Question

What is the main disadvantage to an employee when using a flexible spending account (FSA)?

A. Employees risk losing their money at the end of year if funds are not used by the year-end deadline.
B. There are too many restrictions on what is a qualified health expense.
C. It's difficult to keep receipts for qualified health expenses.
D. It's difficult to predict future health expenses.

Answer 1

The main disadvantage of using a flexible spending account (FSA) for employees is the risk of losing money if funds are not used by the year-end deadline.

Step-by-step explanation:

The main disadvantage to an employee when using a flexible spending account (FSA) is Employees risk losing their money at the end of year if funds are not used by the year-end deadline. This is because unused funds in an FSA typically do not roll over to the next year and are forfeited. It's important for employees to carefully estimate their eligible expenses to avoid losing money.