Continuing Administration

Daily Processing of Employee Claims 

Enrolling Your Employees

Completion of the Enrollment Form

Form of Company Ownership 

Making Deposits to the Flex Checking Account

Making Mid-Year Election Changes

Monthly Billing and Reports

Completing the Change of Status Form

Employment Termination Procedures

Non-Discrimination Testing

W-2 Reporting for Work-Related Dependent Care

Form 5500 Reporting for Health Care

Claim Forms and Direct Deposit Authorization

Instructions for Accessing Personal Flex Acct Info On-Line

Left to Spend Reports

Annual Re-Enrollment

Daily Processing of Employee Claims  Top

The frequency of claims payment is the key to exceptional employee participation. Employees need their money NOW! The longer the time to be reimbursed, the less employees are inclined to participate. FlexBank looks at and pays claims daily. Paying claims daily is why Plans administered by FlexBank have an average participation of 38% vs. the national average of 15%.

Enrolling Your Employees  Top
The Employer should be sufficiently trained to promote and enroll all new employees. We offer several tools for educational assistance: user-friendly employee and employer brochures and a comprehensive web site, Keep in mind that employee participation has three advantages. They are as follows:

  • Employees Pay Less Income Tax! Employees do not pay Federal, most State*, Local (in Ohio)*, Social Security or Medicare income taxes on contributions made to a Flex Account. Flex account participation has been shown to substantially increase employee appreciation of the employer’s overall benefit program. Employee satisfaction with a benefit program is very desirable. *Check with your city and state to find out if you must pay taxes.
  • Employees Find Flex Plans Helpful For Budgeting! It is much easier to pay for a new pair of glasses by putting $6 per week into a Flex Plan than it is to come up with $300 all at once.
  • Employers Do Not Pay Matching Payroll Taxes on Contributions! Employers are not required to match Social Security, Medicare, or pay Workers Compensation premiums (in Ohio) on contributions employees make to their Flex Plan Accounts. This results in direct employer savings in payroll which may be used to offset the cost of administering the plan.

New employees should be given a copy of our Flexible Spending Account employee brochure, a copy of the Summary Plan Description (SPD) and an enrollment form. Please call us should you need additional copies of the brochure. Brochures are available in two ways: electronically at no cost or pre-printed booklets at our cost of $1.50 each.

  • Emphasize that the employee’s election, with few exceptions*, will remain the same for the entire plan year. *See the Administrators Guide to Permissible Mid-Year Election Changes brochure.
  • Make sure new participants understand that reimbursements are only made for expenses incurred between their effective date and the end of the plan year. Note: “When” the expense is actually paid is not relevant.
  • During the plan installation process we will ask you how you, the Employer, wish to reimburse for orthodontics. Make certain to inform employees that the plan will, or will not, reimburse orthodontics that are paid in a lump sum vs. a down payment with monthly installments for the period of treatment.

The Secret of living within the rules: Look for eligible expenses that are “repetitive or predictable” and that you know you will by buying anyway!

Completion of the Enrollment Form  Top
It is imperative that the Enrollment Form is completed in its entirety, even if the employee declines. Prior to sending us the form, please look it over to make sure the employee has completed all the boxes, signed and dated it (forms MUST be dated prior to the participant’s effective date).

For Group Insurance Premium Contributions: Each employee should formally elect to pay their group insurance premium contributions before tax by completing and signing a flex enrollment form when they are hired. This election is evergreen until revoked at the beginning of a new plan year or as a result of a qualifying life event that permits a mid-year change of election. We do not track insurance premiums in our system; thus you do not need to notify us of mid-year group insurance premium changes. Note: Group Insurance Premium changes do not permit a change in the Health Care or Work-Related Dependent Care flex elections. We will request premium contribution information after the end of each Plan year for Non-Discrimination Testing purposes.

At the bottom of the form there are three (3) information boxes which you, the Employer, must complete even if the election amounts are zeros. When completing this section, please complete:

  • Effective Date (generally, although some plans may differ, new employees are eligible to participate at the same time their group medical insurance becomes effective),
  • Date of 1st Payroll Deduction (the date when they actually receive their check),
  • Pays Remaining in Plan Year (this last entry will help employees in calculating the total annual election for partial years).

Form of Company Ownership is Important to Both Employer and Employee  Top

Any employee meeting the eligibility requirements can participate. Certain individuals are prohibited from contributing to the Plan through payroll on a pre-tax basis. Owners: Only owners who are also employees of a “C” corporation may participate in a Section 125 Plan. Sole proprietors, partners within a partnership, owners of an LLC, owners of an LLP and more than 2% owners of an S-Corporation are prohibited from participating. Owners’ Family Members: Rules of attribution apply to S corporations, thus more than 2% owner’s spouses, parents, children and grandchildren may not participate. Family members of C corporations, sole proprietors and partners in a partnership may participate in the plan.


