Flexible benefit programs are catching on in Canada, and the vast majority of employers are pleased with their decision to implement such programs, according to a new study.
The study found that flexible benefits programs are more prevalent now than they were four years ago. More than half (56 per cent) of the 136 companies responding to the survey either already offered or are planning to offer flexible benefits to their employees within the next two years. Only seven per cent claimed to have no interest in offering flexible benefits, a significant decrease from the 28 per cent reported four years ago.
“The results of our study confirm that flexible benefits plans are more popular than ever in Canada,” said Cathy O’Bright, a benefits consultant in the Calgary office of Hewitt Associates. “Employees want options when it comes to choosing their benefits and Canadian employers are doing whatever they can to meet this need.”
Flex-ability: Employer Attitudes toward Flexible Benefits
, conducted by Hewitt Associates, showed that flexible benefits have a very bright future. Of the organizations surveyed, 93 per cent said they plan to have such a plan in place in the future.
Why are companies implementing flex plans?
The two main reasons continue to be to better meet employee needs and to contain future benefit cost increases. Companies are realizing success in these key areas. For example, 94 per cent reported that flexible benefits met or exceeded expectations around addressing employee needs while 71 per cent indicated flexible benefits met or exceeded their expectations in containing cost increases.
Organizations that are resisting offering flexible benefit plans are doing so mainly because of concerns over administration (33 per cent) and communication challenges (21 per cent). But companies with flexible benefits plans in place said that these problems had not materialized, with 80 per cent indicating their administrative solution met their requirements and less than 10 per cent expressed dissatisfaction. Communication challenges don’t appear to be an obstacle either, as 80 per cent of organizations felt that flexible benefits met or exceeded their expectations for enhancing employee understanding.
Employees are customizing plans
Employees seem to be taking advantage of their ability to choose their own benefit options. Half of the respondents indicated that between 11 and 50 per cent of their employees make at least one change to their personal benefit package at each re-enrollment.
Medical and dental benefits continue to be the ones most frequently offered as part of a flexible benefits program, with 93 per cent of respondent organizations offering choice in this area.
What is a flexible benefits plan?
In a flexible benefits program, employees are able to choose the type and level of benefits coverage that best suit their needs. For example, young, single workers might opt for a minimum level of coverage while married employees with children would likely select a comprehensive package.
Check out the Nov. 18, 2002 edition of Canadian HR Reporter for more coverage of flexible benefit plans. Not a subscriber? Click on the link below to start your subscription.