Talking About Financial Matters That Affect You and Your Organization
Modular Flexible Benefits
Dec 19th, 2019
Currently approximately 77% of benefit plan members are enrolled in a traditional one-size-fits-all group benefit plan. When asked, 64% of members would prefer flexible choices on the coverage their program provides. Typical flex plans provide members with options to purchase more robust coverage to enhance the base program offered. Since members would own the design of their program, they would select the coverage that is meaningful to them and therefore are more likely to use the program to their advantage. Flex plans can be difficult to administer and communicate and are often not available to smaller employers.
To offset these issues about higher claims and availability, modular flex plans provide an opportunity to deliver choice with manageable constraints. A modular flex program starts with at least two options but can include many more. Feedback from organizations suggests three modules is the best number to reduce complexity but provide a wide range of choice based on personal preference.
Implementing a modular flex program will depend on the insurer/provider acceptance on the plan design as well as a communication and education plan to help members understand their choices. Balancing the frequency of choice and the logistics of program pricing suggests that having members commit to a 24-month lock-in provision helps reduce anti-selection risk and increase the number of possible insurer/providers. These lock-in provisions often include an opportunity to make changes in the case of a life event (birth, death, marriage, divorce, and spousal coverage loss).
One challenge often faced by plan sponsors is finding insurers/providers willing to implement a flex program. Selectpath’s Beneflex partners can entertain these modular flex programs with little issue.
Reach out to your advisor or client care team member to learn more about how you can get the power of Modular Flex Benefits working for you.