Instacart soon accepting FSA and HSA payments

Instacart users who receive supplemental health benefits in the form of HSAs (Health Savings Accounts) and FSAs (Flexible Savings Accounts) will be able to apply those funds to their online orders beginning Dec. 4, the delivery company announced Monday.  

The last-mile delivery service is also launching Instacart Health Wallet in the coming months, which will enable shoppers to apply SNAP (Supplemental Nutrition Assistance Program), Medicare Advantage, Medicaid, FSAs and HSAs to eligible items.  

Sarah Mastrorocco, vice president and general manager of Instacart Health, said in a blog post Monday that millions of Americans enroll in FSA and HSA plans every year, but many do not use the full benefits afforded to them. That’s in large part due to FSA funds expiring at the end of each calendar year, according to Mastrorocco.  

“Given the 'use it or lose it’ nature of FSA funds, each year millions of consumers rush to spend these funds at the end of each year, only to be confronted with confusion about what’s covered and time-consuming reimbursement processes,” she wrote. “Annually, Americans forfeit billions of dollars in unused FSA funds that could have been spent on essential everyday health items like Band-Aids, eye drops and more—in addition to wellness items like foam rollers and heating pads.” 

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She noted that many retailers do not accept in-store payments via FSA/HSA cards, but Instacart’s new service will enable such payments from every retailer on its app that sells eligible products.   

The company also created the “FSA & HSA Shop” on its website to eliminate confusion over which products are eligible. Instacart also created in-app labels to help customers identify FSA and HSA products more easily, Mastrorocco wrote. 

Also, Instacart released its plans for Instacart Health Wallet, which aims to make it easier for customers to cover the cost of HSA-, FSA- and SNAP-eligible items on its platform. 

“With the Instacart Health Wallet, we’re seeking to change this, centralizing payment options, including SNAP and Medicare Advantage, Medicaid and other supplemental grocery and over-the-counter benefits, FSAs, HSAs and Instacart Health Fresh Funds,” Mastrorocco said. “In the coming months, the Health Wallet will make it easy for consumers to apply eligible benefits to the eligible items in their cart—in a single order.” 

The new functionality of its platform is Instacart’s most recent effort to grow its tech capabilities and capture new revenue from the pharmacy space.  

Instacart Health, which was launched last fall, expanded to all 50 states Instacart’s ability to process SNAP payments.  

The company has also partnered with cities, healthcare providers, universities and research organizations over the last year to grow its presence in the healthcare arena.