Survey of UK private health plans

EMPLOYEE BENEFITS

Survey of UK private health plans

Despite the spiralling cost of private medical care, more employers now offer subsidised medical benefits to all staff -- not just managers and other senior employees -- according to a survey by Mercer Human Resource Consulting. 

The survey of more than 800 organisations found that over half of respondents (51%) now extend cover to all employees compared to 41% in 2001.   

"There is now more pressure on organisations to offer private medical benefits to all staff, to avoid discrimination claims from certain groups such as part-timers," said Steve Clements, European partner at Mercer.  He added: "Employers face a dilemma because they want to provide medical cover but, at the same time, the cost of insurance is rising by as much as 10% a year."

Extension of membership

Of those organisations that offer subsidised medical benefits:

• 25% extend cover to all dependants
• 61% to a defined category of dependants
• 11% do not cover dependants at all. 

Almost one in three respondents (29%) still do not cover unmarried partners, although this has reduced from 52% in 2001. Furthermore, nearly four in ten (39%) do not cover same sex partners although, again, this is lower than in 2001 (56%). 

Steve Clements said: "While many health plans are slowly evolving, a considerable number are still out of touch with current social trends. As the emphasis on inclusiveness and diversity increases, more companies will be under pressure to change their plans."

Nearly a fifth of organisations (19%) provide some form of company-subsidised cover for retirees, but this has reduced from 23% in 2001.  

Drivers of private medical provision

• The survey found that fewer than one in ten respondents (9%) thought increased funding and recent structural changes in the NHS would reduce the pressure to provide private healthcare benefits.   
• Under a third of survey respondents (29%) could demonstrate that providing healthcare benefits improved employee return-to-work rates, while less than a quarter (24%) could show that it helped to attract and retain staff. Yet, in a 2001 survey, 95% of employers said these were the two main objectives of having a medical plan.   
• Many organisations rely on intuition rather than fact when deciding whether to provide private medical cover, finds Mercer.

Long-term disability cover

Three-quarters of organisations have removed the HIV/AIDS exclusion in their disability insurance plans in response to the potential changes in disability legislation. But, of those respondents who still have an exclusion, three-quarters state that they do not accept any liability in the event of a claim.   

Steve Clements said: "Under the Disability Discrimination Act, employers are not allowed to discriminate against disabled employees in the provision of healthcare benefits. It is surprising that some organisations still exclude HIV and AIDS from their policies and do not feel the need to self-insure their potential liability."

Other key survey results

According to the survey:

• 89% of companies provide company-funded life assurance
• 70% offer income protection
• 10% provide critical illness cover
• despite the increasing popularity of flexible benefit schemes, less than one in ten employers offer access to voluntary benefits. 

Want to know more?

Title: UK Private Health Plans: Survey results, Mercer Human Resource Consulting.

Availability: Further details are available from client services, Mercer global information services, tel: +41 22 869 3000 or visit www.imercer.com

Mercer Human Resource Consulting is the "largest consulting firm of its type in the UK, helping organisations create business value through their people". It employs some 3,000 staff in 15 office locations in the UK. To find out more visit www.mercerhr.com

Posted 1 April 2005