First of all, how are you and your Family doing in these COVID-19 Times?
Jeremy Miller: Thankfully, my family and I are healthy and doing well all things considered! Our business is based in New York City, so we saw firsthand just how dangerous this public health crisis was from the early days of the pandemic. We moved quickly to shift our employees to a remote format in early March, and I’m happy to report that everyone is healthy and doing great work in this new, virtual environment. I know we are all appreciative that we have access to technology that has allowed us to keep everyone employed and active from the safety of their own homes. So all things considered, we are performing well.
Tell us about you, your Career, how you Founded FSAstore.com
Jeremy Miller: My career has taken me through many different avenues of the business world, but I have always had an affinity for finding solutions to stubborn consumer problems. The idea for FSAstore.com was born when I saw firsthand as an Operations Manager for Gehry Technologies Inc. that there was so much confusion about flexible spending accounts (FSAs). For example, only about 20% of employees would sign up for this benefit, even though it gave them concrete tax benefits. Employees who did enrol had many questions about how to utilize their funds or how to navigate yearly spending deadlines. It just seemed crazy to me that there was no place to spend this money easily or to find answers to basic questions.
So, I created a business plan for FSAstore.com, and it won Best Entrepreneurial Idea at the Odyssey and Business Plan competitions at Columbia Business School. At that point, I jumped headlong into being a business owner by founding FSAstore.com in 2010 in an industry that was known for the complexity, and that sits at the intersection of healthcare and personal finance — and we did all this in the hypercompetitive world of New York City startups.
But starting a company from scratch also meant I did a little bit of everything, from making customer service calls to packing orders — I was involved in anything and everything to help the business get off the ground. And given that everything we could sell had to be approved as a “qualified medical expense” by the IRS, we’ve had to deal with the fact that many things are out of our control. For instance, the passage of the Affordable Care Act created immediate changes to how FSAs were used and funded just as the business was in its early growth stages. We had to learn early on how to react quickly in our business.
This also reinforced the value of consumer education in our overall business plan if we could simplify the process of using an FSA and give customers the tools and resources necessary to take full advantage of these benefits in a constantly changing environment, we could not only become an e-Commerce leader but a trusted authority for reliable FSA information. It’s that focus on simplicity and consumer education that helped FSAstore.com become a success, and we’ve replicated that model with HSAstore.com for health savings account (HSA) users and WellDeservedHealth.com for corporate wellness rewards.
How does FSAstore.com Innovate?
Jeremy Miller: As an e-commerce business, innovation never stops. We’re constantly testing new site designs, messaging, layouts, and anything else that may improve the consumer experience. Ultimately, we want people to be more engaged with their benefits and view their FSAs as an extension of their financial bottom line. And knowing that they have thousands of products to shop for — from sunscreen to baby care to over-the-counter medicines –, we want to keep them excited about the opportunity to support their health in every stage of life and to make better well-being choices.
Over the years, we’ve innovated by applying what we’ve learned to new areas of the health benefits space. For starters, we founded HSAstore.com in 2015 to provide an all-eligible product selection and world-class educational resources to the burgeoning population of people enrolled in these accounts and corresponding high-deductible health plans. We followed this up in 2019 with the launch of WellDeservedHealth.com, the first e-commerce site dedicated to helping people use corporate wellness rewards to purchase qualifying health products.
Innovation also means giving account holders new options and new ways to look at the utility of their benefits. One of the best examples of this is our private label line of health products called Caring Mill. We created the Caring Mill line to include a charitable component that allows FSA/HSA users to support community health through the use of their tax-free funds. This was new to the industry. Now, with each sale of a Caring Mill product, we donate a portion of the proceeds to Children’s Health Fund, a nonprofit that provides healthcare to underserved youth populations across the United States. After starting with a handful of products, the Caring Mill line now features dozens of ways for account holders to support their personal health and wellness, while giving to those in need.
How the Coronavirus Pandemic affects your Business and how are you coping?
Jeremy Miller: We recognize the need as a company to continually support our employees, our most important asset. We’ve added options that allow us to be responsive to our team’s needs through virtual meditation class, virtual coaching, food and home office reimbursements, virtual lunchtimes, and virtual happy hours. But these needs are also evolving, and with school right around the corner, we have to show support at every level and every distinct situation. We also have to be patient and recognize, for example, and allow employees to schedule breaks throughout the day without feeling the need to be always on. And we have to communicate more effectively.
As a retailer of health and wellness products, we saw a big surge in site traffic during the early days of the pandemic, as customers were looking to use their tax-free healthcare dollars to protect themselves and to treat symptoms. We had an obligation to help account holders nationwide use their FSA dollars in this time of need, and we moved quickly to help make this a seamless experience.
We started by organizing all of the items that could help customers better protect their health during the pandemic with a new category called “Virus Preparedness.” This allowed customers to shop for cold and flu items, diagnostic devices like thermometers and oximeters, and more, all in one place. This made shopping safe, simple, and streamlined. With such massive consumer demand for these products, we also committed to holding prices steady with our “Fair Price Pledge,” while also doing everything in our power to keep those items in stock.
