What is driving growth in the cash plan market?
Employee health and wellbeing has moved up the corporate agenda since the Covid pandemic. We now see companies across all sectors looking to offer cash plans as a cost effective way of providing valuable health benefits. The vast proportion of our new sales are from companies that have not offered cash plan benefits in the past. This includes small businesses and micro SMEs, as well as larger corporations, particularly those operating in sectors which typically offered very little in terms of employee benefits.
And we are also seeing demand from corporations that offer private medical insurance as a benefit to selected employees, but now want to extend other healthcare benefits to all staff.
What do employers see as being the key attractions of cash plans?
Cash plans are affordable for employers, and deliver a range of tangible benefits that can be used by every single employee. These provide financial support for employees that are ill, and offer services designed to keep staff in good health. Key benefits includes payments towards everyday healthcare costs — such as eye tests, new contact lenses, dental check-ups and treatment and physiotherapy. Members have access to a digital GP and mental health support and counselling through the EAP. These plans are simple to understand, and it’s easy to make a claim. This is important for employers: if they are spending money on benefits, they want products that staff both value and use.
Is the cost-of-living crisis dampening demand for cash plans?
Definitely not — if anything it is leading to more demand. Organisations are thinking about how they can help their employees with the increased cost of living. Some have offered ‘winter warmer’ payments to staff to help with fuel bills; other are looking at pay rises, but this isn’t always affordable or sustainable in the long term, particularly as many smaller business also face steep increases in cost. Cash plans offer a low-cost way of delivering real financial benefits for staff in terms of lower healthcare costs.
How do cash plans complement other healthcare benefits?
There is relatively little overlap between a corporate cash plan and private medical insurance. We think the two products complement each other – it’s not a question of either/or. PMI is there for more serious unexpected treatments and investigations, whereas a cash plan is there to support everyday health expenses. Increasingly, we are seeing companies utilise both for the benefit of staff. Cash plans, for example, can cover the excess people might have to pay on a PMI policy — and this is now a top 10 claim.
How are cash plans evolving to meet customer demand?
Cash plan providers are increasingly offering flexibility in terms of pricing and benefits offered, supporting a drive towards more personalised benefit programmes. There has also been a move towards more flexible benefit models, with employers offering a menu of benefits, giving employers choice.
Increased flexibility is certainly a focus for our proposition development. HR directors will want to know how a cash plan will fit into their wider benefit offering, which might include group risk and PMI products. We will be offering more modular products, so clients aren’t duplicating benefits — be it the virtual GP or EAP — or having gaps in cover. It’s not just about paying for things you don’t need, it’s also about reducing employee confusion.
How is digital innovation improving cash plan products?
Medical technology and the use of AI will improve the benefits available on corporate cash plans. We have already seen apps that can analyse a photograph taken of a skin blemish or mole, and inform users if they need further investigations — and we are working with organisations developing solutions to help manage conditions like arthritis and inflammatory bowel disease. Digital technology is also connecting users with appropriate services. We will soon be rolling out a new system that should cut waiting times for MRIs and other scans. Digital GP services allow users to access primary healthcare quickly. This new service will address similar bottlenecks when it comes to accessing appropriate diagnostic tests and investigations.