Which type of coverage allows employees to select benefits based on their individual needs?

The type of coverage that allows employees to select benefits based on their individual needs is a flexible benefits plan. This approach, often referred to as a "cafeteria plan," enables employees to choose from a range of pre-tax benefits—such as health insurance, dental coverage, life insurance, and other additional perks—that best suit their personal circumstances and financial situations. This customization empowers employees by giving them the flexibility to tailor their benefits package according to their specific preferences and life situations.

In contrast, basic health insurance typically offers a standard package of benefits that does not permit individual customization. Premium health coverage may encompass a broader range of services or coverage at a higher cost but does not inherently provide the same selection flexibility. An exclusionary benefits program focuses on limiting or excluding certain benefits, which can restrict employees' options rather than empower them to choose the coverage they need.