An integrated approach to managing staff wellness, productivity and absence is at the core of the group risk industry. Edmund Tirbutt reports
Greater integration between group income protection and group private medical insurance (PMI) should be an aim for the industry, despite the obvious differences in pricing, distribution and terms, but the fundamental differences of the two should not be forgotten.
That was the message from advisers at the Group Risk Adviser Forum held in London last month by Corporate Adviser. Advisers were also virtually unanimous in their view that group risk advisers were better placed than those in the PMI sector to address employee attendance and productivity issues.
Delegates pointed out that the products are priced in different ways and, because PMI is often restricted to senior personnel, it frequently fails to cover as great a proportion of the workforce as group risk solutions.
i2 Healthcare director Simon Derby compared this situation to being “like having male and female toilets.” He said “You wouldn’t dream of making everyone go to one toilet in this day and age or covering them under one umbrella and blurring the edges. You have the two separate departments, so people who are insured have one set of rules and those who aren’t have another.”
Delegates agreed that insurers offering both products tend to have different cultures in the different operations, even if they offer discounts for employers that make a combined purchase.
Rebekah Haymes, risk and flexible benefits director at BDO said: “Aviva and Bupa have tried to provide integrated healthcare but, unless anyone else has found otherwise, I haven’t seen any evidence of it working. They are just not joining up.”
But most attendees were in no doubt that group income protection operations were better placed than PMI functions to manage employee attendance and productivity.
Return on Investment
Jamie Winter, head of healthcare and risk consulting at Towers Watson, who felt that PMI seemed like “a very small part of the picture”, wasn’t sure that he’d seen any objective evidence of the impact of PMI on wellbeing or early return to work to the extent that is clearly visible in relation to income protection. He added that he was not convinced that the industry was operating in an integrated fashion at this stage.
Winter said: “You talk about integrated health and that should be providing one phone number. Well non-one can do that. For me its about getting best of breed across all of these potential solutions and putting them together into a hole. Some people might be excellent at PMI and dreadful at IP claims management, so why shouldn’t I put in somebody who is excellent at IP claims management.”
Bluefin consultant Lee Gruskin also pointed out that, when it came to talking about return on investment and cost-cutting, group risk was in a better position as a result of being more closely aligned with pension benefits.
Gruskin said: “I was sitting next to some PMI personnel at a recent forum and they were effectively laying the blame at the advisers’ feet for not putting their products out there. But they didn’t understand that’s not where the focus is.”
Guy Roberts, business development director at Portus Consulting, differed somewhat from the consensus. He said “Both products have parts to play but if I had to choose one it would be PMI because it deals with lots of short-term absence, whereas income protection tends to deal with longer-term conditions. But it’s not really just these two sectors that are involved because you can bring in other areas such as occupational health and health and wellbeing solutions, including health screening.”
Consultancy was generally considered key to achieving the most effective approach to integration, but slipping in a comprehensive wellness package was clearly no easy task at present, despite the government’s attempt to highlight wellness in the workplace issues and its clear – but still unstated – desire to shift the responsibility for employee health onto employers.
i2 Healthcare’s Simon Derby said: “The key is the employer’s willingness to buy wellness, and how long will it be before the economy recovers sufficiently for the brakes to be taken off and finance directors are allowed to spend? At this point in time they are not thinking that way.”
Derby also suggested that employers could derive more value from those products and services they already have by listening to their advisers more.
“When an employee is off work for, say, four to 10 days advisers normally tell the employer to give them a call to talk about the particular situation so that they can start working out what route to go down” he continued. “So, if someone has gone off with stress or with some other subjective or objective symptoms then there are things we can do. But employers don’t have the conversation.”
Derby also argued that a key issue restraining growth of health and wellbeing in the workplace is the fundamental issue of cost in an environment of economic depression.
“And when employers will engage and say that health and wellbeing is good, but when it comes down to the paying for it, that is the big problem. The question we should be asking ourselves is how long will it be before UK plc is recovered to the point where the brakes are being taken off and the FDs of this world are going to sanction spending. Spending for most health and wellbeing programmes is minimal. We are not talking about hundreds of pounds per employee, we are talking tens of pounds. At this point of time employers are not thinking in that way.”
Enrich Reward risk adviser David Barker felt that the solution could be to make health and wellbeing a thing that it is compulsory for employers to at least report on in their company accounts. He said “We spend so much money on reacting. Both group risk and PMI are by essence reactive products as you are paying for a benefit once someone becomes ill. But there is no legislation governing preventative measures, why shouldn’t health screenings become compulsory, shouldn’t employers be required to implement health and wellbeing strategies. These are the missing pieces of the picture.”
But Derby argued: “I’m sorry, but there is too much government intervention. Most employers I talk to hear the word ’government’ and switch off.This is too much of the nanny state. People are thinking employees are lucky enough to have a job, why should we be forced to spend this money on health and wellbeing.”
Jamie Winter said: “I think the signposts are towards a compulsory rehabilitation type environment. If you look at welfare reform, fit note, even the default retirement age, it is the government saying ’we are not picking this up any more, it is up to you the employer to make sure you are doing the right things to help your employers not to become ill in the first place, and if they do get ill, to get them back to work as quickly as possible, and if you don’t do it, then lord help you.
“The government is not saying this in black and white at this stage, but the direction of travel is saying it is an employer’s responsibility to deal with rehabilitation. We are not going to do it on the welfare state any more,” says Winter.
Developing the idea of government taking themselves out of the loop when it comes to rehab, Barker also felt that employers could find themselves having their concentration severely sharpened by the unintended consequences of the introduction this Spring of the new ’fit note’ – which aims to outline what an employee actually can do and therefore, in theory, help more people stay in work.
He said: “If there’s any element of doubt then GPs are probably going to err for the second option, which is ’fit for some work’, the impact on the employer is that when they get a note back from the GP saying they are fit for some work it still technically means the employee is signed off work. So employers are going to have more people that are signed off.
“GPs aren’t qualified to give accurate occupational health advice to employers, so the employer is then going to have the responsibility for making changes to the work role and to reduce hours. If they do nothing then ultimately they are going to have an even bigger sickness absence problem.”
Ford said: “A lot of quality companies and their HR departments are saying they already have a strategy for this, and some have a very good system in place already. The danger from the product point of view is that it is still too far from the product. Using the fit note as a way to focus employers minds, it’s a great idea and I would love to see it happening, but I don’t think the industry is up to speed to do it at the moment.”