Employer Services / Benefits Administration
Flexible Spending Account (FSA)

Cornerstone is pleased to provide you with a superior online process for checking on claims, filing claims online, enrolling online, making any updates to personal information, checking on account balances and more. For additional information, visit our FAQ's section.

What is a Flexible Spending Account?
Tax savings for your and your employees. Sometimes referred to as a cafeteria plan, flex plan, or a Section 125 plan, a Flexible Spending Account (FSA) lets employees set aside a certain amount of each paycheck into an account — before paying income taxes.

During the year, participants have access to this account for reimbursement of expenses — not covered by insurance — that they regularly pay for, such as:

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Advantages of a Flex Plan
When employees use tax-free dollars to pay for these expenses, they realize an increase in their spending power, and substantial tax savings.

The company saves too — about 8% (FICA match) on every dollar employees contribute to the plan. (This is true for employees earning less than the maximum amount taxed for social security.) For an employer tax-savings example, click here

Increase take-home pay. You can increase your employees’ share of insurance premiums without reducing their take-home pay.

Cushion insurance rate increases. Many employers are changing coverages and/or passing increases along to employees. A flex plan can be implemented with a change, and lessen the impact on an employee's paycheck.

Lower your health insurance costs. An employer's insurance cost can be lowered by coordinating changes to your insurance plan with the installation of an Flex plan.

Cut your retirement plan expense. Since profit sharing, 401(k) and pension plan contributions are based on employees' taxable salaries, your retirement expenses
may be reduced.

Save on other insurance premiums. Contributions for other coverages (like workers' comp. or disability) may be reduced because they are based on employees' taxable salaries.

Plan administration fees are deductible. Administrative costs are tax deductible and can be paid by you and/or your employees. Fees can be collected by payroll deduction on a pre-tax basis.

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Setup

Plan Documentation. Based on management's objectives and IRS requirements, Cornerstone will customize a plan document to meet the needs of the employer.

Summary Plan Description. Cornerstone will customize the IRS-required Summary Plan Description (SPD) to communicate provisions of the plan to employees.

Corporate Resolution/Adoption Agreement. Cornerstone will develop a corporate resolution/adoption agreement for an owner/officer's signature to adopt the Flexible Benefit Plan.

Employee Communication Payroll Stuffers and Posters. Cornerstone can provide payroll stuffers and posters to help generate employee interest in the plan.

Introductory Letters. Cornerstone can provide a sample letter from management introducing the plan to its employees.

Employee Communication Materials. Available In both brochure and PDF versions.

Group Meetings. Presentations can be conducted with all eligible employees to communicate the Plan and its benefits.

Online Enrollment. Through our Web site, employees may enroll online in the Flexible Benefit Plan at their convenience 24 hours a day seven days a week. We also accept all other forms of electronic submittal.

Enrollment Forms. All administrative forms (e.g., enrollment forms, claim forms, etc.) required to implement the Plan will be provided by Cornerstone.

Ongoing Administration

Discrimination Testing. Cornerstone will perform the discrimination testing required by the IRS to insure that plans are not discriminatory in favor of key or highly compensated employees.

Cornerstone Debit Card. One of the newest and fastest growing enhancements in benefit administration, and it’s here at Cornerstone. The Cornerstone Debit Card allows for eligible expenses to be paid for right from the participants account at point-of-sale. That means dramatically reduced usage of claim forms. And it means the participants may never need to go out-of-pocket for an eligible expense while waiting for claims processing and reimbursement.

Claims Adjudication. Cornerstone will perform all reimbursement claims adjudication.

Reimbursement Checks/Direct Deposit. Employees' reimbursement checks for dependent care and unreimbursed medical expenses will be sent directly to the employee's address on a weekly schedule. Each check contains an Explanation of Benefits and the current balance for each Flexible Spending Account. Reimbursements may also be directly deposited in the employees bank account.

Online Inquiry for Participants. Through the TeamCornerstone web site, participants may obtain the status of their claims, reimbursements and FSA account balances at their convenience 24 hours a day seven days a week. Toll-free Telephone Support. A toll-free Cafeteria Plan hotline is provided to management and plan participants to allow prompt response to all questions concerning payroll system coordination, enrollment questions, claims, account balances and other administration questions.

Quarterly Status Reports. Status reports showing spending account accruals versus plan expenditures for each employee will be produced quarterly for distribution to each employee.

Management Reports. Cornerstone will provide the employer with miscellaneous management reports regarding the Plan and employee activity.

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Example of Employer Savings
XYZ Company has 10 Employees

Copyright 2006 Cornerstone Group, Inc

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