myFlexplan & Allocation
With a new benefits plan, or anything new really, we have found that it is generally helpful to understand the common terms that are used when discussing the details of the plan. This brings us to "Allocation."
myFlexplan provides employees with the power to choose where they want their funds to be made available for the year, and the word "Allocation" refers to the process of employees exercising that power. For employees to "allocate" their funds, they would log into their account on the myHSA app (or desktop website), and determine how much of their funds they want to put into their HSA and/or their WSA. They can put all in one, none in the other, split it 50/50 or any other iteration based on their own needs! Pretty cool, right?
In most cases, the options are HSA and WSA, but in many cases, there are other allocation options too, like RRSP, TFSA, or other initiatives that the company provides.
The "Allocation Window" refers to the timeframe in which the employee has to execute this decision. The default allocation window is 30 days, which gives the employees time to plan their year and forecast their expenses. Now, the question pops up: "Why decide now? How can I predict my year ahead?"
Well, it's not us being tough – it's a CRA rule (check paragraphs 5-6 of this CRA bulletin:
Think of it like this: Just like you can't buy insurance after an event, allocating your benefits has to be done before expenses are incurred.
For more detailed insight into myFlexplan, click here