FLEXIBLE BENEFITS

Inbasket benefits/Ala-carte/Flexible system of benefits and services are gaining popularity in multinational companies.
Advantages Benefit and Services
1. Employees choose packages that best satisfy their unique needs.
2. Flexible benefits help firms meet the changing needs of a changing workforce.
3. Increased involvement of employees and families improves understanding of benefits.
4. Flexible plans make introduction of new benefits less costly. The new option is added merely as one among a wide variety of elements from which to choose.
5. Cost containment - The organisation sets the dollar maximum. Employee chooses within that constraint.
Disadvantages
1. Employees make bad choices and find themselves not covered for predictable
emergencies.
2. Administrative burdens and expenses increase.
3. Adverse selection - employees pick only benefits they will use. The subsequent
high benefit utilization increases its cost.
4. Subject to non-discrimination requirements in Section 125 of the Internal Revenue
Code.

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