Traditionally, benefit plans are based on the model that all plan members share the cost of providing the benefits - the healthy with the not so healthy, younger with older, single with families. The basic principle of group insurance is that spreading costs over large numbers makes it cheaper for everyone.
So-called “flex” plans are different. Sometimes called cafeteria or smorgasbord plans, members must select benefits from a menu of choices. Flex plans are individual insurance plans. Costs are not shared among a group - members who are sick, older, or have dependents pay more. The young and healthy pay less, or opt out.
Fast facts about flex benefits:
- They reduce coverage
- They pass on benefit costs to you
- They erode decent benefit plans
- They are designed for the young, healthy and well-off
Why are “flex” plans bad for workers? Download the fact sheet.