Helping employees meet the cost of everyday health needs such as dental or optical care is a popular strategy for many firms. Sam Barrett looks at what options need to be considered
Health cash plans are a low-cost way for organisations to provide their staff members with a valuable healthcare benefit, and selecting the most appropriate one can add extra value for the employer, too.
For Peter McAndrew, sales director at Health Shield, the beauty of a cash plan lies in its everyday relevance. “Cash plans help staff pay for common healthcare expenses such as a trip to the dentist or a new pair of glasses. This means they’re used a lot – on average just under three times a year,” he says. “This high usage means they’re really appreciated.”
Competition in the cash plan market means that benefits vary between providers, but there is a core set.
The most common, both in terms of inclusion and claims, are dental and optical. Mike Blake, compliance director at PMI Health Group, isn’t surprised. “A lot of employees can’t afford to go to the dentist so a cash plan helps them look after their teeth,” he explains. “Anyone with sight problems will appreciate money towards new glasses or contact lenses.”
Employers can also use the optical benefit to meet their duty-of-care requirements towards digital display users by providing an eye test and, where needed, suitable glasses.
Next on the list are treatments such as physiotherapy, osteopathy and chiropractic. Raman Sankaran, sales and marketing director at Simplyhealth, says he’s seen a great deal of growth in demand for these. “They are rainy day benefits but these treatments can help all sorts of health complaints, from backache through to a sports injury.”
Also featuring on the schedules are specialist consultations and diagnostic tests such as x-rays and MRI, CT and PET scans. Many include alternative therapies such as acupuncture, reflexology and homeopathy, while some enable employees to access anything from aromatherapy to Reiki.
Some corporate schemes also include GP helplines, to provide fast access to medical advice, and telephone-based counselling services to offer support and information on anything from childcare to workplace stress.
A more recent addition to cash plans is medical insurance excess cover. As the name suggests, this picks up the tab if an employee would otherwise have to pay out.
Some plans are more targeted. For example, Personal Group has four cash plans. One offers the full range of benefits, but it also has one that specialises in providing cash if someone needs hospital treatment; another that pays out for convalescence following a hospital stay; and a fourth that provides death benefit.
But another key consideration when comparing plans is checking who is covered. Sarah Tanswell, workplace health consultant at Barnett Waddingham, explains: “Some plans – such as the one from Health Shield – automatically include benefit for children, which is useful if your employees have families. Others allow you, or the employee, to extend cover to family members.”
Whatever the style of plan, they’re easy to use. Employees pay for the treatment they want and then submit a claim with the receipt to get their money back. Unlike medical insurance, there’s no need for a doctor’s referral: employees can have treatment when they feel they need it.
Claims are settled quickly and simply, too. “We’ve made it as easy as possible to submit a claim,” says Steve Mason, business development director at Personal Group. “We pay the money straight into an employee’s bank account within days. All they have to do is prove they had the treatment and we’ll even ring hospitals to check if they give us an authority to do this.”
Although they offer access to a wide range of healthcare benefits, cash plans are low cost, with many offering company-paid cover for £1 a week or less.
At Westfield Health, for example, for around £1 a week (£4.33 a month), its company-paid product Foresight offers benefits that include up to £55 for optical, a further £55 for dental, £150 for therapies such as physiotherapy and acupuncture and £200 for diagnostic consultations.
Make a cash plan employee-paid and because policyholders are more likely to claim, the benefits won’t be as great as if the employer picked up the bill.
Cash plan providers also offer a range of cover levels. Westfield’s Foresight has four levels of cover, with the payout increasing in line with the price.
For example, by level four the amount of annual benefit for dental has increased to £220 for a premium of £26 a month.
Tanswell adds: “It’s common for an employer to put in the basic level of cover and allow staff to top it up if they want.”
Suiting your staff
What makes cash plans even more attractive from a cost perspective is that the premiums aren’t age related and, because there are caps on the amount that can be claimed, pricing doesn’t change much.
