Health insurance is often thought of as one of the main four core employee benefits–but recent data shows it often doesn’t make the cut when employers are building their benefits.
Our Benefits Benchmarking Survey surveyed 1,200 companies and found some interesting data – 43% of companies don’t offer medical benefits. That’s surprising news, considering that according to a study by Canada Life, medical coverage was ranked as one of the top benefits employees wanted most.
So where does this gap come from, and how can employers help bridge while meeting the needs of the business?
Read on to learn more about some of the common reasons employers don’t provide medical benefits – and why you should.
Reason 1: “Healthcare benefits are too expensive.”
The main concern employers have with providing health insurance is cost. Private healthcare insurance costs typically increase over time due to medical inflation, higher demand for services, and advancements in medical technology. That means employers may encounter rising premiums, putting pressure on their budgets. In fact, in the UK, medical insurance premiums for both individual and corporate cover rose by 2% between 2019 and 2022.
But while it can be pricey, there are ways to curb the cost, including investing in preventive care and health screening, so that employees can catch potential health issues early, reducing the need for more expensive treatments down the line.
Employers can implement wellness programmes that encourage healthier lifestyles. This can include initiatives like gym memberships, nutrition counselling, and stress management. Healthier employees are less likely to require costly medical care, meaning reduced overall insurance claims and premiums.
There are other ways to chip away at the cost of employer-provided healthcare, too:
- Reduce coverage: If added extras like dental and eyecare coverage are affecting coverage too much, opt for a lower-coverage plan so that employees still have some access to PMI.
- Review and compare providers: To ensure you’re getting the best coverage for the best price, conduct annual reviews to improve terms or price and tailor to employee needs.
- Increase your excess: Apply a larger excess to shift costs from premiums to the point of claim.
- Add a 6-week wait option: Employees use public healthcare if treatment is available within six weeks.
By exploring these cost-saving measures and adopting a proactive approach to employee health, employers can provide valuable medical benefits without overwhelming their budgets. This balanced approach ensures that employees receive necessary healthcare support while the company maintains financial sustainability.
Reason 2: “Employees don’t use healthcare benefits.”
Many employers believe that private medical insurance is only worthwhile if employees actively use it–and that’s true! It’s crucial to make sure your investment pays off through employee engagement. If employees aren’t in the loop about their benefits, the return on investment can be challenging to justify.
Employees must be informed about the specific advantages of their medical insurance, such as access to specialists, shorter wait times, and coverage for treatments not available through public healthcare systems. Regularly updating employees on how to make the most of their healthcare benefits can significantly improve engagement.
To maximise the value of private health insurance, employers should:
- Educate employees about the benefits: Make sure employees know how their coverage works, what it covers, and how to access services. Education can help demystify the process and encourage employees to use their benefits, as well as remind them that the option is there to be used.
- Encourage preventative care: Highlight the importance of regular health check-ups, screenings, and vaccinations that the insurance covers. Preventative care can catch health issues early, leading to better outcomes and lower overall costs.
- Make information access easy: Make sure that employees can easily find information about their medical insurance through a user-friendly portal or app. An employee benefits platform like Ben makes information accessibility easy for all of your benefits, including private medical insurance.
Want to learn more about how Ben can help build a best-in-class benefits offering that your employees will make the most of?
Reason 3: “Government-funded healthcare covers employees enough.”
Employers in countries with government-funded healthcare like the UK, Canada, and New Zealand often assume additional medical coverage isn’t a necessary employee benefit. While these healthcare systems should cover everyone, in reality, they’re often overwhelmed in the aftermath of budget cuts and the COVID-19 pandemic. Long wait times for non-urgent treatments through government-funded healthcare mean many employees turn to private healthcare to be seen more quickly.
Private medical coverage makes sure employees don’t let their health issues worsen while waiting for public services. Delayed treatment can lead to longer recovery times and increased absenteeism, impacting overall productivity. Plus, public healthcare doesn’t cover everything—think elective surgeries or more specialised treatments like physiotherapy and advanced dental care. That’s where PMI can step in.
Offering health coverage gives employees peace of mind and shows that their employer truly values their wellbeing, making it a more attractive place to work. Even with government-funded healthcare, private health insurance bridges the gaps, providing comprehensive care and demonstrating a strong commitment to employee health and happiness.
The bottom line: why employers should offer healthcare benefits
Offering healthcare benefits not only keeps your employees healthy; it also keeps your business healthy, too. When employees have access to timely healthcare, they can recover more quickly from illnesses, reducing absenteeism and boosting productivity. Plus, providing healthcare benefits demonstrates that your company genuinely values its employees' wellbeing, positioning you as an employer of choice. This commitment to health and wellness can attract top talent, boost employee engagement, and foster a healthier workplace culture.
Ultimately, investing in healthcare benefits isn’t just an investment in both your employees' health, but in your company’s success.
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