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PMI undervalued by employees

EMPLOYEE BENEFITS

PMI undervalued by employees

One in three employees surveyed by Watson Wyatt report they would not continue with private medical insurance, if their employer were to withdraw it as a benefit.

According to the survey, employees undervalue PMI because they do not appreciate the cost of the benefit:

  • 42% of employees with PMI have "no idea or only a vague idea" of the cost to their employer.
  • When asked about the cost of purchasing the equivalent level of PMI on an individual basis, employees currently provided with PMI by their employer estimated the cost on average to be £450 a year.
  • For most this would be a significant underestimate of the typical cost -- for example, a 40-year-old with a £100 excess could pay up to double that amount in some circumstances. Furthermore, any individual product is likely to involve lower levels of benefit and hospital choice and a greater degree of underwriting.

A final word

"Companies need to make their investment in this significant employee benefit work harder. Communication is crucial. Before employees can consider PMI as an important element of their employment package, they need to be able to understand what is available, how the cover breaks down and the cost implications of not having it." -- David Cross, head of healthcare and risk, Watson Wyatt.

Want to know more?

Title: Healthcare Survey 2005, Watson Wyatt.

Survey sample: The research is based on more than 250 leading UK employers, representing in excess of one million employees.

Availability: A summary of the survey results is available at www.watsonwyatt.com/europe/research/resrender.asp?id=UK-HCS-2005& page=1

If you are interested in receiving a full copy of the survey results, or if you would like further information about the survey, contact:   David Cross, tel: +44 (0) 20 7227 2415 or email: david.cross@watsonwyatt.com

Watson Wyatt is a global consulting firm "focusing on human capital and financial management". It specialises in employee benefits, human capital strategies, and insurance and financial services. Watson Wyatt has more than 5,800 associates in 89 offices around the world. For more information visit www.watsonwyatt.com

Posted 3 October 2005