In the US where $150 billion sits largely untouched in Health Savings Accounts (HSAs) and $3 billion in Flexible Spending Account (FSA) funds are forfeited annually, Tom Griffiths discovered a critical gap in healthcare finance: millions of Americans have access to tax-advantaged healthcare funds but don’t know how or where to use them.
“Most people have no idea what they can spend their pre-tax dollars on beyond basic medical visits,” Griffiths explains. “The average HSA balance is nearly $5,000, yet these funds remain largely unused due to confusion about eligible products and services.”
This realization led to the creation of Gale, a fintech solution that’s bridging the gap between healthcare merchants and the 80 million Americans with HSA access. The company’s innovation lies in solving both sides of a complex equation: helping consumers understand what products they can buy with their HSA/FSA funds, while enabling merchants to compliantly accept these payments.
The technical challenge is more complex than it might appear. Merchants can’t simply start accepting HSA payments without proper infrastructure. “Traditional e-commerce payment processing leads to high decline rates for HSA/FSA cards,” Griffiths explains. The solution required becoming certified as an integrated payment provider and building sophisticated systems to validate eligible products in real-time.
Launched just over a year ago with pre-seed funding of $250,000 and participation in the Techstars Physical Health Fort Worth Accelerator, Gale has found particular traction in the women’s health sector, where they’re already working with companies like Rif Care and Besti Co. This isn’t coincidental – the 2020 CARES Act made menstrual products HSA-eligible, creating new opportunities for period care companies to tap into these pre-tax funds.
The regulatory environment has created significant momentum. Simultaneously, demographic data shows women are primary decision-makers in household healthcare spending. “Women are the chief medical officers of their households, making over 80% of healthcare purchasing decisions,” Griffiths notes. “This makes women’s health products a perfect starting point for expanding HSA accessibility.”
The company’s solution goes beyond simple payment processing. Gale has built features specifically for HSA/FSA transactions, including split payments for mixed carts of eligible and non-eligible items, and partial authorizations that allow customers to use remaining FSA balances before they expire. They’ve integrated with major e-commerce platforms like Shopify, making it simple for merchants to activate HSA/FSA acceptance without complex technical integration.
Looking ahead, Gale plans to raise fresh funds in Q1 2024 to fuel their growth. The company sees HSAs becoming central to the future of health and wellness spending. “We envision HSAs as the cornerstone of financial health and wellness,” Griffiths says. “Our mission is to make these funds so seamless to use that consumers don’t have to think twice about accessing their benefits.”
The potential impact extends far beyond simple payment processing. With wellness spending expected to double and regulatory changes potentially expanding HSA access beyond high-deductible health plans, Gale hopes to set a new standard for accessible healthcare spending by bridging the gap between consumers’ pre-tax health funds and the products they need.
