Few employers have wanted to risk advancing interest-free money to help employees pay medical bills. Edward Jones, the St. Louis-based financial investment firm, is one exception.

The company in 2006 devised a way to help employees pay unexpected medical bills by advancing cash interest-free from future paychecks. The money would otherwise have been deducted from their paychecks during the course of the year and deposited into individual health savings accounts. The service helped calm employees’ fears of not being able to pay for the high deductible, which is $2,500 for individuals and $5,000 for families in one of the plans the company offers.

“The No. 1 concern we heard from our associates was, ‘I don’t have $2,500 January 1st if I’m hit by a bus,’ ” said Andy Greenberg, principal of HR programs. “They were worried by that. This takes the worry out of having an unpredictable health care event.”

The money is advanced automatically when an employee pays for a health care bill with a Visa-branded HSA debit card. If the account is empty, money is drawn from an Edward Jones account. The debt is paid back through automatic payroll deductions that would otherwise have deposited a portion of a person’s paycheck into his or her health savings account.

The service is perhaps the biggest reason enrollment in these plans is high, Greenberg said. Although the company has a low-deductible plan, 77 percent of employees are enrolled in one of two high-deductible plans. About half of the employees across income levels have taken advances on their health savings account deposits.

Not having enough cash to pay a medical bill has been an unpleasant reality faced by many employees on high-deductible health plans. Though banks have capitalized by offering credit, the prospect of adding to a person’s debt has troubled some employers.

Still, advancing health care money is unusual, said Jay Savan, a consultant with Towers Perrin, which counts Edward Jones as a client, and has not been adopted by other employers for a number of reasons.

“The people that do [need the money], generally speaking, are not going to have good credit, and employers don’t necessarily want to underwrite it,” he said.

E-Duction in Blue Bell, Pennsylvania, offers a general-interest credit card that can be used for health care. The card’s debt is paid back through payroll deduction, and the loan is based on a percentage of a person’s salary. Paul Chicos, president and CEO of the company, said 85 percent of his 20,000 cardholders have subprime credit scores.

“Employers should be willing to guarantee loans from banks,” Chicos said, “because the money is coming out of payroll deduction.”

Though Edward Jones says it doesn’t provide credit, it does face a risk advancing a person’s paycheck. Employees who leave the company may never repay their debt.

“If someone leaves, we’re out the money,” Greenberg said. “We ask them to pay us. A large majority do; if they don’t, we don’t turn them over to a collection agency. We report it as taxable income and write off the loss.”

The company says it decided it would rather take the loss than add to people’s consumer debt. But that could pose a particular problem for companies with high turnover, Savan said. Companies are finding that most employees have saved enough by the end of the first year to have money in their account if they are faced with an unexpected medical bill early the next year, he said.

“By the time a plan is 2 or 3 years old, most people have accumulated some kind of balance,” he said.

—Jeremy Smerd

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