Employer Services
Flexible Spending Account FAQ's

1. Why should we have a Flexible Spending Account (FSA) Plan?
2. How are employees reimbursed for eligible purchases?
3. Who holds the contributions for the Flexible Spending Plan?
4. What does the Employer have to do to offer a Flexible Spending Plan?
5. What information will I receive regarding my plan?
6. Can I offer both a Health Savings Account (HSA), and a FSA?
7. Can I offer both a Health Reimbursement Arrangement (HRA) and a FSA?
8. Do I need to do anything if I want to extend my plan year by 2 ½ months?
9. Can an Employer manage a FSA plan themselves?

1. Why should we have a Flexible Spending Account (FSA) Plan?
In addition to enhancing your benefits package, employers will also save payroll taxes on all FSA elections made by employees.

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2. How are employees reimbursed for eligible purchases?
Employers may make reimbursement available by check or by a Visa debit card. The debit card is programmed to work anywhere credit cards are accepted and eligible items can be purchased. If you select the debit card option, employees can still receive a check reimbursement.

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3. Who holds the contributions for the Flexible Spending Plan?
The contributions taken by payroll reduction are deposited into an account held by the employer. A minimum funding amount of 4% of the annual elections is deposited into the account at the beginning of the plan. Cornerstone provides reimbursement by check or debit cards from the employer-held account.

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4. What does the Employer have to do to offer a Flexible Spending Plan?
An FSA can be put into place at any time. Most plans begin when the health insurance renewal occurs. Once the plan design is complete, Cornerstone will conduct employee enrollment meetings and send materials directly to participants at their homes.

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5. What information will I receive regarding my plan?
Cornerstone regularly provides detailed information. When a check is issued to a participant, the employer receives a check register for their records. Weekly e-mails are sent to summarize debit card activity. Monthly, employers receive complete detailed reports to assist with their account reconciliation.

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6. Can I offer both a Health Savings Account (HSA), and a FSA?
Federal regulations prohibit employees from participating in both a Health Savings Account (HSA) and a traditional FSA concurrently. Employers may add a “Limited Use FSA” for HSA participants, which limits FSA reimbursements to dental and vision expenses only. It is possible for the same employer to offer a traditional and a Limited Use FSA plan to accommodate all employees.

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7. Can I offer both a Health Reimbursement Arrangement (HRA) and a FSA?
Yes. An HRA and FSA are separate and can be offered to employees at the same time. An HRA plan is employer dollars used to reimburse qualified HRA plan expenses. FSA elections are employee dollars set aside for eligible expenses.

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8. Do I need to do anything if I want to extend my plan year by 2 ½ months?
Yes. The 2 ½ month extension is elected by the employer and is not automatic. A plan amendment is required to put the extension in place, which Cornerstone will prepare if you select this feature. The plan year elections are still deducted over the 12 month plan year, although expenses may be incurred over 14 1/1 months.

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9. Can an Employer manage a FSA plan themselves?
Although not recommended, a Flex plan can be self-administered. A plan document is required in either case. Cornerstone advises against employers self-administering their FSA for reasons of privacy of employee medical information. Additionally, for a small monthly administrative cost, Cornerstone will provide excellent customer service and swift reimbursement.

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