Key
Features
-
Contributions by employees are
tax deductible
-
Flexible spending elections
are subject to "use it or lose
it" requirement
High taxes, dramatic increases
in the cost of employee
benefits, and recognition of
diverse needs among employees
have all come together to create
powerful incentives for
employers to review the cost and
value of employee benefit
packages.
As
a result of such reviews, more
and more organizations are
making the decision to move to a
flexible benefits plan. Today
over one million employees
throughout the U.S. are covered
by flexible-type plans.
Now, with a Flex Plan, employees
of smaller firms can have much
the same flexible compensation
advantages as employees of such
corporations as Exxon, Pepsi
Cola, Chemical Bank, Quaker
Oats, Marriott, Morgan Guaranty
Bank, B.F. Goodrich, Motorola,
Alcoa and hundreds of other
major corporations.
The
popularity of flexible
compensation can be attributed
to the distinct advantages such
a plan holds for the employer:
Flexible compensation provides a
means for the organization to
take advantage of current tax
laws, resulting in a substantial
savings in benefit dollars.
-
Flexible compensation provides
a vehicle that enables
employees to pay for certain
expenses with pre-tax dollars.
-
Gain control of benefits
costs.
-
Provide better benefits
options.
-
Gain the ability to make a
wide diversity of employees
happy.
-
Educates employees about
benefits and provides
incentives for employees to
use the benefits efficiently.
-
Gives employees "ownership" of
selected coverages which in
turn fosters greater employee
appreciation for the overall
benefit program being
provided.
In
addition to the tax savings, one
design technique presently being
used by the Fortune 500
companies to reduce costs with
the integration of a Flex plan,
is a cost-containment approach
which can be especially helpful
to employers who are considering
plan design changes, such as
increased deductibles and
co-insurance.
It
is worth noting, however, that
it is not necessary for an
employer to change the present
benefit structure in order to
enjoy the advantages that
flexible compensation brings to
both employer and employee. |
