The state of California announced a new option for participants in their CalABLE (California Achieving a Better Life Experience) tax-advantaged savings program for individuals with disabilities to link a supported prepaid debit card to their account, easing access to funds for participants. The Orange County Breese highlights the opportunity for participants to gain easier access to their funds with the prepaid card:
“This new card is an improvement of the previous prepaid card offered by CalABLE. Account owners or their representatives can request cards, view their card balance, and make transactions all from the CalABLE website. Additionally, they can check their balance and review statements utilizing the U.S. Bank mobile app. There is no monthly fee for the card and no transaction fees.”
The Power of Prepaid Card Purchases
The CalABLE program partnered with U.S. Bank to support the prepaid option as the issuer of the Visa cards. This will now allow participants to utilize the power of card purchases for qualified expenses. This is similar to the typical use of Health Savings Account funds. The movement to prepaid cards helps the program catch up to traditional spending habits of their constituents. CalABLE’s executive director highlights this in the article:
“‘CalABLE allows account holders to use the funds in their accounts for the everyday expenses of living a life with a disability,’ said Dante Allen, Executive Director of CalABLE. ‘The new prepaid card makes it easy and convenient for account holders to pay for qualified expenses where they already live, work, and shop.’”
This is an interesting example of how government can modernize their programs, which have been traditionally check-based or reimbursement based. Programs such as CalABLE, serve communities in need, either because of health or economic status. These programs must get through bureaucratic issues. Also, these programs must treat the recipients as deserving of modern payment options through credit and debit rails and eventually by enabling the linking of those cards to mobile wallets.
Will Governments Adapt?
While a state such as California benefits from sheer size of population, and thus achieve more economies of scale in presenting options, it’s imperative for governments of all size to find ways to promote better payment options through card use to provide recipients with the most beneficial use of their funds. As many communities in the U.S. get through another election cycle and can move forward with policy and legislation it will be interesting to see how government entities take the learnings of the pandemic and potentially difficult economic conditions to adopt recipient focused opportunities that provide benefits as mentioned but also provide better ability of the issuing agencies to monitor and report on usage to assure taxpayers of proper use of government funds and benefits.
Overview by Jordan Hirschfield, Director of the Prepaid Advisory Service at Mercator Advisory Group