What are Flexible Benefits? Are they Beneficial?

In a world where everything is customizable, it’s not a shock that group benefits are becoming more flexible as well. In the world of group benefits, flexible benefits (or flex benefits) are considered to be the hot new product, whereas traditional benefits plans can seem boring and cumbersome. There are advantages and disadvantages to for each, researching your options is important before implementing any whole sale changes. So what are flexible benefits?

Simply put, flexible benefits are a program where the employees have the opportunity to choose between at least two (likely more) health and dental options. Employer (and employee depending on how you structure it) contributions are made in the form of flex credits, or flex dollars. With these credits employees can purchase benefits suited to their needs. If the employee does not have enough flex credits, they usually have the option of purchasing more coverage through payroll deductions.

Here are the most common types of flexible benefits offered:


Benefits are added on to a traditional benefits plan. For example, employees could purchase critical illness or home insurance to supplement their traditional health benefits.


Employees are given a choice of purchasing two or more pre-defined plans. These plans can be designed to suit different age groups, genders, lifestyles, etc.

Core +

Similar to the add-on style, a traditional group benefits plan is reduced to a basic or core level of coverage. Employees are given flex credits to purchase additional coverage in areas that suit them.

Cafeteria Style

Picture your favourite buffet restaurant, this type of plan offers the most choice and flexibility. The menu is defined of course, but employees are given a choice on the level of coverage they want within each benefit.

You can see that flexible benefits can be as simple as adding components to your existing plan, or you can just offer a wide variety of choices to your employees and let them choose what is best for them.

Are flexible benefits actually beneficial? Most employees would love to have more variety would approve of such a plan. But what are the benefits for the employer?

  • Financial Control – Flex plans allow the employer to set a spending limit each month, standardizing costs and making it easier to budget.
  • Tax Deductions - Employer contributions are tax deductible, similar to many plans.
  • Recruitment and Retention – Are you looking to attract younger talent? Or retain existing talent crucial to your business? Flexible benefits are a great way to stand out from the competition and avoid costly turnover.

If you want to learn more about flexible benefits for your small business, we encourage you to contact the experts at DENT Benefits!

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