02/07/2014

By Mike Blake, PMI Health Group

Employee benefits have long been recognised as an effective tool for attracting and retaining employees, yet take up among small businesses has traditionally remained low.

Cost is undeniably seen as the major barrier to the implementation of benefits across all staff but this has caused a gap in provision where lower wage earners are missing out.

A recent study conducted on behalf of PMI Health Group found only 26 per cent of employees earning less than the national average wage were satisfied with their benefits package compared to 50 per cent of those earning higher than the average.

At the same time, 40 per cent of all UK employees say benefits have increased in importance in the wake of recent cuts to key NHS services.

Employers can meet this increasing demand by ignoring the traditional myths around employee benefits and instead focusing on the variety of cost-effective alternatives to private medical insurance (PMI).

If introduced strategically, benefits can not only improve staff morale but also deliver return on investment by helping to reduce absence and boost productivity.

Hybrid health schemes
Health cover is one of the most valued employee benefits, yet budgetary constraints generally make it financially prohibitive for a business to offer PMI to all its employees. Bearing this in mind, some insurers have taken an innovative approach to health cover in recent years.

Flexible hybrid schemes, offer viable, inclusive alternatives and are often tailored to tackle the key causes of absence, such as musculoskeletal and mental health problems or to offer access to specialists and medical tests so conditions can be diagnosed early.

These policies often will pay for common treatments classed by the NHS as non-urgent that would previously have been cost prohibitive for many employers. As a result, employees are given access to support and can return to work more quickly.

Cash plans
Cash plans are low cost policies, costing from as little as 60p per employee per week, used to provide an easy way to pay for essential healthcare.

Cash plans will pay individuals cash benefits for time spent in hospital, either as an inpatient, for consultations or for pre-defined treatments such as dental, optical, private consultations, physiotherapy, chiropractic and osteopathy.

Higher-end cash plan benefits can also play a key role in absence management, providing cover for high-tech scans and Cognitive Behavioural Therapy, access to wellbeing websites, online health risk assessments and discounts for gym memberships.

They are treated as a benefit in kind for tax purposes, the employee need only pay tax on the premium rather than the actual cost of treatment received and, in some cases, may even be eligible for a P11D exemption.

Dental plans
Dental charges are one of the most frequently made claims on cash plans but can also be covered in isolation under dental plans.

Group dental plans cover employees for both preventative and restorative dental treatments. They can also cover the cost of more serious and costly accidents and injuries.

Such plans have become all the more compelling in recent years, particularly with the number of NHS dentists on the wane, days lost to dental problems increasing and treatment costs being funded by the patient.

At an average of cost of around £10 per employee, per month, they are well-placed to deliver ROI, especially as better dental health is increasingly being linked to general health and wellbeing.

Employee Assistance Programmes
Employee Assistance Programmes (EAPs) provide confidential advice, support and counselling to staff with personal or work-related issues.

They are a useful tool for helping staff to cope with any problems originating at work or at home that might affect their performance or result in stress-related absence.

Costs vary but at around just £15 per employee per year, they offer one of the most affordable benefits on the market and provide access to services such as a 24/7 telephone helpline offering counselling and support.

Furthermore, they help businesses to demonstrate a commitment to taking preventative and protective measures to reduce health risks in the workplace, in line with the Health & Safety at Work Act of 1974.

Group Life
Unlike PMI, Group Life is typically made available to a greater number of employees. In the event of an employee death, the benefit pays a tax free lump sum to the employee’s family.

As these ‘Death in Service’ schemes experience low numbers of claims, they are relatively inexpensive with benefit levels set as multiples of the employees’ annual salary. The flexibility allows scheme costs to be set in line with company budgets.

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