Linking transaction cards with spending accounts

• US 7,905,399 B2
• Filed: 05/04/2006
• Issued: 03/15/2011
• Est. Priority Date: 11/19/2004
• Status: Active Grant

• Current Assignee: Liberty Peak Ventures, LLC (Dominion Harbor Enterprises, LLC)
• Original Assignee: Oltine Acquisitions NY LLC (Intellectual Ventures LLC)
• Inventors: Malnati, Leigh Reynolds, Klaboe, Dana J., Jagatic, Jason S., Harrison, Sarah E., Bliman, Michael, Barnes, Brian T.
• Primary Examiner(s): Le, Thien M
• Application Number:
  US11/381,641
• Publication Number:
  US 20070175985A1
• Time in Patent Office: 1,776 Days
• Field of Search: 235/375, 235/380, 235/381, 705/4, 705/39, 705/40, 705/2, 705/35, 705/30
• US Class Current: 235/381
• CPC Class Codes: G06Q 20/04 Payment circuits
• CPC Class Codes: G06Q 20/20 Point-of-sale [POS] network systems
• CPC Class Codes: G06Q 20/40 Authorisation, e.g. identification of payer or payee, verification of customer or shop credentials; Review and approval of payers, e.g. check credit lines or negative lists
• CPC Class Codes: G06Q 30/04 Billing or invoicing

Abstract

A computer-implemented system and method to facilitate a purchase utilizing a flexible spending account, comprising the steps of: receiving, at a host computer, a request for payment authorization for an item; determining whether the item qualifies for pre-tax treatment; and when the item qualifies for pre-tax treatment: determining at least partial payment authorization for the item, transmitting the at least partial payment authorization for the item to a point of sale device; causing the flexible spending account to be debited for at least a portion of the purchasing amount of the item based on the payment authorization; and debiting a non-flexible spending account for an item not qualifying for pre-tax treatment.

Claims

1. An apparatus comprising:

a processor; and

a memory storing instructions, execution of which by a computing device causes the computing device to perform operations comprising;

linking an existing card, associated with a non tax-advantaged account of a cardholder, to a Health Savings Account (HSA) of the cardholder;

receiving a request, initiated by a use of the card, for payment authorization for a purchase of a plurality of items, at least one of which qualifies for pre-tax treatment and at least one other of which does not qualify for pre-tax treatment,

authorizing payment for the purchase,

transmitting a payment authorization to a point of sale device,

causing the HSA to be debited for at least a first portion of a first purchase amount of the at least one item that qualifies for pre-tax treatment, and

causing the non tax-advantaged account to be debited for at least a second portion of a second purchase amount of the at least one item that does not qualify for pre-tax treatment.

2. An apparatus comprising:

means for linking an existing card, associated with a non tax-advantaged account of a cardholder, to a Health Savings Account (HSA) of the cardholder;

means for receiving a request, initiated by a use of the card, for payment authorization for a purchase of one or more items;

means for determining whether one or more of said items qualifies for pre-tax treatment;

means for determining at least partial payment authorization for said qualifying item, transmitting said at least partial payment authorization for said qualifying item to a point of sale device, and causing the HSA to be debited for at least a portion of the purchasing amount of said qualifying item based on said payment authorization in response to a first determination that at least one of said items qualifies for pre-tax treatment; and

means for causing the non tax-advantaged account to be debited for said non-qualifying item in response to a second determination that at least one of said items does not qualify for pre-tax treatment.

3. A method comprising:

linking an existing card, associated with a non tax-advantaged account of a cardholder, to a Health Savings Account (HSA) of the cardholder;

receiving, using a computing device, a request, initiated by a use of the card, for payment authorization for an item charge;

determining, using the computing device, whether the item charge qualifies for pre-tax treatment;

causing, using the computing device, the HSA to be debited for the item charge in response to a first determination that the item charge qualifies for pre-tax treatment; and

causing, using the computing device, the non tax-advantaged account to be debited for the item charge in response to a second determination that the item charge does not qualify for pre-tax treatment.

4. The method according to claim 3, wherein the determining whether the item charge qualifies for pre-tax treatment comprises at least one of:

determining whether the transaction instrument is associated with the HSA;

determining whether the FSA contains sufficient funds to cover the item charge;

or

determining whether the merchant satisfies the requirements necessary to permit funds for the purchase to be drawn from the HSA.

