Low-cost corporate plans targeting new employee populations could revive the group PMI market says Jenny D’Souza, medical product manager at Cigna UK HealthCare Benefits
A recent study conducted by Cigna UK HealthCare Benefits and EMedia found that the majority of employers only extend private medical benefits to senior members of staff. And of the 341 HR professionals surveyed, only 70 could say they offered such benefits to their entire workforce.
But it was encouraging to see that many of those not offering private medical benefits to all staff were willing to extend this benefit further.
Almost a third said they would extend cover – if the price was right. On average, employers were willing to spend £360 per member of staff.
Certainly less than the cost of your average comprehensive plan, but if spent wisely, it could buy a valuable benefit for any business.
In the past, low-cost corporate medical plans have been introduced to the market with no great success.
But if positioned correctly, more focused plans may be just what is needed to revive the market.
The market for fully comprehensive cover is near to saturation point. Those who have the budget have the cover. But what about those who need the cover, but don’t have the budget?
Medical cover is more than just a perk to hand out to employees. It’s a valuable business tool.
The right plan can reduce the impact of ill health upon your client’s business, or serve as a valuable part of an attractive reward package.
In today’s financial climate, few companies can idly watch the costs of sickness absence mounting on their balance sheet.
The company doesn’t just lose the productivity of the absent colleague. The rest of the team can also become demoralised and less productive as a result of the increased workload.
Mental health has now overtaken musculoskeletal conditions as the leading cause of absence and lost productivity.
Between them, these two conditions account for the vast majority of absences. A focussed and affordable corporate medical plan can ensure that employees have fast and reliable access to the treatment they need to return to health, and to avoid conditions becoming chronic.
In tough economic times, employers can’t afford a high turnover in staff either.
Talented employees are one of the most valuable assets to any company. And the costs of losing them are extensive.
Consider the agency costs and the time and effort spent on interviewing candidates, not to mention the lost productivity while the role is vacant and the new member of staff comes up to speed. It is not an expense any company can take lightly.
A competitive reward package is invaluable in retaining the best people for any business. Times are tough, and average earnings are rising significantly slower than inflation as a result.
So it’s never been more important for your clients to ensure the full reward package is up to scratch to compete in the employment market.
There is a clear need for medical plans to be extended further into the market.
The challenge remains how to make this benefit accessible to those populations who need it the most.
By offering focussed plans, positioned well to the right clients, the industry can achieve the market
penetration that has been so needed in the last few years. The opportunity is there and the benefits can be reaped by all.
When offering focussed benefits as opposed to comprehensive medical cover, it’s vital that they are communicated well to employees.
Clear, up-front explanation of what a plan does and doesn’t cover makes all the difference to how it is received by employees.
It’s time to shake up the way we sell corporate medical plans. In today’s market, it’s not enough to be thinking only of switching large schemes.
There’s a vast opportunity to expand the market into virgin territory just waiting to be reaped. For those employers with a need for medical cover but not the means for comprehensive cover, focused plans are an ideal reward and work health solution. It’s up to all of us in the industry to make the change.