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March 31, 2022

Flex Benefit Plans For the Employees' Healthcare and Well-Being

According to research, platform employment (Direct-to-consumer Companies) has long been thought to help individuals fulfill their financial demands amid a crisis. COVID-19 placed this study to the ultimate test. The economic downturn gave everyone an opportunity to learn more about the role of platform work in financial resilience.

Accenture published a report on the impact of platform work on job markets. According to the study, platform employment provided a financial safety net in Canada during COVID-19, with 75% of ridesharing and delivery workers in Canada considering platform job revenue to be critical or crucial during the pandemic. Many people who lost their employment but were not eligible for government assistance turned to platform work to keep afloat. The data shows that delivery sign-ups mirrored the unemployment rate, providing people with other job options. There was a 72% link between the number of people who signed up for delivery labor and the unemployment rate in Canada.

Employers strive to accommodate the different requirements and expectations of their workers. The diversity of demands in terms of coverage is becoming apparent, just as it is with flexible working hours and a work-life balance. A company can provide employees benefit options rather than a pre-defined (one-size-fits-all) bundle of benefits under a standard benefits plan.

Read more: Managing Costs in Your Business Through Employee Attrition

Flexible Benefits

Flexible benefits plans allow employees to pick their benefit types and allocate their payments according to their priorities, recognizing that their requirements vary over time. Benefit features not typically accessible with regular plans can also be included in these plans.

Employers might also use flexible benefits as a cost-cutting technique. Rather than being governed by increases in premium prices at each renewal, the employer can set the level of financing (benefit dollars) for the plan each year. The flex plan can also entice plan members to pick perks with cost management features by structuring or pricing certain benefits attractively.

Flexible credits, often known as flex credits or flex dollars, are used by employers to make contributions. Employees use these credits to purchase benefits that are tailored to their specific requirements and budgets.

Modular Plans

Employees have the option of utilizing their flex credits to purchase two or more predefined programs or modules. The amount of security provided by the modules varies. Employees can contribute to the plan's cost through payroll deductions, allowing them to increase their level of coverage (to a module that provides more comprehensive coverage).

Read more: Why Employee Benefits Matter

Core+ Plans

The current benefit plan has been reduced to a primary or core set of benefits that must be offered to all employees. A modest amount of life insurance and limited coverage for prolonged health care and disability insurance is generally included in the basic level of coverage. Flex credits are offered to employees to supplement their core benefits and purchase coverage in areas not covered by the core plan. Employees are frequently offered the option of acquiring extra coverage through payroll deduction if their flex credits are inadequate to achieve the appropriate level of coverage. Employees have more options with this technique of flexible benefit plan design than with Add-On or Modular approaches.

Cafeteria Plans

This sort of package gives you the most options. Employees have the option of selecting any combination of perks from a menu of options. Employees can also choose the degree of coverage they want for each bonus. Employer-provided flex credits are used to purchase coverage. Contributions provided by the employee through payroll deduction can help to improve range.

Read more: The 3 Important Parts To Your Progressive Employee Benefits Plan

What type of plan should you offer to your employees?

To choose an appropriate plan, employers must weigh the following considerations:

  • Time: A plan with options will need more administrative work on the part of the employer than a typical plan:
  • Employee selections and deductions that are duplicated.
  • Renewal of enrolment (annually or every 2 years, when employees can change their choices subject to certain restrictions).
  • Life experiences (list of events entitling employees to change their preferences without constraints providing the employer is notified soon enough)
  • If you have limited money, a modular plan may be better for you than a flex plan because it offers fewer possibilities. 

  1. Communication: Communication is essential to a successful modular or flex strategy. In the best-case scenario, employees should be kept informed before, during, and after the implementation process. They must also be told of the new plan's implementation. A more complicated strategy will need more thorough communication with staff to thoroughly comprehend how to use it to their benefit. A modular program would probably be your best choice if time is limited or you feel your people's present knowledge level does not lend itself well to the effective implementation of a complex strategy.

  1. Group size: To be effective, a modular or flex plan must have at least 10% -15% of employees participating in each choice. It's pointless to have a very flexible schedule if 90% of employees choose the same benefits package. A modular layout is more likely to fulfill your demands and those of your staff if your company is tiny.

Employers can accommodate a range of lifestyles and goals by offering a full-choice flex plan or a modular plan. Employees will be more aware of benefit costs due to these schemes, and they will be more likely to shop for health care responsibly. BP Consulting can help you with these tasks.

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