The Effect of Education on Participation in Flexible Spending Accounts

Written By: Vickie L. Hampton, Karrol A. Kitt, Sue Alexander Greninger, and Thomas M. Bohman

In order to better understand employee benefit decisions, this research identified factors associated with the decision to participate in a flexible spending account (FSA) for medical expense reimbursement. Participation was positively related to income and to education. A logistic regression of the likelihood of participation on family income and education showed that participation increased with income, but at all income levels, participation increased with education. The independent effect of education suggests the need to more clearly communicate the benefits of such programs to those with less education. Key Words: flexible spending accounts, fringe benefits, reimbursement accounts, education

Comments are closed.