The increased costs associated with Private Medical Insurance (PMI) is putting pressure on employers.
Pressure is being placed on HR and employers to find extra funds because of the rising costs associated with Private Medical Insurance (PMI), according to a report by Aon. The added cost doesn’t see any further advantages for staff and therefore raises the question of whether employers will keep the benefit altogether.
The impact of high cost cancer treatment particularly, combined with the increases from Insurance Premium Tax (IPT) and medical inflation may make HR reconsider the affordability of PMI for staff. Additionally, 71% of HR professionals and employers do not have any policies in place for staff with cancer diagnosis which is also having added concerns, according to research by Cancer in the Workplace.
The survey by Aon on medical trends also revealed that the average cost increase on employer-sponsored medical plans in the UK is estimated to rise by 9.3% this year.
Rachel Western, principal at Aon Employee Benefits, commented: “There is a three-way increase on PMI costs creating an incentive for employers to review funding and administration approaches to help mitigate cost increases without having to degrade benefit levels.
“PMI is already largely a benefit for higher-paid employees – our concern is that if associated costs continue to increase, it will become even more of an elite offering. Insurance Premium Tax (IPT) has gone up in the last two Budgets from 6% to 9.5% and then to 10%. With IPT at significantly higher levels in some EU countries - in excess of 20% - there is growing concern that further rises may be forthcoming.”