Welfare reform is pointing to a larger role for employers in safeguarding employee health and wellbeing. But, while the group risk and medical insurers are preparing for increased interest in their products, cash plan providers, with their low cost health and wellbeing product propositions also stand to benefit from the shift.
“As the NHS changes and more responsibility passes to employers to look after their employees’ health and wellbeing, cash plans will evolve,” says Lara Rendell, marketing manager at Health Shield. “We’ve always looked to complement the NHS so wherever there are gaps in provision we will explore how we can fill these.”
While some of the innovation on cash plans will be driven by a squeeze on NHS services, finding a way to improve employee health and wellbeing has benefits for employers too. A healthy workforce is more productive and takes less time off. Employees also tend to suffer fewer serious conditions that can result in long-term absence.
Roll-back of the NHS is a demand that Westfield Health is clearly looking to meet with its Hospital Treatment Insurance, which starts at £1.24 per-employee per-week and which focuses on in-patient care, covering more than 1,300 surgical procedures. The provider expects others will follow its move into the middle ground between cash plans and PMI.
And cash plans are in a good position to support an organisation’s wellbeing strategy. Unlike group risk benefits or medical insurance, claims frequency is relatively high. Most employees can claim at least once or twice a year, with many able to use their plans much more regularly. Usage is increased by some of the peripheral benefits. For example, BHSF and Medicash include an employee discounts and savings programme on their corporate schemes, giving access to a range of discounts on everyday items such as supermarket shopping, eating out and gym membership.
Debbie Kleiner-Gaines, managing director of Best Health UK, and a spokesperson for the Association of Medical Insurance Intermediaries, is a fan of these discount and savings programmes. “I like the idea of being able to obtain non-medical discounts though cash plans, for example gym membership. It can encourage employees to use the other benefits,” she explains.
Furthermore, the low cost of cash plans means they can be provided across the workforce rather than to a select few, which can often be the case with medical insurance.
This means that everyone, including lower-paid employees who might not be able to afford to look after their health as thoroughly as they should, can benefit.
Cash plan providers are arguably more highly trusted than the providers of other products too, in part because of their heritage as community-based organisations set up on a mutual basis, which can help them to build a rapport with employees. This can enable them to have a greater influence when it comes to encouraging employees to make lifestyle changes.
As Howard Hughes, head of employer marketing at Simplyhealth, explains: “Cash plans are very trusted by employees. We’re set up to pay claims quickly, which reduces our administration overheads but also means the claims process is hassle-free for employees.”
Encouraging employees to get their health checked out can lead to medical conditions being spotted earlier than they otherwise would have, which may mean an employee is able to get better and back to work quicker. A healthy workforce leads to better results all round
Cash plans are also well-established when it comes to offering health and wellbeing options. Over the last few years, wellbeing benefits have grown in popularity and a broad range of options are already available either as an integral part of a plan or as a low cost extra.
Several cash plans, including those offered by Health Shield and Westfield Health, include an online health risk assessment. These take details such as height, weight, blood pressure and cholesterol readings to give the employee an overview of their health and details on how they can make improvements.
Although a criticism of these assessments is that only those employees who want to improve their health use them, Paul Shires, sales and marketing director at Westfield Health, says they can drive significant change. “We encourage employees to engage with our health risk assessment on a regular basis, flagging up pharmacies where they can have further tests done and giving advice on how they can improve their health and lifestyle. Employers can also purchase a variety of upgrades such as onsite biometric testing, which can help to bring the assessment to life,” he explains.
Another benefit of the health risk assessment is the management information supplied to the employer. This is anonymised, but by giving company-wide scores can highlight areas where improvements could be made. “Many companies either don’t have a health and wellbeing strategy or implement initiatives in a random way. This management information can help them target their strategy to make it more effective,” Shires says.
Taking this a stage further, many corporate cash plans include a health screening benefit. For instance Simplyhealth’s £1 a week plan includes £100 for health screening while you can get £120 of benefit for £1.75 a week on Health Shield’s
Employee assistance programme are another common wellbeing feature. These are available free from Westfield and Healthshield, while other providers, including Medicash and Simplyhealth, prefer to charge a separate fee for it. For instance, on its Proactive plan, Medicash charges an additional 15p per employee per week to include an EAP with up to six face to face counselling sessions.
Simplyhealth also charges 15p per employee per week. Hughes explains the thinking behind the fee. “We think it’s important to charge for it as it can be a very valuable benefit that meets employer’s duty of care requirements. By charging for it, it helps to highlight it too and this ensures that it’s promoted and used.”
Some providers also include a specific health and wellbeing benefit. For instance, on Health Shield’s Essentials corporate scheme, employees have access to an annual health and wellbeing benefit of £70 on the 75p per week plan. This can be used towards a range of treatments including aromatherapy, Indian head massage and Reiki, where it is provided by a practitioner who is a member of an approved professional organisation.
Other wellbeing benefits include GP helplines, Best Doctors’ second opinion service, health and wellbeing information and gym membership discounts.
New benefits
There is also potential for further growth in wellbeing benefits on cash plans. Brian Hall, sales and marketing director at BHSF, says there will be a couple of influences on cash plan development in the next few years. “The growing emphasis on employers’ responsibility for their employees’ health coupled with the growing cost of medical care and the consequential rise in medical insurance costs will be the biggest influences on the development of cash plans going forward,” he says. “These influences will see a variety of new initiatives being introduced on plans.”
According to Hall, these influences are likely to see more diagnostics and testing being added to plans. These will help employees identify health problems quickly, while also bridging the gap in NHS provision.
He also believes that the focus on employers’ responsibility for their employees’ health will create a closer alliance between occupational service provision and cash plans. This will enable employers to access the services necessary to help employees who are suffering health problems as well as drive more health improvement initiatives.
But while these new benefits will add value to cash plans, Hall says this will have other ramifications. “As claims in areas such as diagnostics come through, the downward spiral in employer-funded policy costs will cease and price will start to firm,” he says. To counter this price rise, and to reflect the growth in wellbeing benefits, a stand-alone wellbeing product could be launched. This could incorporate support and helpline services alongside more motivational benefits that engage with employees and encourage them to adopt a healthier lifestyle.
However, the cash plan providers are reluctant to spin these benefits out separately. Shires says that it is possible to build such a product through Westfield’s Mosaic, providing it includes at least two core benefits, which are optical, dental, consultation, therapy treatments, but he doesn’t believe that such a plan would have mass market appeal.
“The core benefits are important in a health and wellbeing strategy. Cash plans exist to pay claims quickly and efficiently and, without this, their value diminishes,” he says.
Claims pressure
But, while providers are unlikely to launch standalone wellbeing plans, adding more of this type of benefits to a cash plan could have an adverse effect on claims. With employees more engaged in their health they are more likely to seek medical treatment and, as this can be obtained on a cash plan without the need for a GP’s referral, it could mean that claims spiral.
The providers insist the potential for increased claims isn’t an issue. “We want people to use our plans and we actively promote them to ensure this happens,” says Rendell. “If someone looks after their health, it can prevent a much bigger claim further down the line.”
Dental treatment is a good example of this. Regular check-ups can spot the early signs of problems, including mouth cancer, allowing the employee to take preventative action.
Kleiner-Gaines doesn’t believe increased claims frequency is a negative either. “A healthy workforce leads to better results all round,” she says. “Encouraging employees to get their health checked out can lead to medical conditions being spotted earlier than they otherwise would have, which may mean an employee is able to get better and back to work quicker. A healthy workforce leads to better results all round.”