DEFINITION of 'Flex Dollars'
1. A local electronic currency used by some universities to facilitate students' purchases of food and snacks under the school's meal plan. Flex dollars are usually intended for in-between-meal food purchases; meal purchases are generally covered by a separate component of the overall meal plan. Flex dollars eliminate the need to carry cash for small purchases, and some schools have dining establishments that offer students a discount for paying with flex dollars. Students can check their balances and add funds to a flex dollar account online.
2. A term used to assign values to an employees benefits by insurance companies. Flex dollars are assigned to employees and give them the flexibility to choose their benefits with their flex dollars until they are used up. The benefit in doing this is it gives the employee the option of assigning a larger amount of coverage such as dental to one area while lessening the coverage in another area.
BREAKING DOWN 'Flex Dollars'
1. Flex dollars are stored electronically and the data is encoded on a wallet-sized card, often the student's school ID card. The accounts usually work on a declining balance system (similar to a debit card) whereby a student selects how much money to put in the flex dollar account and amounts are subtracted each time he or she makes a purchase.
2. An example is being assigned $1000 to split between dental, vision and prescription drugs. An employee in this case can split it evenly between all three, or put all in just one if they feel that would be most beneficial to their situation. Some companies provide basic benefits coverage and add flex dollars for better coverage.