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Employees want benefit plans that meet their individual needs. Employers need to curb escalating health care costs. Companies find they can achieve both of these goals when they implement flexible plans that allow employees to choose the type and level of benefits that best meet their needs.

In a survey of nearly 200 Canadian organizations earlier this year, Hewitt found that more than half currently offer or plan to offer flex plans in the next two years. Another third of these companies are strongly considering these plans in the near future. The most popular benefit options offered in flex plans continue to be medical and dental, although retirement options, especially group Registered Retirement Savings Plans, are growing in popularity.

With the rapidly increasing cost of providing retiree benefits, more than a third of survey respondents are also offering flexible benefit options to this population. "Significant cost escalation and accounting requirements for retiree plans have put even more pressure on employers to control benefit spending," says Sarah Beech, a benefits practice leader in Hewitt's Toronto office. "Given the success companies are having managing benefit costs with flex plans for current employees, many see the wisdom of starting to do so with retirees."

Implementing flex benefits is not without its challenges. Companies surveyed said that administration and communication are their biggest concerns. Nevertheless, 95% of respondents with flex plans indicated that their administration solution meets their requirements. Nearly half use third-party administrators or insurance carriers for help with transactional activities such as enrollment and recordkeeping. For communication, a majority are turning to online channels to educate and interact with employees about their benefits.

The survey results confirm that Canadian organizations are continuing to implement flexible benefit plans and also adapt them to meet changing needs, in spite of any challenges. One of the most significant findings was the response to the question of whether those respondents with flex plans would implement them again if they had the choice: A full 100% said they would.

A copy of the full study, Flex-ability: Employer Attitudes Toward Flexible Benefits, is available by contacting infocan@hewitt.com.

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