Disadvantages of Flexible Benefits Programs 1.Employees make bad choices and find themselves not covered for predictable emergencies. 2.Administrative burdens and expenses increase. 3.Adverse selection-employees pick only benefits they will use.The subsequent high benefit utilization increases its cost. 4.Subject to nondiscrimination requirements in Section 125 of the Internal Revenue Code. 10 Disadvantages of Flexible Benefits Programs 1. Employees make bad choices and find themselves not covered for predictable emergencies. 2. Administrative burdens and expenses increase. 3. Adverse selection —employees pick only benefits they will use. The subsequent high benefit utilization increases its cost. 4. Subject to nondiscrimination requirements in Section 125 of the Internal Revenue Code. 10