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Employers tweaking private medical insurance policies to cut costs
June 15, 2012
Many companies are choosing a high excess to cut the cost of employees' private medical insurance.
There could be an increase in people buying private medical insurance, after new research revealed companies are reducing the levels of cover provided to employees.
According to HR consulting services firm Mercer, small and medium-sized enterprises (SMEs) are still offering employee benefits to attract and retain staff, but many are tweaking the terms in order to save money.
"They are keeping their core benefits but chiselling at them to help trim costs," said Donna Biggs, principal at Mercer.
"In a business environment where pay rises are below the rate of inflation - if they exist at all - this ensures that they can still provide an attractive working environment and compete for talent while reducing operating costs."
Mercer found that private medical insurance has increasingly come under scrutiny by employers, due to the rising cost of insuring staff.
One of the main things affected by cost-cutting measures is the excesses on private medical insurance, with higher excesses reducing premium costs.
As a result, an increasing number of companies are choosing a £100 excess to save money and reduce claims, as a high excess makes people think twice about submitting one instead of relying on the NHS.
Ms Biggs warned: "What employers need to ensure is that ... they do not end up with employees delaying treatment because they cannot afford the excess amount, and subsequently not returning to work quickly following absence which having PMI in place was helping to negate."
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