Flexible Benefit Plans for Federal Employees

T-GGD-88-12: Published: Mar 1, 1988. Publicly Released: Mar 1, 1988.

Additional Materials:


Office of Public Affairs
(202) 512-4800

GAO discussed the potential design of a flexible benefit plan for federal employees to determine the: (1) best time to adopt such a plan; (2) best kind of plan; and (3) resulting cost to the government. GAO found that: (1) although the number of flexible plans is growing, such plans are not yet widespread in the private sector; (2) the plans can encompass benefits such as medical care, accident and life insurance, dependent care, legal services, long-term disability, and savings-plan contributions; (3) the plans can incorporate a core-plus-option design where the employer offers core benefits and the employees could use optional credits to upgrade the core benefits or receive the credits in the form of cash; (4) most flexible benefits plans also contain a flexible spending account that would allow employees to elect tax-free salary reductions to pay for their expenses and from which they would receive reimbursement; (5) if all federal employees chose salary reductions in the amounts that they now contribute toward their health and life insurance, it would result in forgone tax revenues of $320 to $600 million; and (6) although adopting such a plan would result in a considerable tax loss, tax laws permitting this approach have been in effect for several years and federal employees currently partake of similar tax-free benefits.

Oct 10, 2018

Oct 9, 2018

Sep 5, 2018

Jul 16, 2018

May 9, 2018

Feb 8, 2018

Dec 21, 2017

Dec 7, 2017

Nov 20, 2017

Looking for more? Browse all our products here