Flexible benefits plans are offered by corporations to employees, and they are benefit plans that allow employees to choose the best plan for themselves from among a number of different options. This may include benefits such as health, dental, or vision insurance; stock investment plans; or flexible spending accounts that allow an employee to deposit pre-tax dollars in order to pay for medical expenses. Many companies also offer flexible benefits choices for retirement plans as well, to allow people to make different retirement choices based on their ages and goals for the future.
Health, dental, and vision insurance are some of the most common flexible benefits options offered to employees of a company. This may be referred to as a cafeteria plan, because employees can pick and choose the benefits they want; for instance, some employees might want all three, while others might choose to skip dental or vision coverage, and pay those expenses out of pocket. Different types of insurance plans might be offered as well, such as those with higher deductibles and a smaller monthly premium payment, or those which do not require those insured to visit providers in-network. The amount of choice that may be found on different insurance plans is often staggering, which is why it is important to fully understand the choices before making one.
Another type of flexible benefits plan often offered to employees is a flexible savings account (FSA), or health savings account (HSA). These allow individuals to contribute pre-tax income to the account, and then withdraw the funds as needed to pay for qualified expenses, such as medical bills. This is a good choice for people who are fairly healthy and rarely go to the doctor. In addition, it helps to reduce income taxes paid because the money deposited in the account remains tax free as long as it is used for the required expenses.
Retirement accounts may be offered as part of a flexible benefits package as well. Some employees might choose to purchase stock options in the company. Others might choose to contribute to a 401(k) or other type of account such as a 403(b) depending on the nature of the company; often, the company will match employee contributions to a certain amount. The choice generally depends on the amount of time the individual has left in the workforce, as well as on whether or not the company will match contributions, which is an excellent way to boost retirement savings, when available.