- Zero savings Employers have been sold these plans by firms and other consultants ‘touting’ their costs. However, the savings to employees and employers cannot be demonstrated. As well as trying to change the recipe, employers will make their administrative departments work harder to manage the whole thing by comparing it to a fully ‘inclusive’ scheme that would make life easier and cheaper for everyone. Having a ‘flexible’ scheme requires an administration team, but if employers don’t have one, then they will have to turn to benefits management companies and insurance companies, incurring more costs. Having a ‘flexible’ plan with few employees will also lead to higher insurance costs in the long run as it divides the cost between employees, so smaller teams are penalized more by this type of initiative.
- New responsibilities Whenever ‘flexible’ plans make changes, employees will be forced to revisit the plan they chose. There are several possibilities available to them with variations and options which employees will have to analyze for themselves.
- Limited choice When choosing a group insurance plan, all coverages are included for any situation. In a ‘flexible’ plan, however, choices will have to be made according to the situation. If the unexpected happens, the employee will not be covered and will have to pay out of pocket.