How to balance cost and availability of healthcare
Healthcare conundrum: contain cost while expanding support
Last year’s attack on salary sacrifice and hike in IPT is challenging FD’s and HRD’s to find ways to contain the cost of employee healthcare, at a time when employee expectations for employer-led support are rising.
It’s a Hobson’s choice. With government-funded healthcare at crisis point, it is becoming increasingly apparent that if employers want a healthy workforce, then access to private treatment must be provided.
At the same time, employees are increasingly looking to their employer to financially support their health. As the pensionable age creeps up, most employees accept they need to remain fit and healthy to work well beyond retirement age. In turn, they are looking for ways to speed up access to healthcare through private provision, in order to catch health issues in their early, treatable stages before they become a bigger, more expensive problem to tackle.
The irony of the situation is that higher paid employees will continue to be able to afford to choose the benefits they want, while many lower-paid employees will be priced out of this option. As healthcare costs rise, there is an opportunity for employers to make lower-cost healthcare available to these employees who might otherwise have lost out. With this in mind, what can employers do to contain spending on employee healthcare while ensuring access is an option for the many and not merely the few?
Four tips for cost containment
1. Review your current benefits offering
Ask employees what benefits they need most. Use data driven insight to offer those benefits employees want most and to cull those with low take up.
2. Future proof the health of your workforce
An ageing workforce means employers will continue to face increasing costs. Employers need to understand the health needs of this population and provide targeted healthcare, heading off age-related illnesses where possible and catching health issues in the early, treatable stages.
3. Prevent as well as cure
Cancer, heart disease and respiratory diseases are responsible for the highest levels of spending on medical costs. A clear link has been established between lifestyle and the probability of developing these conditions. Spending on employee health should reflect the fact that prevention is less expensive than cure.
4. Find alternative, flexible solutions to supporting employee healthcare
Traditional options for employers to save money have been eroded. This looks set to continue with further increases in IPT likely and upcoming tax changes to Healthcare and Master Trusts. All this means that employers need to find cheaper, IPT efficient alternatives to providing discounted healthcare.
You can read more about this issue in our report, “Uncertainly and opportunity: Five trends in employee health benefits every employer should be aware of.”
I’ll be at EB Live on the 10th and 11th October and would love to meet employers facing this issue. Message me to organise a meeting.
Bruce Bernstein, VP Global Sales, Careington International Corp and its UK arm, Munroe Sutton.