For many employers, the cost of private medical insurance is spiralling out of control. Typically, PMI has increased in cost between 5% and 15% every year for the last 10 years. During this time, the average annual cost of a policy has risen from £500 to £1,870, partially due to expensive drug treatments and lack of competition between insurers. The problem doesn’t look set to be resolved any time soon.
As the workforce ages, the number of claims will increase. Over 50s currently make up 27% of the workforce, with this number predicted to rise to a third by 2020. The increasing cost of cancer treatment for example, is forcing employers to question the affordability of PMI arrangements. For example, it’s not uncommon to see claims over £20,000, and some treatment costs up to £100,000. Of course employers can cap the amount employees can claim, however, this is a short-sighted strategy. The way an employer looks after poorly employees is a critical part of its employer brand. Cut short an employee’s treatment, and the implication is that expense comes before your employees’ health. Hardly a message that will rally engagement with your benefits scheme, or win the hearts and minds of your workforce. In an age when employees can and will share their healthcare experience across social media, employers need to ensure this reflects positively on their brand. If not, they risk alienating current and prospective employees.
There are other considerations which will impact how HR manage healthcare, such as return to work schemes, level of support offered - mentally and physically, resourcing, and duty of care. It’s therefore crucial for employers to approach the health and wellbeing of their workforce as a whole.
Taking a holistic approach to wellness
Employers need to develop holistic strategies which deal with wellness as a whole, planning support strategies that deal with the effects of long term illness, not just the immediate treatment costs. For example, sufferers can find the return to work incredibly difficult. It’s crucial to have strategies in place to manage this as carefully as possible - allowing flexible working for example, or reduced hours. It’s also possible to use PMI to help with aspects of an employee’s life outside of the office. Benefits such as childcare or cleaning can take an extra worry off employees’ minds and can have a big impact on employees’ work-life balance.
Certain insurers are getting this right, providing options for supporting the employee through the challenges of treatment and post treatment. One such service includes a dedicated nurse for up to a year after the treatment has finished.
Creative ways to demonstrate your duty of care
It’s not just about managing the fatigue, but also about providing emotional support as people gradually return to work. Another way to support employees is to understand the psychological challenges which accompany long-term illness. One of the biggest criticisms levied at employers is that the dialogue around illnesses such as cancer is difficult at best, and at worst, stifled. Most employers also don’t take into account that employees have gone through trauma, and may therefore need support. Managers and HR teams need to be equipped to deal with these situations. This could include offering managers listening and dialogue training.
Finally, employers need to look at health and wellness approaches to improve the underlying health of their workforces. In the UK, 42 percent of cancers are preventable. Employers should therefore be taking steps to proactively help their people manage their health and wellbeing, so that cancer claims in the future are minimised. This could involve running anti-smoking seminars, educating employees about nutrition or running health screening programmes. Employers will also benefit from putting measurable objectives in place to quantify the impact of wellness strategies on claims. It’s time to adopt a new approach, the PMI clock is ticking.
For more top tips on your health and wellbeing strategy, watch our most recent webinar ‘Is your PMI Scheme a ticking time bomb?' in our Benefits Experts Webinar Series.
Written by Luke Prankard, Senior Health and Wellbeing Consultant at Thomsons Online Benefits.