Companies have the discretion of offering the programs, which come under Section 125 of the federal tax code. Healthcare tends to be the most popular since everyone has medical costs. The main risk for employees utilizing the flexible accounts is the fact that any money not used is lost. This rule was set up by the IRS as a tradeoff for the obvious advantages of avoiding the usual taxes. So people who have excess healthcare funds toward the end of the year would be smart to schedule dental checkups or stock up on qualifying medical supplies.
Employers benefit also.
They can save on payroll taxes by offering the accounts. On the other hand, they can lose money if employees incur a large healthcare expense and then leave the company before contributing enough to pay it off. The key to a successful program is employees who use all of their funds by the end of the year and don't rack up charges and then change jobs.