Making Deposits to the Flex Checking Account  Top
Our administrative system automatically credits each participant’s account in the amount of his/her per pay period election. We will be processing reimbursements based on the assumption that you are depositing all employee elections promptly. Therefore, to avoid having checks bounce, you will need to make sure you deposit elections each pay period on a timely basis. Actual claims paid will fluctuate throughout the Plan Year. However, depositing collective monies from all participants to the Flex checking account evenly throughout the Plan Year is normally sufficient to cover the varying level of claims.

There is a situation that may periodically arise that requires an additional prompt deposit. This situation occurs when year to date claims from all participants exceed total deposits made to date. This is due to the requirement that the entire annual election made by each employee be available for reimbursement throughout the Plan Year. Should a sufficient number of full annual election claims be requested early in the Plan Year there may not be sufficient collective funds in the Flex checking account to cover the withdrawal obligations. If this occurs, we will call you and request that additional monies be deposited. You may deposit monies in one of two ways.

  • First, you may deposit what we call Additional Funds. This is an extra amount of money that continually remains in the checking account to cover excess varying claims amounts. FlexBank must be notified if these funds are taken out of the account.
  • Second, you may deposit, what we call Advanced Deposits. This is an early deposit of the amount you will be depositing for future pay periods. The number of future pay period deposits needed is determined by the amount of the claims required to be paid at the time we call.

Either way, we must know which type of additional monies you are depositing because our system accounts for each differently. Our system uses this money solely for the payment of claims. If you are using the same account for claims and billings (see Monthly Billings), please make sure you have deposited sufficient funds to cover the fees.

Making Mid-Year Election Changes  Top
IRS rules state that mid-year changes of an annual Election must be on account of a permissible event and be consistent with the Change in Status. These changes can be confusing. Therefore, we recommend that you refer to your Plan document or the Administrators Guide to Permissible Mid-Year Election Changes.

A Change of Status form needs to be sent to FlexBank whenever an Employee’s status change affects their election amount. If you need assistance in completing the form, please call our office.

Monthly Billing and Reports  Top
Monthly notices for administration fees will be emailed to you on the first business day of each month, for the previous month’s fee, either by email or regular mail. Fees are electronically collected (ACH withdrawal) on the first business day following the 25th of each month from the checking account of your choice. Fees for terminated employees are payable through the month of termination. Assuming we are notified of their termination, they will be deleted the following month.

To assist you in reconciling your Flex checking account, our monthly billing reports will include a Claims Register listing all checks written, direct deposits and debit card swipes (if offered) processed during the prior month. Also included is a Deposit Register totaling all deposits that should have been made during the prior month.

IMPORTANT: It is imperative that the amounts listed on our monthly Deposit Register exactly match the actual deposits you have made for the reporting period. If our records do not match, something has changed. We need to know what has changed, as we pay claims based on the assumption that a specific amount has been deposited to the reimbursement checking account. If you are using one account for both claims and billing, please make sure to deposit enough money to cover fees as our system uses the payroll deductions and any additional or advanced funds solely for claims payments.

Completing the Change of Status Form  Top
Please make sure that ALL of the following information is included:

Section I — Employee Information

  • Employer Name
  • Employee Name & Social Security Number

Section II — Reason for Change of Election

  • Check the box next to the event and attach evidence of the event as requested on the Form.

Section III — Change of Election Amount

  • Indicate the current amount being withheld for the appropriate Account.
  • Indicate the new amount to be withheld for the appropriate Account.
  • Indicate the actual payroll date of the change.
  • The Employee and the Employer must sign when the change is due to birth or adoption of a child, marriage or divorce, or a change in work status by either the employee or his/her spouse.

Employment Termination Procedures  Top
When you become aware of a terminating employee, you need to notify our office immediately using a Change of Status form.

  • Indicate the date of the last payroll deduction.
  • Indicate the amount to be withheld for the last payroll.
  • Only the Employer must sign the form for termination of employment.

We are not responsible for the payment of claims incurred after an employee terminates if we are not promptly notified.

Claims incurred prior to termination are reimbursable up to the full annual election, regardless of when the claim is received by our office. The terminated employee has up to 3 months following the end of the current Plan Year to submit eligible expenses.

  • At what point is an Employee NO LONGER an employee?

    An administrative problem that occasionally arises is when an employee goes on an unpaid leave of absence (due to sickness, injury, or layoff). You need to decide how long an “employee” is an “employee” not only for Flex, but also for all other benefits. As your administrator, an employee is “eligible” for claims until otherwise notified. The question is at what point does a short-term absence (one where the employee can easily catch up on deposits upon returning to work), become a long-term issue with no end in sight? The decision as to when this event occurs is entirely up to you.

  • Short-Term Absences: (absences of possibly 1 to 6 weeks in duration where the employee continues to be an “eligible” employee). Short-term absences (for whatever reason) can be easily rectified with catch-up deposits. Deposits can be caught up either in a lump sum from one pay period or pro-rated for the remainder of the year. You must notify FlexBank when an employee leaves and returns from a leave of absence. Please use a Change of Status form to do so. A short-term absence requires that we continue to pay claims up to the amount elected for the entire year.

