5 Reasons Why Healthcare Employee Benefit Packages Are Making A Comeback
A large number of firms stopped or reduced their group Private Medical Insurance (PMI) schemes in the height of the UK’s recent recession. Now group PMI and other healthcare packages are making a comeback and we list 5 reasons for their revival in the employee benefits industry.
1. HSBC and Lloyd’s
You might not expect two banks to be the heroes of any story, but in the case of the resurgence of the healthcare market that is exactly the case.
HSBC and Lloyd’s Banking Group have announced plans to offer all of their employees full Private Medical Insurance from January of 2015, a move that will add 100,000 lives to the PMI market.
An HSBC spokesperson said at the time that: “We believe in the well-being of our employees and their families, and we know that this cover will support them in staying healthy." Many people involved in the PMI market are hoping that this kind of attitude will soon spread among other large corporates and that a few of the UK’s other large corporations will add their staff to PMI schemes in 2015.
2. The effects of the recession are almost history
The recovery from the recession is certainly one reason why firms are more able to afford group Private Medical Insurance now and that would appear to be the case with the move by HSBC and Lloyd’s detailed above.
Spending on private health treatments fell by more than 10% back in 2007 at the start of the recent financial crisis in what was the first decrease in private health spending for 20 years. With GDP inching up and up, the recent recession is soon to be a thing of the past and employers can put some of the benefits of this return to growth towards their employee benefits such as group Private Medical Insurance.
The benefits of a private healthcare package for an employer are becoming even greater the more intelligently they’re designed. The vast amount of information available in the 2014 is helping to structure healthcare employee benefits to the specific requirements of each business.
Bupa’s Corporate Director Patrick Watt explained: “If employers can really understand data, it will tell them why their costs are what they are and, more importantly, the health profile of their organisation.” He continued: “Understanding the data can really help in terms of the future and how employers would want to design a healthcare plan.”
The fact that healthcare packages such as group PMI are now less of a shot in the dark due to the power of health data and are now more of a calculated estimate of what a company needs and will benefit is making it easier for HR departments to make the case for investing in private corporate healthcare packages.
4. Companies are realising they can tailor packages to their needs
The private healthcare market is evolving and there are more options available than ever before.
Just as the point above explains how data is allowing firms to realise exactly what they want from their Private Medical Insurance, on the supply side providers are able to offer these more tailored packages.
As we explained on this very same employee benefits blog back in September, the idea of “bolt offs” is really gaining popularity in the healthcare industry and is allowing companies with smaller budgets to provide some level of group private medical insurance to their workforce, which is of course better than nothing.
5. The NHS isn’t quite cutting it
The National Health Service seems to be a permanent feature in the news this year and its problems have been heavily documented. They were even raised again at Prime Minister’s Questions this week when it was asked of David Cameron if the NHS is at breaking point. The long waits at A&E and for GP appointments were brought up, along with the idea of people being turned away from hospitals.
All of this has only increased the debate on whether employers can afford to rely on the NHS or whether they’d be better to turn to private healthcare schemes to get their staff back to work quicker and relieve some of the burden on the NHS.
Photo credit goes to Seattle Minicipal Archives