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The ultimate flexible benefits guide for the modern workforce

The modern workforce demands more from their employer's benefits. This flexible benefits guide helps employers with important considerations.

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The ultimate flexible benefits guide for the modern workforce

Employees are looking for more from their benefits package. In many ways, their benefits package can be just as important as their salary. The standard employee benefits that have been offered for years are no longer meeting the requirements that employees require. It's important to consider benefits that will address the individual needs of remote, in-office, and hybrid team members.

This is where a flexible benefits plan can be especially useful. In this guide, we'll explain what flexible benefits are and why they're so important to the modern workforce.

Flexible benefits 101

A flexible benefits plan allows employees to choose from a range of benefits that are best suited to their individual needs. Flexible benefits plans are a solution to address benefit gaps.

This approach to benefits provides employees with control over their benefits package. It also provides cost savings for both the employee and the employer.

Employees are typically given a set amount of money to spend on different benefits options. 

Examples of these benefits options include wellness programs, internet bills, work-from-home furniture, and hundreds of other perks and benefits. This system allows employees to create a custom benefits package. It is designed to best fit their unique needs and preferences. It is also in line with the policy their employer sets.

Flexible benefits plans are often administered through an online portal or platform. Employees can view their options and make selections based on their individual needs. These plans can also help employers save money by reducing the administrative costs associated with traditional benefits packages.

Historically, employers distributed fringe benefits and perks through individual vendors or point solutions. With point solution fatigue, vendor management, and low utilization, flexible solution providers entered the marketplace. These provide a more delightful experience for employees and employers.

Flexible benefits plans offer a more tailored approach to benefits. This leads to greater employee satisfaction, increased retention rates, and improved financial wellness for both employees and employers.

Funding a flexible benefit plan

Employers will need to determine how much they’ll contribute to each employee’s account. A good starting point is to divide the available budget by the number of employees.

Important questions to consider when funding will be:

  1. Will you deposit the full perk funding amount on January 1st of each year? Will employees have the option to spend money right away or will there be a delay? Will you spread the contributions evenly on a monthly basis or even a quarterly basis?
  2. What happens to unused LSA amounts at the end of the year or funding period? Will employees be able to roll over any funds, or will you adopt a use it or lose it policy?

If you need help answering these questions, don’t hesitate to <span class="text-style-link text-color-blue" fs-mirrorclick-element="trigger" role="button">reach out</span> to our Forma experts.

Common expenses in a flexible benefit plan

Employers have the opportunity to design which expenses will be covered in their flexible benefits plan. The Lifestyle Spending Account (LSA) is an excellent way to promote a healthy lifestyle and administer a flexible benefits plan.

Expenses found in LSAs can include:

  1. Health & Wellness: These are expenses that go beyond traditional health coverage and can include therapy, mental health coaching, spa and facial treatments. If the expense goes toward your employees’ health overall, it would be covered. Gym memberships are a popular expense in this category. Consider nutrition and lifestyle coaches as eligible expenses as well.
  2. Commuter Expenses: The cost of getting to and from the workplace can really add up. By showing your employees that you care about their travel expenses can increase employee satisfaction. Consider adding parking passes, rideshare, and public transit costs.
  3. Student Loan Repayment: Federal student loan debt is still a major expense for many. There are also tax advantages to covering this expense.
  4. Caretaker costs: This covers costs for pets and children. Expenses for daycare, food, private tutors, after-school programs, babysitting are all eligible expenses under this program. 

The future of benefits programs

The future of benefits programs is defined by flexibility and custom plans. Gone are the days when employers could apply a standard benefits package to every employee. In a 2020 survey, 62% of employees said they would take a lower salary in exchange for better workplace perks. With Lifestyle Spending Accounts and flexible benefits, the modern workforce has a solution.

<span class="text-style-link text-color-blue" fs-mirrorclick-element="trigger" role="button">Reach out to Forma experts</span> for a consultation on how to create the perfect flexible benefits solution.

Download a more detailed analysis on the ROI of flexible benefits here.

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