5. The method according to claim 3, wherein the determining whether the item charge qualifies for pre-tax treatment comprises determining whether the item charge satisfies Internal Revenue Service Guidelines.

6. The method according to claim 5, wherein the item charge is associated with a plurality of items to be charged, and wherein the method further comprises:

determining whether any of the plurality of items does not satisfy Internal Revenue Service Guidelines;

separating out items that do not satisfy Internal Revenue Service Guidelines;

causing the HSA to be debited for a charge of an item or items that satisfy Internal Revenue Service Guidelines; and

causing the non tax-advantaged account to be debited for a charge of an item or items not satisfying Internal Revenue Service Guidelines.

7. The method according to claim 3, wherein the item charge is associated with a plurality of items to be charged, and wherein the method further comprises:

determining whether any of the plurality of items to be charged is not eligible to be charged to the HSA;

separating out items not eligible to be charged to the HSA;

causing the HSA to be debited for a charge of an item or items eligible to be charged to the HSA; and

causing the non tax-advantaged account to be debited for a charge of an item or items not eligible to be charged to the HSA.

8. The method of claim 3, wherein the card is a credit card.

9. The method of claim 8, wherein the card is owed by the cardholder prior to an opening of the HSA by the cardholder.

10. The method of claim 3, wherein the card is a debit card.

11. The method of claim 3, wherein linking the card to the HSA enables usage of the card for HSA expenses, thereby creating a virtual HSA within the non tax- advantaged account.

12. The method of claim 11, further comprising linking functionality associated with the HSA to the non tax-advantaged account.

13. The method of claim 3, wherein the transaction instrument is at least one of:

an open or closed charge card,

a stored value card, or

an RFID chip based card or token.

14. The method of claim 3, wherein causing the HSA to be debited further comprises submitting a receipt for the item charge to a third party administrator in response to a third determination that the item charge qualifies for pre-tax treatment, wherein the third party administrator charges the item charge to the HSA, and wherein the third party administrator determines whether substantiation of a portion of the item charge is necessary.

15. The method of claim 14, wherein the third party administrator notifies the cardholder and charges the non tax-advantaged account in response to a determination that substantiation of the portion of the item charge is necessary.

16. An article of manufacture including a computer-readable medium having instructions stored thereon, an execution of which by a computing device causes the computing device to perform operations comprising:

linking an existing card, associated with a non-tax advantaged account of a cardholder, to a Health Savings Account (HSA) of the cardholder;

receiving, using the computing device, a request, initiated by a use of the card, for payment authorization for an item charge;

determining, using the computing device, whether the item charge qualifies for pre-tax treatment;

causing, using the computing device, the HSA to be debited for the item charge in response to a first determination that the item charge qualifies for pre-tax treatment; and

causing, using the computing device, the non-tax advantaged account to be debited for the item charge in response to a second determination that the item charge does not qualify for pre-tax treatment.

17. The article of manufacture according to claim 16, wherein the determining whether the item charge qualifies for pre-tax treatment comprises at least one of:

determining whether the transaction instrument is associated with the HSA;

determining whether the HSA contains sufficient funds to cover the charge for the purchase; and

determining whether the merchant satisfies the requirements necessary to permit funds for the purchase to be drawn from the HSA.

18. The article of manufacture according to claim 16, wherein the determining whether the item charge qualifies for pre-tax treatment comprises:

determining whether the item charge satisfies Internal Revenue Service Guidelines.

19. The article of manufacture according to claim 18, wherein the item charge comprises a plurality of items to be charged, and wherein the operations further comprise:

determining whether any of the plurality of items does not satisfy Internal Revenue Service Guidelines;

separating out items that do not satisfy Internal Revenue Service Guidelines;

causing the HSA to be debited for a charge of an item or items that satisfy Internal Revenue Service Guidelines; and

causing the non tax-advantaged account to be debited for charge of the item or items that do not satisfy Internal Revenue Service Guidelines.

20. The article of manufacture according to claim 16, wherein the item charge is associated with a plurality of items to be charged, and wherein the operations further comprise:

whether any of the plurality of items to be charged is not eligible to be charged to the HSA;

separating out items that are not eligible to be charged to the HSA;

causing the HSA to be debited for a charge of an item or items that are eligible to be charged to the HSA; and

causing the non tax-advantaged account to be debited for a charge of an item or items that are not eligible to be charged to the HSA.