Healthcare care services become a necessity to be addressed in the world we are living in today. No doubt, the catastrophe of the pandemic has brought many significant changes in our lives, and in this run, it is most important to know the money spent on healthcare.
You would be surprised to know that in the United States, it’s next to impossible to think about healthcare without thinking about its associated costs. As the high prices and painful medical bills are a tough task for the people who don’t have the right insurance. However, to help Americans in this league, there are health savings accounts (HSAs).
A quick overview of HSAs
HSAs- health savings accounts, as the name suggests, let people put aside their pre-tax dollars and save their medical expenses. As of now, there are more than 26 million HSAs in the U.S., which collectively control $61.7 billion in assets.
Now, in another glad-tiding, Austin-based startup First Dollar has announced that it has raised seed funding and this will help the users in many ways.
First Dollar, the very first human-centric health care savings platform has closed a Seed round of $5 million!
Do you find it exciting? So we do!
However, to help you get a closer look at the functioning of this platform. And bring you more updates about this funding round, we’ve brought this post today. Let’s read ahead further.
What you should know about First Dollar?
First and foremost, you must know that First Dollar targets Millennials and Gen Z. As this is considered to be a healthy population, spending too much per year on healthcare coverage than they need. Surprisingly, only 1 out of 5 people in such demographics receive their deductible amount every year. Here First Dollar comes as a savior and provides them a better platform and allows them to spend on premiums into a simple, informative, 100% fee-free HSA account.
In its working mechanism, First Dollar enables employers and end-users to work along with its platform. Also, it charges employers a monthly administration fee to manage payroll contributions and HSA reporting, Also, customers get the option to set up a free account through their site and manage their money there.
Who is behind this Seed round funding?
First Dollar announced its $5 million seed funding round, which is further led by Next Coast Ventures with participation from Meridian Street Capital. Also, the other investors include former athenahealth CEO Jonathan Bush, Everlywell CEO Julia Cheek, Bright Health CTO Brian Gambs, and Capital Factory.
How does First Dollar work?
As stated by the founders of First Dollar, the platform aims to help consumers to get better use out of their healthcare savings accounts. The HSA is basically a non-taxable savings account, which can be used by the users to address their medical expenses, doctor visit co-pays, or medical prescriptions.
However, you should not forget that First Dollar works on both the front end and back end of HSAs. And charges a minimal monthly administration fee to employers, to manage payroll contributions and HSA reporting.
On the other hand, from the users’ perspective, First Dollar allows consumers to set up a free account via their website and manage the money.
Also, users can avail of the First Dollar debit card as well and earns money from a percentage of transactions on the debit card.
With this card, users get the opportunity to see where they get the most savings on certain medical products. And the company has also associated with RxSaver to get the discounts on the drugs. In another exciting way, the users can transfer their existing HSA to First Dollar or create and fund a First Dollar HSA.
With the help of First Dollar account, users receive the discounted healthcare products and services. And if required they can also attain the discount at a local pharmacy by showing the cashier a code from First Dollar.
How the First Dollar is different from Lively?
The closest venture-backed competitor for First Dollar is Lively, which has already raised $27 million back in October for its HSA product.
Lively also targets millennials with low fees and online management and provides the users with a great way to use HSA as an investment account.
However, First Dollar is different from Lively, as it focuses on educational content as well. Also, its offerings are not limited to this, but it creates a marketplace for customers, helping them to find healthcare products and services at lower price points.
On a quick comparison guide, Lively is more about the saving and investment side, whereas First Dollar focuses more on saving and spending simultaneously.
How First Dollar will utilize this funding?
With this seed funding, it is expected that the company shall hire engineers and designers to scale its HSA services. And there will be a glut of new features coming sooner on the platform as well. As of now, First Dollar has 10 employees, but now the company is planning to expand.
It is expected that the company will have a marketing and one customer executive as well. There will also be virtual employee onboardings to make the adjustment work in their favor.
As stated by First Dollar Chief Product Officer Colin, “I’ve been an HSA user for years, and it’s an amazing tool if you know how to use it. I’m excited to build a product that people will love that makes their finances healthier and also helps them make more informed decisions about their long-term health.”
The concept of First Dollar is based on offering convenience to the users to create and manage health savings accounts without any hassle. And further allows them to buy discounted health care products. This move has indeed simplified the health care savings account creating process. It is expected that the healthcare industry will see some better opportunities in the near future. And these new advancements will create an opportunity to combine industry knowledge and will let people access to improved services at their fingertips.