Optical benefits are increasingly seen as a valued wellbeing benefit, thanks in part to pensions auto-enrolment finds Sam Barrett
A link to meeting duty of care requirements has made optical benefits something of a grudge purchase for many employers. But, this is beginning to change, with eye care increasingly seen as a valuable health and wellbeing tool and a way to spice up a benefits package.
Part of this change is down to pensions auto-enrolment according to Master Adviser partner Roy McLoughlin. “Everyone offers a pension now, or will do soon, so employers are looking for ways to distinguish themselves from their competitors. Benefits such as optical and dental work well at achieving this,” he explains.
As well as driving employers to add new products to differentiate their benefit packages, auto-enrolment has also helped boost sales in another way.
National Dental Plan business development director Andrew Morris, says that as more employers introduce flex platforms for their pensions, they’re looking at adding benefits for their employees. “We were concerned that the additional expense of auto-enrolment would put pressure on employers’ budgets and reduce spend but we’re seeing more interest from employers wanting to add our optical and dental plans to their flex platforms,” he adds.
Once in place, an optical benefit, especially one that goes beyond the statutory duty of care requirements, is appreciated by employees. “Employees really like the fact they can have an eye test and get new frames or contact lenses. It’s a low cost, high value benefit,” says Simplyhealth head of employer marketing Howard Hughes.
Health and wellbeing
The status of optical benefits is also being elevated to a means of safeguarding employee health. Problems with eyesight can lead to headaches, lower productivity and sickness absence so ensuring employees’ vision is regularly checked can benefit employers significantly.
ASE Corporate Eyecare director of sales and marketing Lyn Hodges has noted an increased interest in health and wellbeing among employers.
“There’s been a distinct shift in the way employers view eye care,” she says. “It used to be about meeting the legislative requirements but now, especially where employees are using computer screens, we see more employers looking at safeguarding their employees’ health with everything from eye tests to workplace assessments.”
As well as helping to reduce absence, a sight test can also support preventative health measures. A full eye examination will pick up the early signs of some chronic health conditions including diabetes, high blood pressure and high cholesterol levels.
For example, according to VSP Vision Care, an eye test will pick up diabetic retinopathy up to seven years before diagnosis of type 2 diabetes, with retinopathy evident in a fifth of people when they are first diagnosed with type 2 diabetes. In addition, it found that eye care professionals were the first to detect high cholesterol in 62 per cent of cases with first detection also occurring for high blood pressure and diabetes in 39 per cent and 34 per cent of cases respectively.
With these conditions asymptomatic, early detection can help employees make changes to their lifestyle and diet to help prevent the condition progressing. “If an employee suffers a heart attack the potential cost is huge in terms of lost productivity, sick pay, replacement staff and possibly early retirement. If this can be prevented through early detection then it’s a bit of a no brainer,” says VSP Vision Care managing director Jeremy Chadwick.
Meeting employers’ needs
With so many different employer motivations behind providing optical benefits, there are a variety of products on offer. At the most basic level, an employer might pay for employee eye tests through petty cash or expenses. This can be labour intensive, especially for larger organisations, so more formal schemes are common.
These start with voucher schemes such as those offered by ASE Corporate Eyecare, Boots, Optical Express and Vision Express. While some are prepaid, requiring employers to buy vouchers to give to members of staff requiring eye tests, it’s also possible to operate on a pay-as-you-go basis.
For example at ASE a range of plans are available to suit different requirements including VDU users, drivers and protective eye care with prices starting at £25 for its basic product, EyecarePlan Solo, which covers a sight test and single vision glasses where required. “Our plans are designed to minimise the administration from the employer,” says Hodges. “Employees visit our secure portal, which can be imbedded into the company’s intranet, and print off a voucher. There are no set up charges or minimum numbers and the employer is billed when vouchers are requested.”
While voucher schemes are designed to meet duty of care requirements, it’s also possible to get additional cover for employees. For example, NDP’s recently revamped optical plan can be used on a standalone basis or as a top up to a voucher scheme. This pays £30 towards an annual eye test and £10,000 for loss of sight plus £50 for frames and £100 for lenses if the employee’s prescription changes. NDP’s Morris says this benefit boost was in response to demand from brokers. “We’ve had a lot of interest in the new plan. Employers can add it to flex schemes and make it available to spouses and partners as well as employees and we’ve also seen interest from some of the US start-ups looking to replicate the benefit package they offer at home,” he explains.
Employers wishing to go beyond optical can look at healthcare cash plans. These provide a range of benefits with optical and dental the key drivers for claims. Although they offer broader cover than the voucher schemes, premiums are still relatively low. For example on Health Shield’s company paid Essentials plan, a premium of 85p a week (£44.20 a year) will get benefits including £50 of optical, £50 of dental, £150 for physiotherapy and other therapies and £200 for specialist consultations.
While this can cover an employer’s duty of care requirements, Pete McAndrew, sales director at Health Shield, says that sometimes organisations will remove the optical benefit. “If an employer offers eye care vouchers they might bespoke their cash plan so there’s no duplication,” he explains. “Bespoking isn’t always an option but we’ll consider it on schemes with at least 75 employees or a company paid premium of £5,000.”
New kid on the block
While vouchers and cash plans have been available for some time, employers’ choice over how they provide optical benefit was increased with the launch of VSP Vision Care earlier this year.
The provider, which has already established itself in the US, Australia and Canada, offers a range of eye care benefits designed to support health and wellbeing as well as enabling employers to meet their duty of care requirements. Chadwick explains: “Our product is designed to encourage all employees to take a thorough eye examination every two years as this can detect serious health conditions at an early stage and enable steps to be taken to prevent it developing. We also provide anonymised utilisation reports to the employer showing the percentage of employees who have taken an eye test and the outcomes and how this compares to similar employers. This can inform health and wellbeing campaigns.”
Premiums start at £2.50 per employee a month, which provides £125 of benefit over 24 months. Increasing the premium to £9.50 a month (£10.45 if employee paid) gives £500 of benefit within VSP’s network of 450 opticians or £400 if using an optician outside the network.
As well as winning business from both domestic and multinational companies, the health and wellbeing focus has also attracted interest from other insurers. Chadwick believes it would fit well as an added-value benefit. “It’s got high utilisation which is great when a product only pays on death, serious illness or disability,” he says. “In addition, its ability to detect emerging chronic conditions, and help prevent them, also means it’s a natural fit.”
Access to NHS dental services has improved over the last few years but affordability remains a key concern for employees. Research by Cigna UK Healthcare Benefits found that, for 40 per cent of people who no longer visited a dentist, the main reason was cost.
Perhaps because of this, sales of corporate dental plans are doing well. Figures from Laing & Buisson show that the number of employees benefitting from company paid cover increased by 4.9 per cent in 2012.
Insurers are also responding to this demand. National Dental Plan extended its range with the launch of Radiant, a percentage reimbursement plan giving a full refund for preventative and minor treatments and 80 per cent for major treatments. Axa PPP Healthcare also stepped into the market with the launch of Dental Care, which includes a dental helpline as well as six levels of cover.
Cigna has also addressed affordability through the launch of Healthy Discounts, giving members 20 per cent off treatments whether covered by their plan or not, and adding a new NHS only level to its OralHealth range. “We’re always looking at how the dental market is evolving,” says Cigna UK Healthcare Benefits product manager Michelle Rae. “And, with more NHS dentists around, it made sense to add this level of cover. We also know that more people are having cosmetic treatment such as whitening so, although we don’t cover this, we wanted to make it more affordable.”