What is Reserve Funding?
“Reserve Funding” is Lively’s default and recommended funding method for employers. Two important things to know about Reserve Funding:
- Employers must pre-fund a percentage of their total plan elections. By pre-funding a portion of your plans’ total, you ensure employees can promptly access funds on day 1 of their plan term.
- Employers must maintain a certain balance in reserve (known as the “Reserve Requirement”) in order to fund claim spend, which is replenished on a weekly or monthly cadence.
- The Reserve Requirement amount is calculated based on the sum of all plan elections [multiplied by] the pre-fund percentage.
Replenishing Cadence & Pre-fund Percentage
The replenishing cadence you choose will also determine the pre-fund percentage required. You can choose from two options:
- OPTION 1: A weekly replenishing cadence requires that 5% of the total sum of all plan elections are pre-funded.
- OPTION 2: A monthly replenishing cadence requires that 15% of the total sum of all plan elections are pre-funded.
Example: Employer with 10 enrolled FSA participants, each with a $1,000 election ($10,000). Employer chooses a monthly replenishing cadence, which means they must pre-fund 15% of their total elections ($1,500) at the start of the plan.
Confirming your Reserve Requirement
After you have informed your Lively Representative of your preferred replenishing cadence, you will need to log in to your Lively dashboard to finalize your Reserve Funding confirmation. Lively will not debit your bank account for the pre-fund amount until you have completed this step in the Lively Dashboard.
Confirming your Reserve Requirement takes just a few steps and you are guided through the confirmation process with clear step-by-step instructions. If you have any questions during this time, please reach out to your Customer Success Team to assist.Updated: