What is the benefit of offering a flex card?


What is the benefit of offering a flex card?

Employers have many options available when designing their benefit plans. One option commonly used is adding the flex card, or debit card feature to flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs).

The main benefit of offering a flex card as part of a benefits package is the cash advantage for employees. Instead of paying out of pocket at the provider or pharmacy with their own credit card or cash, the employee can use their flex card.  The funds are deducted directly from the FSA or HRA at the point of sale. The employee does not have to wait for a claim to be processed and a reimbursement to be issued for the expense.

While the flex card is great for the convenience of paying for the expense at the time it occurs, it does not replace the claims process for the FSA or HRA. Employees must still submit proper documentation for claims if the amount charged does not match a co-pay with the employer’s plan, is not an expense at an Inventory Information Approval System (IIAS) merchant such as a drug store or grocery store, or is not a recurring expense on the account.

If employees are educated about how to properly use the flex card, the overwhelming majority of employees using the plan will be pleased it is available. When adding the flex card to your benefits package, be sure to provide employees with resources explaining how the card works and how to make the most of the card and the benefit.


BusinessPlans, Inc. – myCafeteriaPlan does not intend to provide legal or tax advice and information contained in this article should not be interpreted as such. Regulations governing pretax plans are often open to interpretation and should be reviewed with your legal or tax advisor before making any decisions regarding your plan.

Posted 2/10/17