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Employee Benefits Structure Example

    In general, companies have two different ways to structure, contribute, and offer employee benefits: 

    1) Organizational-oriented benefits: Offer employees a specific or defined benefit. Benefits are employer-owned and employer-selected. Examples include a traditional health insurance policy, retirement pension or 401(k), or formal wellness program. 

    2) Consumer-oriented benefits: Offer employees employer-funded dollars to customize their benefits using technology. Benefits are employer-funded and employee-selected. Examples include defined contribution healthcare, defined contribution retirement plan, or allowances for wellness activities. 

    For a closer look at how these two strategies compare, here is a helpful chart. 

    Consumerization of Employee Benefits Examples: 


    Consumer-Oriented Benefits 

    Organization-Oriented Benefits 

    Health Benefits 

    Employee-owned individual health insurance plans with a defined employer contribution. 

    Employer-owned health insurance policy with an employee payroll withholding. 

    Retirement Benefits 

    Employee-owned IRA, or other savings vehicle, with a defined employer contribution. 

    Employer-owned pension plan or 401(k) with employee payroll withholding. 

    Education Benefits 

    Employer-funded allowance for education expenses. 

    Tuition reimbursement program limited by group parameters. 

    Transportation Benefits 

    Employer-funded allowance for public transit passes selected and purchased by the employee. 

    Transportation reimbursement program limited by group parameters. 

    Wellness Benefits 

    Employer-funded allowance for memberships or services selected by the employee. 

    Employer-contracted services or programs chosen to meet the general needs of the organization. 

    Device Benefits 

    Employees choose and use personal devices for work, and receive an employer-funded allowance. 

    Employer selects and provides work devices and manages contracts with providers. 


    Employer-funded allowance for personal use in a marketplace of discounted perks. 

    Employer selects and provides perks and manages contracts with providers. 

    HR Management 

    Employee and the employer use self-service HR software to customize and manage benefits. 

    Employer manages all administrative functions of the benefits offering. 


    True Benefits 

    Traditional Benefits