Why Flexible Didn't Equal Beneficial

October 8, 2014

In 2012 and again this year, membership feedback indicated an interest in flexible benefit plans. At the request of membership, in 2012, the Salary and Benefits Committee investigated the possibility of changing our existing benefit plan to a more flexible plan, whereby members could decide what benefits they would like to have.

The committee researched SFU’s current plan and the various options available within flexible benefit plans. A representative from Pacific Blue Cross (PBC) presented the different types of benefit plans available and provided sample plans for consideration.

After careful consideration, the committee believed it was not in the best interest of the members to pursue this option. This decision was based on the following two negative elements of flexible benefit plans.

  1. Yearly cost increases would likely be passed on to the member

    Right now, the University pays for any additional costs to the benefit plan, which, according to the PBC Representative, has been approximately 10% per year. If APSA were to switch to a flexible benefit plan, the University would likely agree to pay the benefits up to a set amount, and any increases in costs from that point forward would be passed on to the membership.

  2. Erosion of benefits

    If the University were to agree to a flexible benefit plan, any additional options that the members decided on, for example, a Heath Savings Account (HSA), would be included at the expense of another benefit from the existing plan.

    For example, if members wanted a HSA of $500, in order to cover the costs of this, members’ deductible would need to be increased to $250, vision or out of country coverage would be removed and dental coverage would have to be reduced.

Based on these two factors, the committee felt that moving towards a flexible benefits package is not in the best interest of the membership.