Truemed unlocks HSA/FSA coverage for dietary supplements
Truemed aims to change that by allowing health and wellness brands to accept Health Savings Account (HSA)/Flexible Spending Account (FSA) funds to buy a range of supplement and exercise products to address prevention and chronic disease.
The 18-month-old company, whose founders liken its tool to PayPal for its ubiquity and ease of use, allows consumers to use HSA/FSA pre-tax dollars on brands such as Seed, Armra, Momentous and Timeline. Customers can also purchase a Peloton or even a CrossFit membership.
“We're much more of like a compliant payment network like PayPal, but with a doctor's network built into it,” said Justin Mares, Truemed founder, who added the company has a network of 60 physicians.
How it works
The Internal Revenue Service (IRS) dictates how HSA/FSA dollars can be spent and that only purchases that are made to specifically prevent or treat a medical condition are eligible. Several products do not need a doctor’s approval to be purchased by these dollars, such as sunscreens, band aids and contact solutions.
However, if consumers want to buy a supplement to address obesity, for example, they need a letter of medical necessity from their doctor. In the past, this process might have taken weeks. Truemed shortens this timeline, which essentially comes down to that doctor’s approval, some preliminary questions and a few clicks on a brand’s website. The letter of medical necessity is valid for a year.
Using HSA/FSA funds saves customers an average of 30% to 35% on purchases they make through Truemed. For brands that offer the payment platform, Mares said they are seeing that 15% to 20% of their new customers are ordering through Truemed, capturing groups of people who do not normally buy their products.
The company’s founders say Truemed steps in where the insurance companies have failed their clients.
“Let's say that you have or are at risk of type 2 diabetes, the system basically will not not incentivize you to eat organic, will not incentivize you to get your own workout plan, will not incentivize you to take supplementation or any sort of thing,” Mares said. “And it won't incentivize you to do the things that have the chance of putting you on a path that has you mitigate or totally reverse your type 2 diabetes before going on medication. And yet, [the system] basically will not step in, will not incentivize you to change any of your behaviors.”
A commitment to prevention
Truemed is not Mares first venture into products that promote health and wellness. He is also founder of Kettle & Fire, a company that creates a collagen-rich bone broth from grass-fed cows. It is the largest bone broth brand in the U.S.
“We put a ton of care into the quality of our product,” he said. “And the consistent thing that we hear from everyone for years was basically like, ‘I love the product. It's too expensive.’ And for almost any intervention that can fight chronic disease, organic food is more expensive. A gym membership is more expensive.”
He added: “These interventions are expensive. And so what we wanted to do at Truemed is just make them more affordable and align and change the incentives.”
As for the future, Truemed is working toward providing HSA/FSA spend on healthy food options and pairing supplements with products such as microbiome company Viome, part of its current health tech offering.
