Suppose my wife and I both can claim FSA but the max is 5k. And suppose we both have two dependents on our w-4. The big difference is lets say I get paid 100k and she gets 50k. Who is the better candidate to claim the FSA?
You are very close to the social security wage base limit, $110,100 in 2012. FSA is withheld pre-FICA, so in future years when you are over the limit, you may still hit the maximum withholdings. Your wife, at $50K will save both your marginal rate (25%) as well as the normal 6.2% for social security withholding.
Edit - to add a clear example - At $50K, if your wife takes out $5K for FSA, the $5K avoids FICA withholding. Same for you at $10K, but, suppose your income were $115K, if you withheld $5K for FICA, you still hit the $110K limit and pay the full maximum for social security. Until you are over the limit, the point is moot.
If you are filing jointly, it doesn't make a difference. In your example it will be 5K out of 150K.
It could make a difference in state taxes, because some will allow to file separately on your state taxes, while filing jointly on the federal forms.
Ignoring taxes it could make sense to link it person paying for the insurance policy. Many insurance companies will give you a credit card to pay for co-pays, and prescriptions. If you go out of network the credit card can even be used to pay the part that is not covered by the insurance. I would think having them linked together will make the transactions smoother.