Maximizing Savings on Health Insurance: A Guide to Flexible Benefits

Organizations have realized the competitive advantage of hiring diverse teams to optimize growth. As such, they must find ways to manage the different needs of their workforce. Allowing workers to tailor their healthcare with flexible benefits is one effective approach.

Our guide explores flexible benefit plans and how they can help employers, workers and brokers save on health insurance. We also provide some practical tips for choosing the right plan so you can cater to varied needs.

What Are Flexible Benefits?

Flexible benefit packages enable employees to put pre-tax dollars toward the perks they value most. Benefits form part of an employee's compensation and include paid time off (PTO), retirement plans, travel stipends and health insurance. In addition, employers may choose to further support their employees' well-being by contributing to the overall package amount.

As employees have different priorities, they will value some benefits above others. For example, a single professional may find travel stipends very attractive, while employees with young children may put a higher emphasis on healthcare.

Tailored Health Coverage

As employees have varying health concerns, one benefit they can customize further is their health insurance. By signing up for a specialized account, they can use their contributions to pay for out-of-pocket medical expenses such as:

• Doctor and specialist appointments: Whether an employee needs to see a doctor to renew a prescription or consult with a specialist for an underlying health concern, doctors' visits can add up. Having the funds to pay for these copayments helps them settle bills at the onset.
• Mental health sessions: Statistics reveal that approximately 23.1% of adults in the U.S. live with a mental health condition. Allowing your workforce to put funds toward therapy, life-coaching sessions and other wellness initiatives helps them bring their A-game to work each day.

• Prescription medication: Some chronic conditions require daily medication. Ensuring these expenses are covered helps to minimize financial stress each month.
• Vision-related expenses: Workers rely on their vision to handle day-to-day tasks. Offering funds for eye exams, glasses and contact lenses helps workers maintain their vision and handle crucial tasks.
• Chiropractic or physical therapy: Workers with reoccurring sports injuries or office jobs that require them to sit in front of a screen each day may require treatments to minimize pain on the job.

When people fall ill, they may have less ability to travel to medical facilities. They may also need to find and pay for child care during their recovery. Flexible benefit packages also allow workers to use their funds to pay for dependent care or to cover transportation costs.

How Do Flexible Plans Work?

Whether you plan to offer these plans or use the benefits, it's important to know how they work. Here's a synopsis of the typical steps:

• Choose benefit options: By partnering with a reputable benefit provider, you can select desirable benefits to offer their workforce. Some popular benefits include health insurance, retirement savings, education incentives and family leave.
• Determine contributions: You specify how much you will contribute for each employee, and employees can usually add pre-tax personal funds to ensure more benefits.
• Enroll employees: Companies can enroll workers in the flexible benefits package during onboarding. It's beneficial they provide some training on how teams can use the benefits for maximum value.
• Accessing benefits: Once the benefits are active, employees should be able to schedule medical services and use benefit credits to pay for them. In addition, teams should be able to track their submitted claims and the credits they have available for future use.
• Make necessary adjustments: Qualifying life events, such as getting married or having a child, change your medical needs. Employees can adjust their plans if they experience a qualifying event or during the company's annual enrollment period.

This setup will likely offer you a practical approach to reduce medical costs for your company and employees — yet it's worth running a pilot test initially. Consider enrolling a select number of employees in the program and soliciting their feedback. You can then make further changes as required. In addition, you can review competitor companies and list the benefits their teams find the most attractive.

Exploring Flexible Benefit Plans

Several flexible benefit plans are available, allowing employees to tailor their options to their needs. Here's an overview of the most popular products.

1. Health Savings and Flexible Spending Accounts

Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) are tax-advantaged accounts that help employees pay for medical expenses. As high-deductible health plans (HDHPs) require workers to pay greater out-of-pocket costs, HSAs help offset these medical expenses. They also provide more flexibility. Employees can choose to pay for services like fertility treatment, dentures and medical equipment, which insurance packages only sometimes offer.

FSAs are compatible with numerous health insurance schemes. Employers make these accounts available to workers, and employees must typically use their funds within the year. FSAs also cover various qualified medical expenses, resulting in more affordable healthcare.

2. Vision and Dental Coverage

Frequent eye tests and dental examinations benefit overall health — yet health insurance plans often exclude these expenses. Employees can use FSAs to pay for vision care bills, such as glasses, contact lenses and even corrective eye surgery.

Specific dental benefits also allow employers and workers to save money. Instead of employers paying for dental benefits at the onset, some products enable them to process claims when they receive them. The result is greater savings for companies, and employees can use these funds elsewhere.

3. Dependent Care Accounts

Using data from 2018, the PEW Research Center considered factors like inflation and calculated the average cost of child care for families in 2022. The figures range from $5,357 to $17,171 — putting a significant dent in anyone's salary.

An increasing number of employers are offering their teams dependent care benefits, allowing workers to use them for preschool, daycare, nanny and babysitting expenses. In addition, employees may be able to use this benefit for elderly care expenses, helping to offset some of the bills that come with caring for an aging parent or loved one.

