FLEXIBLE  BENEFITS       

In basket benefits/Ala-carte/Flexible system of benefits & services are attaining popularity in multinational companies.

Advantages

A.    Flexible benefits help firms meet the changing requirements of a changing workforce.

B.     Employees select packages that best satisfy their unique needs

C.     Enhanced involvement of employees & families improves understanding of benefits.

D.    Cost containment - The organisation sets the dollar maximum. Employee decides within that constraint.

E.     Flexible plans make introduction of new benefits less expensive. The new option is added up merely as one among a vast variety of elements from which to select.

Disadvantages

A.       Employees make wrong choices and find themselves not covered for predictable emergencies.

B.      Administrative burdens and costs increase.

C.       Adverse selection - employees only pick benefits they will utilize. The subsequent high benefit utilization enhances its cost.

D.      Subject to non-discrimination requirements in Section 125 of the Internal Revenue Code.