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Benefit

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16 views45 pages

Benefit

Uploaded by

myusriani
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Flexible Benefit

The Freedom of Choice

by Mariawaty Santoso, GRP


genda
About Flex
Starting a Flexible Program
Design & Calculation
How does it work ?
About Flex
What is Flex?
A flexible benefits system provides a

framework for staff to choose


benefits which meet their needs, and
forgo others which are less useful
What is the Objective of having
Flex Benefit ?

 Attract and retain key personnel


 Meet the changing needs of a changing work force
 Enhance employees’ awareness and appreciation
of benefit package (encouraging a total
compensation perspective)
 Move from paternalism in benefits to a partnership
with employees
Employee Demography

Older Employee Young


22.00%
& Single
34.00%

44.00%

Married
Employee Scenario

Young & Single

Entertainment

Education
Vacation
Employee Scenario

Married with Family

Extra Insurance

Medical
Vacation
Employee Scenario

Older Employees

More Vacation

More Medical
Flexiben gives you …..
The freedom to choose the benefits that best
suite you and your family needs

The power to make decisions on your


personal benefit

The flexibility to spend your benefit money


Flex Components
Core
Benefits
Price
Tags
Reimburse
Previous
Benefits Forfeit
Options
Flex
Points
FSA
What is Core Benefit ?
Core Benefits are minimum benefits set by
the company to prevent staff from :

– having no protection or medical benefits


– making the wrong choice

– forgetting to make selections


What is FSA

The Flexible Spending


Account (FSA) contains all the
Flexi- Points which have not been
used for Options
What is Flexi-Point
Flexi- Points are used to :
 Buy Optional Benefits

 Claim Reimbursements from the FSA


What is Option ?
Each Optional Benefit has a price
tag expressed in Flexi- Points
Example - Group Term Life
Previous Benefit Option

Core

12 x MS
36 x MS Rp.50,000
12 x = 50,000 pts
Rp.150,000 24 x = 100,000 pts
Flexi-
Points
100,000
Core and Options
Core

GTL - 12 x MS
H&S - Rp.200,000
Outpatient - GP
Price Tags

Options
Flexi- Points
GTL - 24x; 36x
500,000 points H&S - Rp.280,000;
Rp.350,000
Benefits to Staff
Customization of Package
Choice & flexibility
More benefits
Reimbursement from the FSA
Enhanced understanding of benefits
Benefits to Company
State of the art benefits package
Represents a world class company
Enhanced awareness & appreciation of
benefits package
Motivation and satisfaction of staff
Starting a
Flexible Program
Implementation Process
Feasibility
Pre-Implementation
Implementation

Monitor/Review
Launch
Administration

Comm & Delivery


Feasibility

“The goal of the feasibility study


is to determine whether the
employers objectives will be
met”
Pre-Implementation

• Management feedback
• Refinements
• Focus groups
• Feedback
• Refinements
Implementation

• Rules and policies


• Provider liaison
• Provider negotiation
• Contracts and documents
Comm & Delivery

• Develop strategy
• Set budget
• Timetable
• Design of materials
• Draft copy
• Launch presentation
• Leader training
Administration

• Set-Up systems
• Initial data
• Allocation
• Enrolment and selection
• Ongoing administration
Monitor & Review

• Annual data collection


• Reconciliation of Flexi-points
• Calculation of cost
• Staff satisfaction
• Strategic decisions
• Implementation & communication
Design and
Calculation of
Core &
Optional
Benefits
Components of Flex

Core

Reimburse
Options
Encash
Flexi-
Points Carry Forward
FSA
Forfeit
Components of Flex
Each employee is allocated a certain

number of points, called Flexi-Points


in order to purchase benefits

1 Flexi-Point = Rp 1
Components of Flex
Different Types of Flexi-Points

• Salary Related
• Dependent Related
• Service Related

• Seniority Related
How to Calculate….

Number Annual % Annual


Of Max. Usage Actual
Employee Reimburse Cost
ment
Director 10 7,000 80% 5,600

Manager 60 5,000 80% 4,000

Officer 120 3,000 70% 2,100

Clerical 150 1,500 65% 975


How to Calculate….
Director Manager Officer Clerical

Annual Limit 7,000 5,000 3,000 1,500


Actual Cost 5,600 4,000 2,100 975
Core 3,000 2,000 1,000 500
Saving 2,600 2,000 1,100 475

Director Manager Officer Clerical


Option Price Option Price Option Price Option Price

5,000 1,858 3,000 1,500 2,000 733 1,000 316


7,000 2,600 4,000 2,000 3,000 1,100 1,500 475
Sample
A : Officer, single & salary Rp. 4,000,000
* Assumption : A only takes core benefits
Current Core Flexi-
Benefit Benefit Points

Life & Dis. 36 x MS 12 x MS


Insurance

Cost (36 x Rp.4 Mio)x2.3 (12 x Rp.4 Mio)x2.3


Calculation 1,000 1,000

Cost p.a. Rp.331,200 Rp.110,400 220,800 pts


Sample
A : Officer, single & salary Rp. 4,000,000
* Assumption : A only takes core benefits
Current
Core Flexi-
Benefit
Benefit Points
Room & Board

Hospitali- Rp.200,000 Rp.100,000


zation

Cost
Based on Premium charged by the insurance provider
Calculation

Cost p.a. Rp.385,000 Rp.195,000 190,000 pts


Sample
A : Officer, single & salary Rp. 4,000,000
* Assumption : A only takes core benefits
Current Core Flexi-
Benefit Benefit Points

Outpatient Rp.3,000,000 Rp.1,000,000 500,000 pts

Cost
Based on annual average cost usage
Calculation
Sample
A : Officer, single & salary Rp. 4,000,000
* Assumption : A only takes core benefits
Flexi-
Points

Life & Dis. 220,800 pts


Total Pts :
Insurance 910,800 pts

Hospitali-
zation 190,000 pts

FSA
Outpatient 500,000 pts
How does it work ?
When can I buy options?
 At the beginning of each year, staff choose the
options for that year

 Each year different options can be chosen,


allowing staff to customise their benefits as
their needs change
Components of Flex
Forfeit Reimbursement
(Optional)

FSA
Carry
Forward Encashment
(Optional) (Optional)
How does reimbursement
work?
 Company specifies list of items which are allowed
for reimbursement eg. Parent’s medical or Eye
glasses expense
 Staff may spend their own money on those benefit items

 Staff may claim the cost of these items as a


reimbursement, provided the staff has sufficient
balance in the FSA

 Quarterly basis
How does reimbursement
work?
• A claims Rp.500,000 from FSA

FSA • A must show proof of payment for


parent’s medical expenses
Functions
like a bank • Company pays Rp.500,000 to
account employee and deducts 500,000
points from the FSA

• A’s FSA balance remaining =


1,660,800 points 1,160,800 points
Example on Types of
Reimbursement Items
• Education fees (related to business or • Annual Club subscription
personal development) • Professional membership
• Premiums on personal life • Annual Gym membership
or medical insurance • Annual Credit card subscription
• Optical expenses • Professional Magazine
• Child daycare expenses subscription
• Children’s education
• Parents’ medical costs (own or in law
with substantial documents)
Source of Flexi-Points

Downgrading current benefits to


core
When you have new dependents
Promotion into the eligible category
Thank You

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