Flexible benefits: a growing option. (Benefits Outlook)

Flexible Benefits: A Growing Option

HR executives in organizations with flexible benefits plans rate the plans high on effectiveness and low on problems. The concept of flexible benefits as an alternative to fixed benefits has existed since the early 1970s, but only recently has this idea begun to catch on among employers. There are several possible reasons for employers' reluctance to adopt a flexible benefits approach. In some instances, employers may have the mistaken belief that flexible benefits work only with highly educated workforces or in workplaces considered progressive. In other instances, employers may fear the complexities involved in developing and administering such plans. The confusing and sometimes threatening federal legislation regulating flexible benefits also may be a deterrent.

None of these fears, however, are justified. American Can Company, for example, dispelled the notion about "special workforces" when it implemented a flexible benefits program for all of its 8,000 employees. Benefits consultants as well as insurance companies are readily available to help employers with any administrative complexities. And the Tax Reform Act of 1986 has reduced legislative uncertainty about taxation of benefits under these plans.

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