Survey & Sample Series: Flexible Benefit Plans and FSAs

The majority of respondents, 90%, also offer health care and dependent care flexible spending accounts.

As part of its Survey & Sample Series, the International Foundation of Employee Benefit Plans conducted a survey on flexible benefit plans (also known as cafeteria plans) and FSAs.

The survey, administered in August and September of 2006, is an attempt to better understand the prevalence and design features of employer-sponsored flexible benefit plans and to gauge employee participation levels for health and dependent care accounts. The 326 responses, from Foundation members, represent corporations (60%), professional service firms (22%) and public employers (18%). The published results include 50 valuable samples. Seven plan documents, 15 summary plan descriptions, 24 enrollment and claims forms, and four other communication pieces are provided.

• Employee use of FSAs: Although the majority of employers do offer health and dependent care accounts in their plans, 73% of respondents indicated that only 39% or less of their employees use health care FSAs and, according to 68% of respondents, the participation level for dependent care accounts is 9% or lower.
• Funding of health care FSAs: For the majority of respondents (92%), health care FSAs are completely funded by employees.
• Forfeiture/use of available funds: Most participants make use of all the funds set aside in their FSAs. Forfeiture rates are low, with 62% of respondents indicating that 7% or less of employees forfeited money in their health care FSAs and less than 5% of employees forfeited money in dependent care FSAs.
• FSA limits: The most commonly indicated maximum contribution that an employee can make to a health care FSA was $5,000 or more, as cited by 42% of respondents.
• Opt-out provisions: Only 25% of respondents provide cash or credits to employees who opt out of health care benefits in their flexible benefit plans.
• Consumer-driven health plans: Thirty percent of respondents indicated that, in addition to a flexible benefit plan, they also offer a consumer-driven type of health plan.mla.htm

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