“We haven’t changed pricing significantly on our company-paid cash plans for at least 10 years,” says Sankaran. “We review it regularly and may adjust it if we need to add further benefits, but it is extremely stable.”
The profile of your workforce can also determine what is offered. “This can depend on the demographics,” says Blake, who recommends surveying staff to get a sense of what will be popular. “A younger workforce might prefer more physiotherapy and dental benefits, while an older workforce may be keen on the optical ones.”
Plans can also be designed to suit an employer’s wider objectives. Paul Shires, sales and marketing director at Westfield Health, explains: “When money’s tight an employer could provide a cash plan instead of a pay rise: staff like them as it puts money in their pockets for everyday healthcare.”
Employers can also use them to help tackle absence, by including plenty of cover for physiotherapy and other treatments for common musculoskeletal problems or an employee assistance programme if there are issues with stress across the workforce.
While plans are fairly flexible, if you can’t find an off-the-peg solution, it’s possible to bespoke benefits.
Some providers insist on a minimum scheme size. For example, Simplyhealth requires an employer to be paying for cover for more than 1,000 staff, but others are happy to bespoke for much smaller groups.
“Our Mosaic plan allows companies with as few as 20 employees to bespoke a plan,” says Shires. “All 21 benefits and services we offer on our standard cash plans are available on Mosaic and, as long as employers select at least two of the core benefits – which include dental and optical – they can have whatever they like.”
Secrets to success
Being able to flex a cash plan in this way can prevent duplication. Health Shield’s McAndrew says that where an organisation already has an employee assistance programme they could remove the counselling benefit or, where they offer eyecare vouchers, they could strip out the optical benefit. “On our plans every benefit can be tailored, providing the annual premium is at least £3,000,” he adds. “They’re very flexible.”
Having a plan that suits your workforce is important, but even the most carefully tailored plan can fail if it’s not promoted enough to employees. The providers are well positioned to help. “We have a large sales force that goes out to explain cash plans to employees,” says McAndrew. “When they understand how easy it is to use, usage increases.”
As well as giving presentations to staff, all of the providers can support employers’ marketing campaigns. For instance, Westfield Health has produced videos on YouTube to help organisations tailor their approach. Shires says: “We can help HR teams build a campaign that’ll suit different staff members. This can include workplace posters and emails for employees with access to computers, but also postal promotions for anyone who might be on the road more.”
The breadth of benefits on a cash plan also means they work well alongside other healthcare products, such as medical insurance. Sankaran says: “If an employee has an excess on their medical insurance they may be reluctant to use it for a consultation or tests. Instead they could use their cash plan then fall back on the medical insurance if they needed treatment.”
Furthermore, unlike medical insurance, there’s no need for a GP referral for treatment. This means that if an employee pulls a muscle and needs some physiotherapy, they can have it sorted quickly and easily.
Having several products with the same benefits can cause confusion, so PMI Health Group’s Blake says it’s important to signpost staff to the most appropriate one. He says: “Physiotherapy is available on both cash plans and medical insurance but an employee won’t be able to use the benefit on the medical insurance if it’s for a chronic or pre-existing condition. This needs to be explained.”
As well as working well alongside other products, a cash plan can also support a broader health and wellbeing campaign. For example, a campaign focusing on reducing the risk of heart disease could include details of the links with gum disease and encourage employees to get a check-up.
“An employer can use a cash plan behind all sorts of wellbeing campaigns,” adds Tanswell. “Enabling the employee to access the treatment, whether it’s a spot of acupuncture or an eye test, can really reinforce the messaging.”
A cash plan can also help an organisation to build a strategy where it doesn’t already have one. Shires explains: “Our plans include an online health risk assessment, which can give employers a snapshot of their workforce’s health. As well as establishing a line in the sand for any future campaigns, this can help them identify any problems and introduce interventions to tackle them.”
With their ability to do everything from help an employee look after their health through to supporting an employer’s health and wellbeing campaign, a low-cost cash plan can provide a significant return on investment.
Finding one that really fits the needs of your organisation and its employees will boost this further still.