Prioritizing employee voice through choice: Implementing flexible benefits in Canadian workplaces

December 2, 2025

Drew Maginn

When faced with the task of selecting a fixed benefits plan that works for all employees, it’s easy to feel defeated before you even start. Employees want benefits flexibility, and many can be critical of employers that are unwilling or unable to change their approach. However, with the clear linkage between employee satisfaction and benefits customization, it’s worthwhile to consider how building more flexibility into your program can have a positive impact on benefits enrollment, engagement and usage.

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Why are organizations exploring benefits flexibility?

Employers relying on traditional benefits plans to satisfy their workforce are often left fighting a losing battle. As much as components of these plans have changed over time, employee opinions have remained the same. According to the Benefits Canada Healthcare Survey 2025, only 56 per cent of employees surveyed felt their plan met their needs extremely or very well, the lowest reported number since 2018. This matches employee ratings from both 2015 and 2005 (both at 56 per cent).

When faced with these stubbornly unchanging statistics, many employers view a flexible benefits plan as a more viable option, because it allows employees to select the level and type of benefit they want from a menu of choices. This creates a win–win for both employees and employers that:

Addresses a diversity of needs: To accommodate Canada’s multigenerational workforce, a flexible benefits plan can support different employee needs by taking a less restrictive approach. Every calendar year, employees can build a plan that works best for their individual needs.
Reduces ghost benefits: Within most traditional benefits plans, there are certain benefits that are not accessed by employees, often referred to as “ghost benefits.” Whether it’s due to changing needs, lack of awareness or a complicated claims process, it’s always frustrating to see a benefit go unused. When flexible benefits based on employee choice are implemented, these situations are less common.

Avoids overcorrecting for the latest trends: Organizations often try to adjust their plans, sometimes annually, to account for trends in employee benefit needs. While well-meaning, this can be challenging on a year-to-year basis. By giving employees the power to decide, you can remove this challenging guesswork which comes with a traditional plan.

” According to the Benefits Canada Healthcare Survey 2025, only 56 per cent of employees surveyed felt their plan met their needs extremely or very well, the lowest reported number since 2018. ”

Pick your preference: Understanding employer options for benefits package customization

While “flexible benefits” is often used as a catch-all term to describe a customizable benefits plan, implementation can vary to suit your specific circumstances and needs. These options are typically categorized in the following ways.

Add-on plan: Within a traditional benefits plan, employees can “add on” coverage in certain areas with flex dollars.

Modular plan: Employees use flex credits to purchase preset plans, or modules, that vary in protection. Employees can opt in to further protection through additional payroll deductions.

Core plan with enhancements: A traditional (core) plan is provided to all employees (e.g., minimal life insurance, limited extended health care) with flex credits to enhance core benefits or allow others to be added.

Cafeteria plan: The cafeteria plan is the most flexible, as employees can use flex credits to choose from a menu of different benefits. Employees may further enhance their benefits through additional payroll deductions.

Health care spending accounts: Both a traditional and flexible benefits plan can be enhanced with a health care spending account (HCSA). Employees use their HCSA to pay for additional medical needs (e.g., uncovered health and dental expenses, deductibles). However, HCSA’s should not be confused with a personal wellness account (PWA) that applies to wellness-related costs (e.g., gym memberships, fitness equipment).

What’s happening now: Employee benefits trends you should know

Even though a flexible benefits plan is more catered to an employee’s needs, it’s a good idea to stay on top of benefit trends, as these trends will inform what options are available and how they are offered. Current examples of this include:

Employee health needs continue to evolve: While mental health support often dominates the headlines, other employee health needs are also becoming more nuanced. These include support for family planning/fertility (e.g., fertility drugs/preservation, in vitro fertilization), women’s health (e.g., menopause care) and neurodiversity (e.g., support for individuals on the autism spectrum).
Virtual care isn’t for everyone: According to Benefits Canada, use of virtual health care has continued to decrease in 2025 (28 per cent accessed virtual support), which is far removed from its peak usage (43 per cent) in 2021, coinciding with the COVID-19 pandemic. While benefits providers may tout their virtual options as a significant value-add for your employees, it may not be as valuable as it was in the past.

Additional non-financial flexibility still matters: Organizations that offer flexible benefits may see even greater results with employee satisfaction and retention when adding flexibility in other areas. When employers integrate other perks like remote work arrangements or flexible start times, employees often value these as much as, or even more than, what’s covered in their benefits plan.

While sometimes more complex to monitor and implement, a flexible benefits plan can become a huge asset for your organization. Whether employees are given partial choice through a modular plan or full choice through a cafeteria plan, there is significant value in giving some level of ownership to your workforce, especially when it comes to an area as personal as their health benefits. It’s often said that a healthy workforce is a productive workforce, and if you can integrate some level of flexibility into your benefits plan, you may be able to support both your employee and business health at the same time.

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