Greater benefit flexibility can result in a greater administrative complexity to the company or firm

Employees can start to appreciate more their benefits and therefore increases or improves their morale and productivity.

Employees can be more involved in controlling or balancing their benefit costs

Employees can always change their benefits as life fluctuates.

Need to explain to employees the various choices available as employees might not understand or have difficulty in choosing their needed benefits.

Extra cost involved in introducing the scheme

Employees are provided with a default plan. Core compulsory benefits such as life insurance and pensions have to be maintained.

Employees are provided with three or more plan packages to choose from. Flex dollars are assigned, employee choose from normally three modules with different plan designs and different price tags.

Similar to chequing accounts. Amounts are allocated to each employee's account each year and the employee uses the account to pay for health and dental expenses that are not covered under his/her benefit plan, or for deductibles and co-insurance. These accounts can be provided on a stand-alone basis within a traditional benefits plan or as part of a flexible benefits plan.

Employees are allocated a fund of money to spend on benefits from a menu. The value of the flex fund is sufficient for employees to buy their existing benefits and retaining them without additional cost.