Need to know:
- Claims apps make it easier to use a health cash plan, pushing up claims volumes but delivering greater benefit to employees and employers.
- Virtual GP services are the latest benefit addition, responding to long waiting times to see a local doctor.
- Some cash plan providers have absorbed increases in insurance premium tax but many expect to see premiums increase in the next 12 months.
Health cash plans have provided cover for everyday health costs since the days of Queen Victoria. But, while the principle remains the same, plenty has changed to ensure they remain just as relevant today.
Technology is playing a significant part in their evolution, enabling enhancements to benefits and customer service. On the benefits front, online health information and virtual GP services are becoming standard elements.
Colin Perry, head of corporate marketing at Simplyhealth, says: “Our members can access a GP by phone or webcam at any time of [the] day or night. This can be very reassuring, especially when [they] might have to wait a couple of weeks to see a GP, and it also benefits employers by reducing absence.”
Online claims
Many health cash plan providers have also launched apps, providing employees with health information and details of benefit allowances. Some of the apps also enable employees to submit claims. For example, Medicash received 55,000 claims through its app in 2016.
Paul Gambon, sales director at Medicash, says: “It makes claiming so much easier. [Employees] can submit a claim while they’re still in the opticians or dentist and the money will be back in their account in a few days.”
Making it this easy has some potential downsides, with providers seeing their reserves nibbled away due to an increase in the volume of claims. However, the simpler administration process can reduce overheads, says Gambon. “We want to pay more claims,” he says. “It adds value.”
Broader benefits
Alongside the addition of virtual GP services, providers are also expanding cover to address changes in employee needs. For example, Health Shield extended its Home Assistance benefit to employees’ parents, enabling them to access 14 hours of care in the home following a planned hospital stay of two or more nights.
Jonathan Burton, chief executive at Health Shield, says: “More people are having to look after elderly parents. This can affect their productivity in the workplace, [so] we wanted to offer a benefit that offered some support.”
Recent acquisition activity also suggests some cash plan providers are looking to broaden their remit. BHSF bought Nexus Healthcare last September and, at the beginning of 2017, Health Shield acquired occupational health specialist Prevent. Stuart Scullion, chairman of the Association of Medical Insurers and Intermediaries (AMII), says: “By moving into occupational health, providers want to provide more support to employers. There’s a need for differentiation in a competitive market.”
Raising awareness
Providers are also pushing up awareness of the product in the employee benefits market. This includes initiatives such as employee presentations, health and wellbeing days and sponsorship deals, such as Simplyhealth’s partnership with The Great Run Series and Westfield Health’s support of the British Transplant Games.
According to LaingBuisson’s Health cover UK market report, which was published in January 2017, 896,000 people had an employer-paid cash plan at the end of 2015. This represents an increase of nearly 10% on the previous year.
Tax hit
But while the number of people covered may be increasing, so too is something less attractive: insurance premium tax (IPT). Following a series of increases, this has risen from 6% in 2015 to 12% from June 2017.
Cash plan providers have taken different approaches to dealing with this; while some have passed on the increases, others have absorbed them. However, this is putting excess pressure on them, says Scullion. “Absorbing the IPT increases cuts into providers’ running costs,” he says. “Margins are already tight and this will put pressure on pricing.”
There are already signs of this stretch. Chris Cannon, business development manager at Jelf Group, has seen premium increases, especially where employees are claiming above the premium level. “I’ve seen one case where the premium increased by 100%,” he adds. “The employer wasn’t happy with this, especially as it is hard to budget for this level of increase, but the cash plan still offered good value even at the higher price.”
While higher premiums are expected, the broad range of benefits and simple claims processes mean that cash plans should remain an attractive way of engaging employees with their health and wellbeing.
Hywel Dda University Health Board helps staff fund everyday health needs through a health cash plan
Hywel Dda University Health Board is responsible for providing healthcare services to around 384,000 people across Carmarthenshire, Ceredigion and Pembrokeshire. It also cares about the health and wellbeing of its 10,000 employees, having introduced a Health Shield-provided cash plan in 2013 to help staff fund their everyday health needs.
Andrea Thomas, senior terms, conditions and benefits manager at Hywel Dda, says: “We wanted to provide our employees with a benefit that they could use to support their health and wellbeing at work and at home.”
Alongside more traditional cash plan benefits such as optical, dental and physiotherapy, the plan includes a benefit that enables employees to access a range of alternative therapies, including sports massage, reflexology and hypnotherapy. “Employees really appreciate the variety of benefits on offer through the cash plan,” adds Thomas. “And they like the fact their claims are settled quickly, with the money back in their accounts in a matter of days.”
The cash plan is available on a voluntary basis, with Health Shield supporting Hywel Dda’s benefit promotions. This includes running staff presentations and attending health and wellbeing days, bringing therapists in to provide employees with a taster session.
The organisation is pleased with take-up of the benefit. “Last year, 200 new employees signed up for the cash plan,” says Thomas. “It does take time but as more and more people see what they can claim for, we expect word of mouth will help to drive take-up.”