Types of flexible benefits programs

In addition, more employers are using bonuses, perks, and incentives to recruit and retain employees. Many leading employers offer extra benefits, including health club memberships, flexible schedules, daycare, tuition reimbursement, relaxation classes, and even on-site dry cleaning. Under the Patient Protection and Affordable Care Act Obamacare , minimum standards are set for health insurance companies regarding services and coverage.

Most employers with 50 or more employees are required to offer health care plans or pay a fine. Health care exchanges have been set up for employees who aren't covered by employers or who elect to seek coverage outside their employer plans. Most plans provide coverage for visits to primary care physicians and specialists, hospitalization, and emergency care.

Alternative medical care, wellness, prescription, vision, and dental care coverage will vary by the plan and employer. Employers are required to provide health care to employees who work at least 30 hours per week. Some though not many part-time workers are covered by employer plans.

Dental Care Plan Coverage: Companies with dental care benefits offer insurance that helps pay a portion of the cost for dental treatment and care. Depending on the company's policy for dental care benefits, dental coverage includes a range of treatments and procedures. Paid Holidays: The law does not require employers to provide their employees with paid leave for holidays. However, many employers make sure that their employees get time off for holidays paid and unpaid or provide overtime pay for those willing to work on a holiday.

Pay Raises: Some employers increase wages for everyone a certain amount each year to keep up with inflation. There are also different types of incentive pay that allow employees a chance to earn more on a merit system. A common type of incentive pay is commission. Inside sales or customer service employers frequently try to motivate employees to upsell customers for a commission.

Severance Pay: Employers are not required to provide severance to employees that they lay off due to downsizing or redundancies. However, many employers want to help these employees who they would otherwise want to keep if their budget permitted. Therefore, they choose to offer severance pay and benefits to these employees. Breaks and Flexible Schedules: To attract top talent, some employers offer flexible paid work schedules that include minute or longer breaks for rest, fitness, and recreation.

Also, employers may compensate employees for meals and events that include face-to-face time with prospects and customers. Hazard Pay: Jobs in security, construction, military, and other dangerous professions usually provide hazard pay to any employees that must work in unsafe conditions.

These may include extreme weather, dangerous equipment, violent environments, or working at extreme heights, for example. College Debt Assistance: Because of the growing student debt crisis, some employers are granting debt repayment assistance. There are no current laws requiring employers to do this, but it is a great perk for employees struggling to make ends meet as they begin their professional careers.

Other benefits can vary between industries and businesses and are sometimes referred to as "fringe" benefits. These perks, also known as "benefits in kind," can include:. Whether you are job searching, deciding on a job offer, or happily employed, it's important to review what benefit coverage is provided by the company and to decide whether the employee benefits package is one that fully meets your needs.

It's also important to take full advantage of what the company provides to employees. There are employee benefits questions you should ask to ensure that your overall compensation plan is right for you and your family. Also, ask specific questions based on your needs and on the criteria that are important to you. Department of Labor. Accessed Dec. Bureau of Labor Statistics.

Actively scan device characteristics for identification. These companies, as well as larger ones, have subsequently sought palatable means by which their employees can contribute to the cost of benefits. One option is a flexible benefit plan. Indeed, many businesses have begun to offer flexible benefits in order to retain a competitive benefits package for employees.

There are several types of flexible benefit plans, including cafeteria plans and flexible spending accounts. A type of flexible benefit plan known as a cafeteria plan enables employees to choose between receiving some or all of an employer's nontaxable benefits, or receiving cash or other taxable benefits such as stock.

These plans were established by the Revenue Act of and are regulated by Section of the Internal Revenue Code. Only certain benefits can be offered under a cafeteria plan, though employers may offer any or all of these benefits. These include: health and group life insurance as well as medical reimbursement plans for non-insured expenses; disability, dental, and vision coverage; day care or elder care; k plans; and vacation days.

Tuition assistance and other fringe benefits are exempt from the plans, even if they are not taxable. Funding for cafeteria plans may come from the employer, employee or both. Often, the employee receives a spending credit, with which he or she may choose to "buy" benefits from a list of options such as health insurance, life insurance, etc.

The benefits themselves may be provided in cash or via actual coverage. In order to ensure these plans are fair to all employees and to limit the number of changes employees can make to their plan, the IRS has set up a number of restrictions. For example, employees are unable to carry over unused credits or benefits to the next plan year.

In addition, employers need to be sure that no more than 25 percent of the tax-favored benefits go to "highly compensated" employees. A flexible spending account FSA is a tax-deferred savings account established by an employer to help employees meet certain medical and dependent-care expenses that are not covered under the employer's insurance plan.

FSAs allow employees to contribute pre-tax dollars to an account set up by their employer. They can later withdraw these funds tax-free to pay for qualified health insurance premiums, out-of-pocket medical costs, day care provider fees, or private pre-school and kindergarten expenses.

There are three main types of FSAs. First, premium-only plans, which allow employees to set aside funds to pay medical and life insurance premiums. Second, unre-imbursed medical expense plans, which allow employees to set aside money for projected health care expenses not covered by insurance. Third, dependent care reimbursement plans, which allow employees to set aside money for day care of dependent children.

However, with five generations in the workplace , the best benefits for each employee can vary greatly. Offering a flexible benefits package is the best way to ensure that your employees are receiving the benefits that are the most important to them. Employee benefits, also known as fringe benefits , are the c ompensation that an employee receives outside of their standard wages. When you offer flexible benefit plans, you provide a set of benefits that each employee can pick and choose from e.

Flexible benefits have become extremely popular with both employers and employees. Editor's note: Need health insurance for your business?

Fill out the below questionnaire to have our vendor partners contact you with free information. There are several types of employee benefits that you can offer, depending on the flexible benefit plan you set up. One of the most common flexible benefit plans is known as a cafeteria plan.

A cafeteria plan comprises several benefits to cover eligible expenses, as long as they meet the criteria outlined by the IRS in Section Although flexible benefits can take many forms, Carla Yudhishthu , vice president of people operations at ThinkHR and Mammoth HR , said they generally pertain to employee needs associated with work, home life and planning for the future.

Flexible benefits are popular among employers and employees for several reasons. However, the core benefits pertain to recruitment and retention, employee flexibility, and employer confidence. It is essential for small businesses to offer comprehensive benefit packages if they want to stay competitive with other employers within their industry.

Employees place high importance on benefits, and for some, benefits packages can be the deciding factor between two jobs. If you want to attract and retain top talent, you should expect to compensate them accordingly. Every employee is unique, and benefits should reflect that. An unhealthy older employee with a large family is going to want different benefits than a young, healthy, single employee laden with student debt.

Flexible benefit plans allow your employees to choose only those benefits that are relevant to them. Your employees know what type of benefits will best suit them. When you offer a flexible benefits plan, you don't have to try to create a plan that appeases everyone.

Instead, you can leave the choices up to your employees and rest assured that your employees are getting the right benefits to accommodate their health, budgets, and personal and professional happiness. Just as there are several advantages to offering flexible benefit plans, there are a few disadvantages to be aware of.

The primary drawbacks pertain to time, resources, communication and cost.