  • Long-Term Absences Resulting in Termination: (generally 6 weeks or longer in duration where the employee ceases to be eligible to participate). At some point an employee on unpaid leave ceases to be an active employee and thus is considered terminated. Flex benefits cease when an employee is no longer “eligible” to participate. Only claims incurred prior to the date of ineligibility are payable.

    If an employee is rehired, you may offer the employee two options.

    1. If rehired after 30 days, the re-hired employee may elect to not participate until the next plan year. (Monies deposited prior to termination will be forfeited if the employee did not incur any eligible expenses during active employment.)
    2. If rehired within 30 days, the employee may step back into his original annual election, make up missed deposits and submit claims for the entire year including the period of leave.
  • FMLA Leave of Absence for Companies Employing 50 or More

    Employers with 50 or more employees should consult with their benefit advisors to determine their benefit obligations under the Family Medical Leave Act.

    You may wish to offer the terminating employee the option of having the balance of their annual election withheld from their final paycheck. This will permit an employee to continue to submit claims for any qualifying expenditure incurred after their termination date. If not opted for, the employee will then need to have incurred expenses prior to and including their termination date in order to receive reimbursement from their account.

  • Terminations where Flex COBRA Notification is Required

    Only plans where the Employer employs 20 or more people are required to offer COBRA. It is your responsibility to add the COBRA notification to your initial notice for new employees and also to your election notice for employees leaving your plan.

    Electing COBRA for flexible spending permits the terminating employee to continue deposits on an after-tax basis, for a period of time as specified by COBRA. This will entitle the participant to make withdrawals up to the full limit of his/her annual election.

  • Terminations where Flex COBRA is NOT Required

    Terminated employees not eligible for COBRA may continue to submit Flex claims after their date of termination for claims incurred prior to termination.

Non-Discrimination Testing  Top
The IRS requires mathematical tests to be performed in order to determine if your plan discriminates in favor of your Highly Compensated or Key employees. In addition to these mathematical tests, there are Eligibility and Benefits Tests at each component plan level. Mathematical discrimination testing will be performed at least twice a year. The initial testing will be done at the beginning of each plan year. These tests will indicate if the plan discriminates based on all “elected” contributions. At the end of the plan year, we will test based on “actual” benefits paid. We will advise you only if your plan is deemed to be discriminatory and will guide you as to what actions should be taken. Shortly after the beginning of each Plan Year we will request the information required to accurately perform each of the required tests.

W-2 Reporting for Work-Related Dependent Care  Top
The IRS requires that employers report amounts contributed for Work-Related Dependent Care in Box 10 of the participant’s W-2.
We suggest that you have your payroll system set up with a separate amount field for work-related dependent care. If done in this manner, dependent care elections can then be printed automatically on the W-2 in box 10.

Form 5500 Reporting for Health Care  Top
Generally, you will need to file a Form 5500 with the IRS if you have 100 or more participants in the health care account at the beginning of the plan year. You are responsible for filing this form. You will file this information at the same time you file for your other welfare benefits. If you are required to file a Form 5500, flexbank-offers-form-5500-prep-application.

Claim Forms and Direct Deposit Authorization  Top
FlexBank will process all reimbursement requests. The Employer needs to keep Claim Forms on hand for the employees. An initial supply of forms will be provided so that copies can be made as needed. Forms can also be downloaded from our web site, Please encourage participants to call our office if they have any questions about eligible expenses and/or what kind of documentation they need to send in with their claim. FlexBank offers reimbursement either via check, direct deposit or debit card. If an employee would like to have reimbursements directly deposited into their personal bank account, they will need to complete a direct deposit authorization. Please keep these forms on hand, or they may be found on

Instructions for Accessing Personal Flex Acct Information On-Line  Top

Type in our web site address –

  1. Click on “Your Account” and “Employer Account Login”.
  2. First time users will need to create an online account. To create an online account, you will need to know your Employer Number.
  3. Enter your Employer Number & Tax ID (with dashes). Click “Submit”.
  4. FlexBank Employer Account Creation
    1. Enter email address
    2. Enter a user name (4-12 letters and/or numbers)
    3. Enter a password (at least 8 characters in length; contain at least 1 lower case and 1 uppercase letter; contain at least 1 special character (ie !@#$%); contain at least 1 number (0-9).
    4. Confirm password.
    5. Click “Submit”

Left to Spend Reports  Top
Two months prior to the end of your plan year, we will create a ‘Left to Spend’ report for each active employee that still has money in their account. The report will summarize annual elections, minus year-to-date claims, and will be sent to the employer for distribution to the participating employees. This report will remind participants to incur expenses, if need be, prior to the end of the plan year. For detailed information regarding an account, the employee may contact our office or visit our website,

Annual Re-Enrollment  Top
Annual re-enrollment for all of our Flex plans is generally conducted during the 2-month period preceding Plan renewals. At this time we will send you re-enrollment forms and instructions on how to complete the re-enrollment process. Completed forms for the new Plan Year are required to be in our office no later than 30 days prior to the start of the new Plan Year.

If you are interested in a paperless enrollment process, we offer On-Line Enrollment. Please call FlexBank if you are interested in learning more about this program.