Exhibit14.2Among Firms Offeringand Not Offering HealthBenefits, Percentage of Firms Offering Flexible Spending Accounts andPre-Tax Employee Premium Contributions,By Firm Size,2012
* Estimateis statistically different between All Small Firms and All Large Firms within category (p<.05).NOTE:Section 125 of the Internal RevenueCodepermits employees to pay for health insurance premiums with pre-tax dollars. Section 125 also allows the establishment of flexible spending accounts (FSAs). An FSA allows employees to set aside funds on a pre-tax basis to pay for medical expenses not covered by health insurance. Typically, employees decide at the beginning of the year how much to set aside inanFSA, and their employer deducts that amount from the employee’s paycheck over the year. Funds set aside inanFSA must be used by the end of the yearorare forfeited by the employee. FSAs are different from HRAs and HSAs.Nineteen percent of firms responded “not applicable” when asked if they allow the establishment of a section 125 plan. For example, some firms may pay for 100 percent of the cost of coverage.SOURCE:Kaiser/HRET Survey of Employer-Sponsored Health Benefits,2012.