Ethel Cook a secretary at Computer Specialists Inc., in Monroeville, Pa., is "frightened to death to drive." So every month, the company picks up her $105 cab bill to and from work. It also recently paid for her new eyeglasses, a pair of shoes, and a new dress. It is all part of a flexible-spending account that president Warren Rodgers offers to the 133 employees at his $5.2-million contract-programming business. Employees can chose from a menu of benefits that include the typical, such as medical and dental insurance and vacation days, and the non-so-typical, such as car payments, adoption assistance, and the above-mentioned clothing allowance (the latter three are treated as taxable income). Says Rodgers, "I figure that people would rather be taxed on what they use rather than on benefits they don't need."
Rodgers isn't bothered by the uncertain future of flexible-spending accounts. "I'm going to keep doing this until someone says I can't," he states.