The Christian Brothers Employee Benefit Trust offers FSAs through Principal Financial Group (The Principal®). As an employer, you act as the sponsor for the FSA program at your workplace. The program is voluntary. Participating employees elect to have a certain amount deducted from their paychecks (gross earnings) before taxes and set aside in flexible spending accounts. Your role is to maintain the money until the participant incurs valid expenses, at which time the participant requests reimbursement.

Advantages: An FSA may make employee benefits more affordable by saving you tax dollars. When your employees pay for qualified benefits with pre-tax dollars, they may lower their taxable income. This means that you might pay less in taxes and participants might end up with more take-home pay.

Disadvantages: A lower taxable income, however, could mean fewer social security benefits for your employees, because reducing taxable wages also reduces social security tax. Potential participants should contact their tax advisers for further details.

Generally, the higher the family income, the more likely an FSA will be to provide substantial savings. The FSA is probably the best choice if

• The participant and spouse’s combined gross income exceeds $30,000 a year
• The participant’s tax rate is 28% or higher

If you would like to add a Flexible Spending Account option to your existing benefits or are interested in receiving more information about the Trust, please Contact Us.

How an FSA Works

Step 1. You set minimum and maximum amounts that participants can set aside in an FSA.

Step 2. Each employee who wishes to participate in the program completes the simple election form, which tells you how much pre-tax salary to put into each FSA. Employees who elect not to participate during one enrollment period must wait until the following year’s enrollment period. Participants will only be able to redirect their FSA dollars between enrollment periods if one of the following occurs:

• Participant’s family status changes due to birth, death, adoption, divorce or marriage
• Participant’s spouse begins or quits working
• Participant’s spouse switches to full- or part-time hours

Note: Any change in elected FSA amounts for the above reasons must be made no later than 30 days after the events described.

Step 3. After a participant has received services, he or she files for FSA reimbursement for 1) the amount paid for health care that wasn’t covered by benefits; or 2) the amount paid for dependent care services. The participant sends documentation with a signed and dated Request for Reimbursement form to your designated Principal FSA service center.

Step 4. Reimbursement is made by the Principal Financial Group based on predetermined reimbursement minimums and on scheduled reimbursement dates, which occur twice per month. When an FSA participant has filed reimbursement claims that reach or surpass the stated minimum dollar amount, he or she will receive a check from Principal.