Flex Plan Options for Extended Health and Dental

May 12, 2014

As plan sponsors continue to look for benefits plan options that meet the needs of their employees, Flex benefits often come to mind.  Flex benefits have been human resources’ buzz words for many years and these plans give employees the option to design their group benefits plan to meet their individual needs.  However, true flexibility comes at a high cost.  So high in most cases, that only the largest of employers would be able to consider a flexible benefits structure. Enter Modular Flex or Flex Choice.

A modular flex plan will provide employees with an option to choose between a few benefit options; referred to as gold (top of the line plan), silver (middle of the road) and bronze (basic package) plans.  Typically, the plan coverage in the gold option contains almost all of the top tier components of the plan sponsor’s benefits plan and plan sponsor will usually require employees to optionally buy up to this plan through monthly payroll deductions.  Employees sleep better a night knowing their gold medal plan will look after almost all of their benefits requirements.

A silver medal plan would compare to a typical plan, or ‘standard’ program, and would cover the basic needs of an organization’s average employee. There could be an employee contribution to this program but it would be nominal in comparison to the gold plan.  The bronze medal plan would just cover the major, or catastrophic items and employees would be subject to higher coinsurance or deductibles.  Because this plan would typically come at a lower cost, an employer may free-up some ‘benefit’ dollars to contribute to other areas such as a Retirement Savings Plan or Health Spending Account.

In this type of flex plan, like other types, employees would have an enrollment date and time period to make their selections.  They will have to live with their selected options until the election date comes up – typically every 2 years or more depending on the size of the employee group. This will help mitigate anti-selection against the plan which could lead to higher claims and ultimately, higher premiums for everyone including the plan sponsor.

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