4. Commuter and Transit Accounts

While there has been a rise in remote work, many companies still value the concept of employees coming into the office and conducting meetings in person. However, the costs of getting to and from the workplace can add up. Some companies offer commuter and transit accounts to counter the following expenses:

• Mass transit: Workers who take the bus, ferry or train to work qualify for this benefit. Compensation may come in several forms — such as tokens, vouchers or fare rebates.
• Van-pooling: This transportation option requires at least seven adults with the driver. In addition, the vehicle must log at least 80% of work-related mileage to qualify for this benefit.
• Parking: Some workplaces require employees to park their cars offsite, increasing parking charges. Flexible benefits help to offset these expenses.
• Ride-sharing: Ride-share applications provide an additional way for employees to get to meetings or worksites, yet the fees can add up. Companies can preapprove apps to ensure a more affordable way to travel to meetings and conferences.

5. Lifestyle Spending Account

Travel costs can mount up, from specialist visits to regular healthcare treatments. A Lifestyle Spending Account can help offset some of these travel costs within a 100-mile radius.

If an employee or their dependents need to meet a medical professional frequently, they can use the funds in this account for fuel costs, plane tickets or lodging. As medical treatments can take up a significant chunk of the day, you can also use some of these funds toward meals.

Advantages of a Flexible Benefit Plan

The ability to customize health insurance with desired benefits is a win-win situation for employers, employees and brokers. Here's how flexible benefits boost overall happiness in the workplace:

• Attract and retain top talent: In a competitive market, employers look for quality employees to give them an edge. Offering a more attractive benefits package helps you attract top workers and minimize turnover.
• Increased job satisfaction: Employees who feel rewarded for their hard work are more likely to engage with team members and collaborate on tasks. This results in higher productivity.
• Cost-savings: Employers can specify how much they want to contribute to an individual's health coverage, reducing any costly surprises. In addition, employees and companies that sign up for health benefits qualify for tax rebates.
• Reduced administration: Curating a benefits package that meets all employees' needs can be overwhelming for Human Resources (HR) specialists. Giving employees autonomy removes this administrative headache.
• Empowered workforce: Employees who can access affordable healthcare can keep themselves and their families healthy. This enables them to be in a good space to reach their full potential during working hours.

Strategies for Health Insurance Savings

The old adage is true — knowledge is power. Knowing how to get the most from flexible benefits can help you optimize your savings. Here are some tips to implement:

• Partner with experienced providers: Working with a third-party provider gives you products that ensure optimal savings for employees and employers. It also allows you to access the relevant technology, making the process more seamless.
• Leverage technology: Specialized apps help employees learn more about the benefits they can access and help companies track the benefits employees use, making monitoring and claiming expenses simple.
• Provide education and training: Employees can only use the benefits they know they can access. Provide adequate training on the benefit offerings and how staff can apply for them.
• Track your savings and adjust: As the year progresses, staff could need treatment for a specific health concern or their family structure may shift. Allowing employees to change their plans can help them maximize the benefits.
• Maintain compliance: Companies offering these benefits to employees must ensure they meet appropriate health and tax laws. Maintaining all compliance documents can help avoid unnecessary fines and penalties.

How to Save on Health Insurance With Flexible Benefits

Once your employees have chosen an HSA, FSA or other flexible plan, you can help them find ways to maximize their benefits. Consider these tactics to optimize savings:

• Understand plan terms and rules: When enrolling in a plan, take a moment to learn specific terms and note deadlines that will impact your health coverage. Be sure to clarify anything unfamiliar with HR so you don't neglect a benefit.
• Prioritize preventive care: Annual eye tests and dental checkups are often included in flexible benefit plans. Scheduling these appointments will save you money in the long run.
• Shop around for healthcare: Before planning an elective procedure, get quotes from relevant professionals and consider their services. Some practices may offer different payment plans, which makes these procedures easier.
• Consider tax advantages: Some health plans — such as HSAs — will provide better tax advantages than others. Putting funds into an account like this will reduce tax liability later on.
• Combine benefits: Some employers allow a combination of FSAs, HSAs and other benefits. If you can group benefits, you'll likely improve your tax status, ultimately saving you money in the future.
• Maximize your contributions: While putting away money each month can be challenging, some accounts allow you to use these funds when you retire. Putting aside money for this period in your life will benefit you as you age.

Employees consider health-related benefits as a significant driving factor for any job. As an employer or broker, it's worth talking with an expert to find out how you can offer the best benefits for a more discerning price.

Optimize Your Savings With The Difference Card

Flexible benefits allow employees to prioritize the compensation elements they value most and let employers optimize their spending and savings.

If you're a company wanting to advance your competitive edge with flexible benefits, learn more from the professional team at The Difference Card. We'll help you tailor your plans to your employee preferences, helping you save money and retain top talent with desirable benefits! For more information, request a proposal or review our products online and take the first step toward maximizing savings on health insurance.