October 16, 2024 | By Paroma Sen
First Published by HRTechSeries
With inflation and rising costs of healthcare, it is crucial for businesses to offer employees a more wholesome financial care experience; Augusto Ruiz-Eldredge, COO at TempoPay (acquired by PayMedix) chats about these nuances with HRTech Series in this catch-up.
Hi Augusto, tell us about yourself and your time in the tech/HRtech market?
I’ve spent over two decades building companies from the ground up, specifically focused on unique financial products that serve under-represented communities and customer segments. During my time at EquiPay, we served hundreds of historically underserved merchants with access to equitable and affordable payment solutions.
Having worked so closely with the unbanked and underbanked in the cross-border payments space, I’ve witnessed a system that often overlooks their basic financial needs. The Federal Reserve has found that 46% of traditional credit applicants with an income below $50,000 were denied credit or approved for less than they requested. That denial rate is higher among black and Hispanic families, regardless their income level.
I joined the founding team at TempoPay in 2022 because there is an acute need for new financial solutions that help employees stay physically and financially healthy. Facilitating access to non-predatory financial support is critical to unlocking the potential of this hardworking population.
We’d love to hear about HPS/PayMedix’s recent acquisition of TempoPay and how it will change the game for end users.
TempoPay was acquired by PayMedix in August 2024 at a critical time. Rising healthcare costs, inflation, and inequity continue to plague employers and employees. Both TempoPay and PayMedix have carved out significant roles in creating healthcare financing and payments solutions that provide zero-interest financing for employees without any credit requirements. Together, we have created a comprehensive, end-to-end payments solution for the marketplace.
As background, TempoPay offers all employees interest-free financing for health and well-being care. Once activated by the employee, TempoPay can be used to pay for everything from medical care and prescriptions to vision and dental bills; even vet bills and other health and wellness-related costs not fully covered by a health plan. Employees can repay their bills over time interest-free via payroll or bank account.
While TempoPay provides financing for everyday expenses, PayMedix provides complete, uncapped financing for all allowed in-network charges that any employee may owe to providers and is automatically applied as a benefit through participating employers. Providers, in turn, are simply paid the full employee balance automatically and can remove themselves from the business of patient billing and collections.
The result is that with TempoPay and PayMedix, employees now have access to capital when they need it so they can take care of themselves and their families without worrying about how to pay healthcare bills in full. This helps them avoid tapping into personal loans, high-interest credit cards, crowdfunding, or hardship withdrawals from their retirement accounts, and they will feel more confident about accessing care when they need it, not when they can afford it.
This is a game-changer for employers that want to reinvigorate their benefits offerings to meet the needs of their entire organization, not just a small percentage.
Why are better payment capabilities especially needed when it comes to healthcare becoming more crucial for employees?
Higher healthcare costs have forced many employers to shift health plan costs to employees over time, and its hindering access to care. The cost of healthcare has risen so dramatically that everyone within the system is feeling the effects. For instance, the average annual premium cost to employers for a family in 2023 was $17,393, a 46% increase since 2013. You have employers paying for health insurance that their employees may not be able to use, compounding the existing unaffordability and employee disengagement.
Everyone deserves access to healthcare equally and to understand what their care entails. According to the PayMedix Healthcare Payments and Financial Disparities Study, one-third of Americans say out-of-pocket costs and deductibles are unaffordable. This figure increases to four in ten for those with a credit score of 669 or less. Further, more than half of insured Americans said that paying for medical bills has been stressful, with nearly all of them claiming the stress has affected their physical and mental health.
So, we have an expensive and confusing system that’s creating additional costs, administrative burdens, and worse health outcomes. By offering simplified and streamlined payment processes that don’t accumulate interest, we can strip away the complexity of paying for healthcare and remove financial barriers to care.
What are some of the top financial barriers to healthcare that plague employees today that employers should support more with?
Rising healthcare costs have become a disproportionate share of the American family wallet, and employees need better solutions to manage the stress this puts on their budgets. Out-of-pocket costs are a problem and the inability to address them has had lasting effects on the entire system.
Four in ten people report avoiding or delaying care due to the cost. Avoiding care leads to additional costs as people enter the healthcare system later and sicker, seeking care through means like in-patient hospital care or emergency facilities which are notably more expensive. By providing their employees with access to funds at the time they need care, employers can provide support through effective benefits that remove these financial barriers.
Simply helping employees pay for everyday health and wellness-related expenses can go a long way toward maintaining a healthy and engaged employee base. Employees can use their TempoPay VisaⓇ card to pay for expenses not covered by their health plans– whether it’s getting glasses for the family, keeping an ongoing prescription filled, or taking care of overdue dental work – they can take care of their immediate needs and repay us over several paychecks without worrying about interest charges or fees.
In turn, how can better employee enablement when it comes to payments in healthcare save costs for employers?
When employees get care when they need it, they’re able to maintain their health, resulting in lower total costs. Participation in existing account-based programs however, isn’t always great, especially for those who are in lower income brackets or living paycheck to paycheck. What we see is that employees who have access to TempoPay, take it up at a highly competitive rate compared to other account-based programs, with 60% of the employees who sign up using the benefit within the first year. In addition, once activated, they use the benefit regularly with an average of five to six uses per year.
Employers who implement PayMedix are seeing annual health insurance costs rise far below national averages, saving money for them and their employees. For example, across the health insurance industry, costs rose by 6.4% in 2023, in contrast to PayMedix members whose costs rose at just 4% — a rate that is 37% lower than the national average.
A further example of the benefits of a solution like PayMedix can be seen in hospital utilization. On average, 22% of Americans’ insurance claims represent hospital in-patient care, which is very expensive, but only 14% of PayMedix users’ claims are for in-patient care. Lower in-hospital utilization keeps costs down, which keeps rates from rising for employers and employees. This cost reduction is coupled with better health outcomes for employees so it’s a win-win for all involved. When an employer invests in solutions that help mitigate the burden of paying for healthcare, employees receive huge amounts of value. We’re proving that doing the right thing for employees is also good for business.
About Augusto Ruiz-Eldredge
Augusto is a senior executive with tenured expertise in FINTECH and is currently the COO of TempoPay. With two decades of leadership in finance, operations, customer service, and product development, Augusto has built companies from the ground up and developed unique products to serve unrepresented segments of customers in different markets. Prior to TempoPay, Augusto helped launch EquiPay, serving hundreds of underserved merchants with equitable and affordable payment solutions. Before EquiPay, Augusto spent 15 years helping the unbanked and underbanked in the cross-border payments space by providing accessible remittances and ancillary services that elevated customers’ lives. Augusto holds an MBA in Finance and Financial Management Services from Suffolk University’s Sawyer Business School.
