Boosting flex account enrollment: Try this
July 2, 2009 by Bill MeltzerPosted in: Health care, Latest News & Views, My best management idea
Looking for a way to make flex accounts a little more employee friendly?
Here’s a strategy that many employers overlook: Many TPAs offer direct deposit as an FSA reimbursement option, rather than sending checks to participating employees. The choice is up to the participant.
One of our readers from New Berlin, NY reports that simply adding this option for employees increased workers’ satisfaction with the turn-around of reimbursements, and offset a common reason some employees gave for not participating in the benefit.
Several employees who hadn’t enrolled in past years because FSA contributions are deducted from their regular paychecks were convinced to enroll because reimbursements went straight to their bank accounts, regardless of the amount deducted to date during the plan year.
Typically, TPAs require employees to submit a voided check if the employee wants the money direct deposited to a checking account. If the employee prefers the money go into a savings account, the employee typically has to submit a direct depost form from his or her financial institution.
Two common errors to watch out for: Some employees make the mistake of submitting a deposit slip rather than a voided check. Administrators typically reject this form of enrollment, thereby delaying enrollment. In addition, it’s up to the employee to notify the administrator promptly of any account changes or closings.
Are the Benefits of Automatic Enrollment Worth the Cost?
July 6th, 2009 at 6:14 pm
Our company has something called Benny Cards issued through Flex Plan and it is wonderful. It is used like a Mastercard and you can use it for all the things you can use Flex Plan for. Plus the card is preloaded with the amount elected so you can use it any time during your FSA year.
July 9th, 2009 at 12:32 pm
We to use debit cards for FSA . Very easy tu use and no claim forms to submit.
July 9th, 2009 at 1:15 pm
We also use the debit cards for FSA, but do have to submit claim forms if the amount being paid is other than a regular doctor or prescription co-pay amount. It is much easier for the employee, but it is more expensive for the employer – about $2,000 a year, if I remember correctly, for a company of about 40 people.
July 9th, 2009 at 2:11 pm
We also have FSA debit cards, but here in NYC, some commuting costs are higher than the $230 maximum allowed, so employees still have to use their own credit card and submit receipts. Our Flex adminstrator will direct deposit the reimbursement right back to their checking accounts within 2 days. When a paper check is issued, it sometimes takes up to 10 days to receive the check.
Since we started encouraging direct deposit, the participation has increased.
July 9th, 2009 at 3:10 pm
We have online “eclaim” processing allowing employees to quickly use dropdowns to enter expenses, then fax or mail hardcopies. Claims paid weekly (option daily) with direct deposit.
July 10th, 2009 at 9:41 am
The down side of Debit/Benny cards is when the employee pays for their drugs, OTC drugs and throws a magazine or something on there too. They could really open themselves up to problems with the IRS.
July 10th, 2009 at 9:48 am
Some stores like Bartell’s and Safeway have a system that will pull out the stuff eligible for FSA then the rest you can pay with your regular debit/credit. The system is really helpful.