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Flexible Benefits (Steps to administer (Step 1: Define the strategy, Step…
Flexible Benefits
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Types
Cafeteria plan
It offer employees multiple choices of benefits that are paid for by salary contributions on a pretax basis
Advantage: It gives employees an idea of what the benefit is truly worth and the cost that the employer is bearing
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Core-plus
The current benefit plan is reduced to a basic or core level of benefits that are provided to all employees on a mandatory basis.
The core level of coverage usually includes a small amount of life insurance and limited coverage for extended health care and disability insurance.
Modular plan
Employees are given the choice of purchasing two or more predefined plans or modules using their flex credits
Advantages
For employees
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Employees have a true idea of the full worth of the benefits package they receive and employers do not provide benefits that are not valued.
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For employers
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Employers are seen to be more responsive to the needs of an increasingly diverse, demanding and ageing workforce.
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Disadvantages
For employees
Employees could be putting in a certain amount of money each month for their plan and end up not being able to recoup that money if they do not use their benefits.
Flexible benefits cannot be transferred over to a different job if the employee decides to leave the company.
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Definition
A flexible benefit scheme is any scheme that allows a company’s employees to choose from a range of available benefits.