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Flexible Benefit Scheme (Purpose (Device for controlling cost, Meet…
Flexible Benefit Scheme
Definition
Allows employees to pick and choose their own benefits from an array of available benefits that meet their needs the most.
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Types
Modular
This plan consists of a number of pre-designed standardized modules, each packaging different types of benefit options together that are designed to meet the needs of a particular employee segment in mind.
Core plus
Core-plus is a two-part plan consisting of a fixed core coverage and a flexible coverage. The core is certain benefits that are non-optional and cannot be traded away.
Full Flex
all benefits are completely optional. Employers need not provide core benefits to employees (except those required by law) and each employee is given a fixed amount of flexible credits and all available benefits are priced.
Employees are then free to mix and match the type and level of benefits they desire with the allocated credits under the full flex plan.
Challenges
Adverse Selection
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Poor selection
Solution: utilize user-friendly computer games developed by various consultancy firms to help employees make choices under the FBS
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Managing other concerns
Union opposition
Solution: As union members understand and become more familiar with the attractions of FBSs, it will be covered by collective bargaining agreements and the power of unions will then be maintained.
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