and ownership Flexibility and control of health care dollars

65 Keys to Successful Deployment (Continued) Set a goal for enrollment e.g. 50% HDHP 50% non-cdh Various media communications s Face-to-face and web-based meetings Individual consultation during Open Enrollment Unique incentives Benefit payment holidays Money back guarantee Custom Product Investment solutions Employee empowerment in paying claims HSA Advance simplify motivate execute

66 Successful Transition Key indicators of successful deployment of HDHP / HSA Engaged employees Understanding of what their out of pocket costs are and how to effectively manage Enjoyed savings in premiums, control of dollars and flexibility No mass exodus of employees Decreased employee dissatisfaction simplify motivate execute

67 Conclusion Provider Considerations

68 What to Look for in a Provider Robust Communication Support Flexible & Scalable Platform 24x7 Customer Support Multiple claims submission and reimbursement options Debit Card which stacks multiple accounts Independent - integrate with any medical, pharmacy, dental or vision provider Strong Investment Options simplify motivate execute

69 Fraud Update Cyber Fraud Activity Hacking Distributed Denial of Service Attacks Fraud Protection Dual Control Trusteer Positive Pay ACH Positive Pay 2013

70 Questions? 2013