Health in­sur­ance pit­falls com­pa­nies need to avoid

Health ben­e­fits can play a crit­i­cal role in re­tain­ing ex­ist­ing staff and at­tract­ing new tal­ent to your or­gan­i­sa­tion, but there are some com­mon mis­takes lead­ers need to en­sure their or­gan­i­sa­tion avoids.

NZ Business - - INBOX -

Fi­nan­cial ad­viser Car­men Lapthorne of Life­time says health in­sur­ance is still seen as one of the most at­trac­tive staff ben­e­fits a com­pany can of­fer.

In New Zealand, eight out of 10 em­ploy­ees rated med­i­cal in­sur­ance as an im­por­tant ben­e­fit a com­pany needs to pro­vide, ac­cord­ing to the Well­ness in the Work­place Sur­vey 2017 un­der­taken by South­ern Cross.

She says that while health in­sur­ance can seem like a big ex­pense for com­pa­nies to of­fer, an ab­sent em­ployee typ­i­cally costs their em­ployer $600 to $1,000 a year due to sick­ness.

“Health in­sur­ance goes a long way to re­duce ab­sen­teeism show­ing that pro­vid­ing health ben­e­fits for your em­ploy­ees doesn’t just look af­ter your staff’s well-be­ing, it helps your com­pany’s bot­tom line too.

“En­cour­ag­ingly, more Kiwi em­ploy­ers are un­der­stand­ing the ben­e­fits of keep­ing em­ploy­ees healthy and looked af­ter, which in­cludes real in­vest­ment in their team’s well­be­ing. More com­pa­nies are sign­ing up for group health cover, in­tro­duc­ing well­ness pro­grammes and pay­ing for flu vac­ci­na­tions as part of their com­pre­hen­sive ap­proach to help staff stay healthy, en­gaged and pro­duc­tive.”

De­spite this, there are still four com­mon mis­takes she sees em­ploy­ers make reg­u­larly. 1. Think­ing no cover is bet­ter than en­try-tier cover: Lapthorne, who spe­cialises in the health in­sur­ance sec­tor par­tic­u­larly em­ployer group schemes, says com­pa­nies that want the best for their staff may be put off of­fer­ing the base tier of med­i­cal cover and wait un­til they’re in a bet­ter fi­nan­cial po­si­tion to of­fer a more com­pre­hen­sive cover rather than sign­ing up for ba­sic group health in­sur­ance. “This, in my opin­ion, is ter­ri­bly short-sighted. Health in­sur­ance is such a pow­er­ful in­cen­tive – of­fer­ing such value to ex­ist­ing staff and serv­ing as a deal­maker when at­tract­ing top can­di­dates – that it would leave you at a dis­ad­van­tage to over­look it. Ev­ery lit­tle bit helps, and it’s com­pletely ac­cept­able to pro­vide an en­try-level of cover to your team. Be­cause health­care is such a com­pet­i­tive in­dus­try with great prod­ucts all vy­ing for busi­ness, em­ploy­ers could be sur­prised at how good a deal you can get once you start look­ing and com­par­ing op­tions.” 2. Not com­mu­ni­cat­ing the full value of ben­e­fits: She says it’s not enough to of­fer health in­sur­ance, busi­ness lead­ers need to make sure they’re high­light­ing all the pol­icy ben­e­fits to staff. “We’ve of­ten found that busi­nesses gen­er­ally don’t make a big enough deal about the health cover they of­fer, to such a point that it makes you won­der if staff re­alise it’s even avail­able to them, let alone the range of ben­e­fits the group pol­icy may of­fer. Em­ploy­ers need to make sure staff are aware and un­der­stand the full range of ben­e­fits avail­able to them and com­mu­ni­cate the valu­able con­tri­bu­tion th­ese poli­cies pro­vide. 3. For­get­ting their fam­ily: Lapthorne says when you weigh up the cost-to-ben­e­fit ra­tio, it be­comes a no-brainer to in­clude an em­ployee’s fam­ily.

“Costs to in­clude chil­dren on a health plan are min­i­mal, and it’s of­ten cheaper in terms of rate to in­sure a fam­ily than it would be to in­sure an in­di­vid­ual. In ad­di­tion, be­cause no med­i­cal un­der­writ­ing takes places, this of­fers im­pres­sive value to staff. Health­care of­ten mat­ters more to em­ploy­ees with fam­i­lies.”

She says if you’re work­ing within a tight bud­get, you may want to cover the cost of adding any chil­dren and in­tro­duce co­pay­ments should a staff mem­ber want to add their part­ner. 4. Not al­low­ing staff to tailor cover to their needs: “To max­imise the full ben­e­fit of re­ward­ing your staff with health in­sur­ance, it’s im­por­tant to give them the free­dom to add on ex­tra cover if they need to. This can be done in a num­ber of ways: you could give staff the op­tion of sev­eral plans adding up to the same value or could al­low them to con­sult with the fi­nan­cial ad­viser to tailor the ex­ist­ing plan to bet­ter suit their needs.

“For ex­am­ple, a fe­male staff mem­ber may want to in­crease breast can­cer cov­er­age by adding spe­cial­ist tests to her plan as an out-of-pocket ex­pense. Al­low­ing staff to cus­tomise their health plan to meet their needs will make it a more pow­er­ful re­ten­tion tool,” she says.

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