Flex Plan

[wsp]

OK, I'm completely out of my element here....just looking for info to point a client in the right direction (ie who to go to for the real expertise).

Years ago I worked for a firm that offered a flexible benefits plan that provided the employees with a base amount of dollars that could be put towards various benefit options. The base amount would provide the minimum coverage for most of the choices (medical, dental, life, disability). The employee could upgrade by using pre-tax deductions...additionally they could choose to use the reimbursement accounts for health, dependent care, etc etc. Lastly, we had the ability to set aside money to purchase additional vacation days and use for parking expenses.

Client asked about our firm doing something almost exactly like that for them....my answer was "Yes, I could find someone to do that for you... and they'll be better and cheaper too!"

Does all of this fall under a single plan document umbrella or is it piecemeal? Can my client go to a single Health & Welfare administration firm and get the documents and administration for this? Spendy? Client isn't extraordinarily large (100 people) so I would imagine firms like WWW would be out of the picture for cost reasons, but what about smaller firms? My guess is that whatever the cost, they will decide it's too expensive and will want to whittle away at the offerings until they reach the acceptable expense level. So does the typical RFP break down the costs by offering?

[jmor99]

wsp--yes, it could all fall under a single plan document. What you're talking about is a full-flex or true flexible benefits plan. Usually, the ee is using flex credits instead of flex dollars (the employer assigns the value of how many credits for which benefit). This is one way some employers try to hide the true cost of a benefit, or cost shift because the value is no longer tied to a dollar amount. Assigning flex credit values to a benefit can be tough for a small employer to do if there is no correlation to actual $ values. Yes, client can go to a single administrator for this.

As to an RFP breaking down costs by offering, I believe you could look at a typical RFP for typical 125 plans and the costs should be about the same. However, I don't think there are that many smaller TPAs that have systems that would/could manage vacation days, etc. Most are used to doing POP, MedRe, DCAP, Parking, etc.

One software vendor to a lot of TPAs is P&W Software of California. I think their system will administer flex credits. I'm sure there are plenty of others. Check with the ECFC. They have a list of vendors if I'm not mistaken. You could then check with the vendor for a TPA in your area using their system.

[GBurns]

The DataPath software should also be able to handle it quite easily and with good technical support. Try www.dpath.com and see if they can give you some TPA users.

[wsp]

Thanks to you both. Much appreciated!