NU Online News Service, Oct. 7, 10:23 a.m. – PacifiCare Health Systems Inc., Cypress, Calif., says it is putting Covantage, a PacifiCare subsidiary based in Austin, Texas, in charge of its new flexible spending account debit card program.

The managed care company announced plans last week to work with PayFlex Systems USA Inc., Omaha, Neb., and Med-I-Bank Inc., Waltham, Mass., to sell a card-based FSA administration program.

The first cards will go into action Jan. 1, 2003.

Employees usually fund FSAs with pretax payroll contributions. Traditionally, program participants have had to use slow, confusing paper claims to use the FSA funds.

Now, companies are starting to replace the paper-based claims with use of FSA debit cards that resemble bank check cards.

Covantage will be in charge of marketing. PayFlex will handle administration and billing, and Med-I-Bank will handle the technical aspects of issuing the cards and setting up the card network.