However, one of the biggest challenges for our customers was the fact that masks, gloves, hand sanitizer and other personal protective equipment are not currently FSA/HSA eligible. That meant we couldn’t sell these items on FSAstore.com or HSAstore.com without breaking our “100% eligible” guarantee. So, we created a new section on WellDeservedHealth.com called “Health-E Selects,” which features PPE and related products that are in demand, but not currently FSA or HSA eligible. This way, our shoppers could use their tax-free funds on qualifying essentials, while being able to use a credit/debit card to cover the cost of much-needed PPE and supplies.
Did you have to make Difficult Choices, and what are the Lessons Learned?
Jeremy Miller: Every business comes with difficult choices, and making those against the backdrop of a public health crisis that affects everyone makes the process all the more daunting. In particular, since our business is affected by changes in federal legislation and by IRS changes, we’ve learned to adapt to new realities, such as several mid-year accounts and eligibility changes that were introduced as part of the CARES Act. While these were positive changes for account holders, it required that we expand our product selection at a time when supply chain and shipping services were maxed out. This, along with our transition to a remote work environment, created many challenges, but it was ultimately achievable, and we learned much in the process.
Perhaps the biggest lesson learned was the importance of communication, both internally and externally. Moving an entire workforce, offsite is an enormous undertaking, so we took steps to provide normalcy for our employees by bolstering our communication and cross-team collaboration. For example, we increased the frequency of virtual company meetings to keep the team on top of shared goals and offered benefits mentioned previously as a break from the monotony of working from home. This added support system was essential in helping teams work effectively and are a model for how we want to support employees in the future.
Externally, we had immediate challenges in our supply chain — as did pretty much every other business — to keep products in stock. We also had to address consumer frustrations on the gaps in FSA/HSA product eligibility and maintain a level of customer service that our users have come to expect. Messaging was key in these areas, and throughout the public health crisis, so we used targeted email messaging, on-site content assets and more to clearly explain how FSAs and HSAs could help in this time of need. What consumers really needed was reliable facts that they could use to take action. We learned that education could be so much more valuable in building brand loyalty than sales and promo codes. We take to heart our obligation to help people utilize their spending accounts for the benefit of their long-term health. If anything, the public health crisis illuminated just how vital FSAs and HSAs can be for American families and why FSAstore.com and HSAstore.com are essential.
How do you deal with Stress and Anxiety? How do you project yourself and FSAstore.com in the Future?
Jeremy Miller: Meditation has become a regular practice for me, and we’ve incorporated it into our corporate wellness initiatives to help employees relax and decompress during the workweek. The knowledge that we continue to help working Americans improve their health during this public health crisis is very impactful to me. Personally, spending time with my wife and kids and our new quarantine puppy Rosie has been a fun and rewarding stress reliever.
Moving forward, the mission of our company remains stronger than ever: give our customers the tools, resources, and quality healthcare products they need to take full advantage of their health benefits. In the end, I hope we will have helped healthcare consumers feel more empowered, more in control of their dollars, and better able to access more affordable healthcare products and services. I also hope more consumers adopt these tax-advantaged plans, which allow them to save a great deal of money each year on everyday health care purchases.
We’ve created a model that works for this industry, and we have the flexibility to break into new markets as they arise. I’m extremely excited about what the future holds.
Who are your Competitors? And how do you plan to stay in the Game?
Jeremy Miller: We’re up against big health and wellness retailers that sell many of the same products we do, but they do not go to the same lengths to accommodate the needs of healthcare consumers who use tax-free spending account by selling only eligible products, nor do they offer the educational resources that we do. These are value propositions that have always differentiated us from our competitors. We’ve also helped change the thinking around FSA/HSA users as a traditionally underserved cohort of the health and wellness market into a growing incremental revenue channel for vendors and partners.
We cater to the needs of more than 70 million FSA and HSA users, a number that continues to grow year after year, as more working professionals and families discover just how effective spending accounts can be for their financial security. The fact remains that the landscape of the American healthcare system is constantly changing, and we need to be able to adapt to meet the needs of consumers now, and in the future. Simplicity, convenience, and trust are the pillars that we built our company on, and that will guide us moving forward.
Your Final Thoughts
Jeremy Miller: I hope the best for everyone as we navigate through these times. At the same time, I am proud that our company can be part of the fight. We sell thousands of products a day that support the effort to contain this virus, and I spend a lot of time trying to find new ways to support our mission to help consumers improve their health and maximize their healthcare dollars.
Speaking of that, our annual benefits open enrollment is right around the corner for most Americans. So, if you work at a company that offers an FSA or HSA, don’t miss your chance to enrol for 2021. Just consider the financial benefits. For example, a family that sets aside the full FSA contribution for 2020 ($2,750) who makes the median U.S. household income ($63,688) should realize about $1,000 in tax savings because account contributions are deducted from their pre-tax income. In addition to reducing taxable income, HSAs also have concrete benefits for retirement, because the money in an HSA always belongs to the consumer and it rolls over annually and can be withdrawn tax-free for non-medical purposes when an account holder reaches Medicare eligibility at age 65. That could be a massive boost for those looking to bolster retirement savings.
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