The spread of flexible benefits in Asia Pacific is finally living up to the hype. For example, in Singapore one out of five employers are now having or are actively thinking about implementing flexible benefits.¹
This is largely because the cost of web based technology has come down significantly and its ability to mass produce benefit administration makes flex an affordable option even for small businesses.
So what are flexible benefits?
The overall concept behind flexible benefits is flexibility and choice. There are no standard flexible benefit plans. In a typical flexible benefit (or cafeteria benefit) arrangement, employees are given a benefit allowance and select from a menu for the benefits and benefit levels most appropriate to them.
In most cases, the employer defines certain benefits that the employee must select, which are known as "core benefits". These benefits are normally for the employees' protection or are a legal requirement. Employees then choose from a range of benefits with their remaining benefit allowance to complete their benefits packages. It is quite likely that after benefit enrolment, there will still be balances in their benefit allowance. These will be credited to their Flexible Spending Account (FSA) which they can use to pay for items in a menu of approved items.
