Brokers - Recession proof your selling power
As the recession forces employers to make cost savings
where possible, Peter Lauris advises how intermediaries can ensure
healthcare benefits are the one expense which will
survive.
A recession is synonymous with cost cutting and radical
operational changes. Any organisation wanting to survive will need
to look closely at all its expenditure. The battle for suppliers is
to keep the customers they have, increase spend where possible and
generate new ones. During the economic downturn it is more crucial
than ever to prove to organisations that they cannot afford not to
have what you sell.
Employers will face tough decisions as they aim to make their
organisation financially stable. Whilst reducing or removing
employee benefits, such as healthcare, may seem like a quick fix,
the reality is it is just a false economy long term. Intermediaries
need to warn potential and existing clients about the negative
impact making cutbacks on healthcare benefits can have; and to
educate them about the importance of keeping a healthy, cared for
workforce. Having in-depth, up to date industry and product
knowledge and offering a range of affordable healthcare solutions
is vital.
CASH PLANS - THE HEALTHY CHOICE
One healthcare product which continues to see significant growth
and rising popularity is the healthcare cash plan (HCP). Appealing
to both the corporate and consumer sector, Laing & Buisson last
year reported a considerable 27% rise in employer paid HCPs in
2007. Cash plans are considered to be a cost effective way for
employers to show they care for their employees by investing in
their health and wellbeing and they may help reduce absenteeism due
to ill health. Controlling absenteeism levels is particularly
crucial during the financial crisis as individuals worry about job
security and money issues. A recent survey by the research
organisation Work Life Balance and Coventry University has found
that absenteeism nearly doubled during the onset of the recession.
Employers should therefore be looking at products like cash plans
to maintain employee health to ensure this problem does not
escalate.
Cash plans cover the cost of everyday healthcare such as visits
to the dentist and optician, to stays in hospital, consultancy,
health screening and stress counselling. HCPs, such as the ones
provided by Medicash, can be excellent value for money with every
pound spent on the plan equating to £17.50 worth of potential
benefits for employees to claim. Employers may make further savings
by securing P11D income tax relief on health spending where it is
classified as duty of care. HCPs also allow organisations to budget
long term as their premiums are robust and less likely to change
because of their more predictable claims models.
HCPs can also provide a healthy result for intermediaries. . The
plans provide a lucrative income stream because the attraction of
low monthly premiums and their inclusivity allows them to be
implemented across an entire workforce. Also, when the plans are
underwritten they are based on a community pricing strategy which
means if a client has high claims in one year, it should not mean
increased premiums the next. Once an organisation has a HCP they
often become loyal customers as they see the benefits first hand,
resulting in regular renewal and commission for intermediaries.
MORE FOR YOUR MONEY
Intermediaries can improve the relationship with their client by
adding value to the service they provide and discussing the merits
of HCPs is an ideal way to do this. The inclusivity, affordability
and flexibility of a HCP means that intermediaries can offer their
client a healthcare product that may actually provide them with a
wider range of benefits for a greater number of employees and at a
lower cost than PMI. Also it is not just the employee who can gain
from the greater number of benefits but their entire family too;
employees are able to extend their cover to include their partners
at a discounted rate and their children at no extra cost. Regular
communication with a client will also serve to strengthen a
relationship and intermediaries can obtain regular claims history
reports from the HCP provider which may identify possible risk
factors. For example, if a report identified above average claims
for chiropractic treatment, the client may need to retrain staff on
lifting and manual handling; information the client may find
invaluable.
When advising a client, intermediaries need to find the best
solution to fit an organisation's needs yet have the knowledge to
find another option if their circumstances change. For example, a
client who has always opted for private medical insurance (PMI) may
find the rising annual premiums too costly to maintain but fear
removing it from the benefits package could affect employee morale
and absenteeism levels. An effective solution would be to introduce
or increase a voluntary excess on the PMI policy and the amount
saved on the premium could then cover or significantly reduce the
cost of implementing a cash plan. Any future PMI excess claims for
the initial specialist consultation can then be paid by the
individual using their HCP. The two products work well together,
offering an increased number of benefits to the employee and at
little or no extra cost.
STRESS FREE
Implementing new employee benefits can be perceived to be an
administrative burden but HCPs are one of the simplest and cost
effective options available to employers. All that's required are
basic employee details, and the HCP provider will deal with all the
welcome packs and product information liaising directly with the
employee. No medicals are required for employees to be covered
which also saves time and resource.
It's important that intermediaries take their Treating Customers
Fairly (TCF) obligations seriously, as failure to offer a full
range of solutions to a client may result in the relationship being
damaged if the client later discovers more options which they were
not made aware of initially. Many decision makers access
supplementary advice themselves so it is critical intermediaries
are fully up to date with a comprehensive product knowledge.
Advisors also need to ensure that they are aware of the USPs
specific to different providers which are not necessarily limited
to the obvious optical and dental cover. For example, Medicash
provides access to expert medical opinions through their
association with Best Doctors, a service which is not available
through any other HCP offering. This is also an added benefit for
those enrolled in a PMI scheme as well.
A PICTURE OF HEALTH
The recession has given organisations the opportunity to
re-evaluate their expenditure and how they look after their staff.
Employers need to realise that employees are the key to an
organisation's success and it is essential that their health and
wellbeing remains a top priority during the economic downturn.
Discussing healthcare cash plans and demonstrating their value for
money and flexibility should be top of the agenda for any
intermediary wanting to survive the recession; and doing so will
result in a healthy outcome for all.
Peter Lauris is sales and marketing director at
Medicash
Top 5 reasons to sell HCPs
1) Tangible benefit Real value for
money and cash back for the individual when it's needed the
most
2) Reduced PMI annual premium HCPs
can work alongside PMI to lower costs whilst adding another range
of benefits to the healthcare package
3) Lucrative income stream
Inclusivity and affordability means all the workforce can benefit
and the plan can be provided for years to come
4) Treating Customers Fairly (TCF)
obligations Looking at HCPs for a client when reviewing their needs
will ensure intermediaries meet their obligations
5) Underwriting Most HCP's are based
on a community pricing strategy, so if a client has high claims in
one year, it shouldn't mean increased premiums the next
Top 5 reasons why your client should have
HCPs
1) Cost effective HCPs are
affordable investment in an organisation's most valuable assets;
it's people
2) Inclusivity & flexibility All
the workforce can benefit, different levels of cover can be
provided and cover can be extended to included partners and
children
3) Time effective HCPs are quick and
easy to implement throughout the entire workforce
4) Duty of care Employers must
prevent risks to the health of its employees and adhere to legal
obligations
5) A healthy workforce is a happy
workforce Employees feel valued and so are motivated, productive
and loyal