Flexible Benefit Plans Help with Costs, Employee Retention

October 14, 2009 (PLANSPONSOR.com) - Canadian organizations that offer employees multiple benefit plan options may have an advantage when it comes to weathering economic highs and lows, according to a recent survey by Hewitt Associates.

The majority of respondents to the survey say that flexible benefits plans have enabled them to contain benefit cost increases and made them well-positioned to attract and retain the employees they need to regain and grow their business, a press release said. Of the 211 organizations from across Canada that responded to Hewitt’s Flexible Benefits in Canada 2009 survey, 60% offer a benefits plan with a flexible component, up from 41% in 2005 when the survey was last conducted.

Of those employers with “flex” plans, three-quarters say these programs are meeting or exceeding their expectations in terms of the top three advantages they identified: meeting diverse employee needs, containing rising benefit costs, and improving employee recruitment and retention. The press release explained that in a flexible benefits program, employees receive flex “credits” or “dollars” and spend them on medical and/or dental benefits they choose from a range of options depending on their personal circumstances.

However, the survey results indicate that organizations are adding more than just medical and dental plan options to their lineup of benefits. “Many new offers focus on employee health and well-being,” said Tim Hadlow, a senior benefits consultant in Hewitt’s Toronto office, in the press release. “For example, wellness accounts, critical illness insurance, and health club memberships are on the rise. In addition, after the recent economic downturn, 30% of employers are making financial/tax counseling available – up from 18% four years ago – and 14% have introduced the new tax-free savings account as an option.”

Copies of Hewitt Associates’ Flexible Benefits in Canada 2009 survey report are available from Hewitt by calling (416) 225-5001, or by emailing infocan@hewitt.com .