First Dollar Earns IRS Approval as Nonbank Trustee

AUSTIN, Texas, Nov. 2, 2023 /PRNewswire/ -- First Dollar, flexible infrastructure for health spending benefits, announced today its approval by the Internal Revenue Service as a passive nonbank trustee for health savings accounts. This designation broadens First Dollar's capacity to provide partners with greater flexibility and more robust compliance capabilities for HSAs. The approval by the IRS is a significant milestone, underscoring First Dollar's credibility and maturity and highlighting its expertise in managing pre-tax accounts like FSAs, HRAs, and HSAs.

"Our commitment to compliance and our earned trust has made this achievement possible," said Jason Bornhorst, CEO and co-founder at First Dollar. "We're excited to serve our partners in our expanded capacity as a nonbank trustee."

With the NBT designation, First Dollar can offer a more expansive array of platform solutions that help partners own their destinies. First Dollar can:

• Act as an HSA custodian, reducing partner reliance on banks.
• Demonstrate to clients and investors that it's done the work.
• Enable faster go-to-market paths for clients who may not want to serve as the custodian themselves.
• Minimize cost and friction in platform migrations.
• Reduce liquidity risk by ensuring deposits are placed strategically at diverse and well-capitalized financial institutions.

"As a former regulator and operator in the heavily regulated banking world, I have deep respect and appreciation for the discipline required to complete the nonbanking trustee process," said Geoffrey Scott, Head of Operations and Risk at First Dollar. "This approval from the IRS highlights that First Dollar has the maturity and experience to service the largest financial institutions and plan administrators in a win-win partnership."

First Dollar's strong culture of compliance and security provided a solid foundation for completing the multi-step review process. During its review, the IRS evaluated First Dollar's documentation of:

• Commitment to and understanding of relevant IRS rules and regulations
• Internal security and compliance processes and standards
• Custodianship over the course of a year, and
• Staff experience and credentials.

"Implementing first-class compliance and security standards are integral when building technology solutions at the intersection of healthcare and finance," shared Colin Anawaty, Chief Product Officer at First Dollar. "With intentional planning and mutual respect across the table, our teams complement each other's goals, help each other navigate the complexity across two highly regulated industries, and act as one to minimize the risks facing our business, customer data, and deposits."

First Dollar's designation as a nonbank trustee is also a testament to the expansion of its operations team. First Dollar recently hired Suzanne Eaton (formerly of Optum) as Director of Benefits Compliance and Alex Pâté (formerly of Rippling) as Director of Partner Implementation. They join Karl Pierce, Treasury Manager (formerly of HealthEquity), and Jim Kloss, Director of Client Partnerships (formerly of Benefit Wallet). Under Geoffrey Scott's leadership (formerly Federal Reserve and Discover), the Operations team offers industry expertise and regulatory guidance to First Dollar's partners.

About First Dollar: 
First Dollar is a technology company that provides infrastructure for health spending benefits. We offer a suite of software tools and APIs that enable organizations to launch and manage pre-tax accounts, lifestyle benefits, rewards programs, and supplemental benefits. First Dollar's Benefit Suite includes the Health Wallet for consumers, Health Wallet Manager for administrators, and the Health Wallet Platform for partners. First Dollar is based in Austin, with teammates all over the United States.

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SOURCE First Dollar