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Want to keep health-care costs low and employees happy in today's economy? It's still a good idea to look into cafeteria-style flexible plans.

This story appears in the May 2003 issue of Entrepreneur. Subscribe »

When unemployment rates hit rock bottom a few years ago, perks such as flexible benefits plans that let employees customize their own benefits were all the rage. Now that unemployment rates favor employers, you might not feel the need to consider such benefits. But experts say the arguments in favor of flexible benefits are still sound.

Cafeteria plans that let employees spend a preset amount to buy selections from an array of insurance and other benefits have been around for more than 20 years, according to Dallas Salisbury, CEO of the Employee Benefits Research Institute, a Washington, DC, think tank. During the 1980s, they increased in popularity until about 12 percent of the labor force was covered, and that's pretty much where they've stayed ever since.

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