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Employee Cost-Sharing and the Welfare Effects of Flexible Spending Accounts
National Bureau of Economic Research [NBER]Link to more items from this source
May 18, 2005
Excerpt: In recent years, employees have been shouldering an increasing share of the costs of employee-provided health care. At the same time, more and more employers have been allowing employees to pay their out-of-pocket health care costs using pre-tax earnings, through tax-subsidized flexible spending accounts (FSAs). We use a cross-section of firm-level data from 1993 to show empirically that these FSAs can explain a significant fraction of the shift in health care costs to employees, ...

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