Define flex credits and flex credit records
Flex credits are the amounts you give to your employees to purchase benefits. Employees then use these credits to purchase benefits.
When you define flex credits, the application creates a flex credit record that determines how flex credits are calculated. In addition, flex credit records determine any percentage of unspent flex credits that is paid to employees as taxable wages, and any amount of regular pre-tax income that you can use to purchase benefits after all flex credits you used. Flex credits are calculated based on many variables, including salary, years of service, age, or number of dependents.
A flex record is defined for the benefit plan, so you can generate a record for each employee. Any employee enrolled in the plan can have an individual flex credit record.
This table shows different scenarios for the flex credits:
Examples
| Scenario | Example |
|---|---|
| You can use flex credits to purchase other benefits with 80 percent of any unused dollars taken as taxable income. This is given before enrollment. | John receives $1,500 flex credits before he select his benefits. He spends $1,200 to purchase benefits. Of the $300 remaining, he receives 80% or $240, as taxable wages. |
| You can use flex credits to purchase other benefits with 100 percent of any unused dollars taken as taxable income. This is given by election of benefit. | Tom is covered under his wife's health plan. Based on his election to waive coverage, he gets $500 flex credits to spend. He spends $400 of the flex credits to purchase family dental coverage and receives $100 as taxable wages. |
| You cannot use flex credits to purchase other benefits with 100 percent going directly to taxable income. This is given by election. | Based on Sue's election to take single health coverage, she receives $100 flex credits. Sue also elects to take a supplemental life benefit that costs $200. Because she cannot apply her $100 in flex credits to the cost of the supplemental life, the $100 is added to her taxable wages and the $200 cost of supplemental life is deducted from her wages. |