Friday, 8 October 2010

Who should be responsible for employee healthcare?

The new Healthcare Reform Act in the US places some of the burden squarely on the shoulders of the employer. In the UK, we have the NHS to take care of our daily healthcare needs. The employer collects National Insurance Contributions from staff on behalf of the government and this in turn funds our state healthcare system.

Private Medical Insurance (PMI) can provide the additional benefits of greater patient choice, speedier and often more convenient appointment and surgery times, and often a more comfortable hospital environment.

One point significantly different from the US, is that UK PMI schemes tend not to cover maternity and chronic conditions such as diabetes which can be managed by the NHS.

In the early 1980’s company funded PMI was viewed as a perk for higher management. In our more egalitarian period of the 90’s these benefits were offered to the wider employed population, although still mainly ‘white collar workers’, and currently a healthcare trust for a major corporate can cost upwards of £20 million ($30m) annually. Companies have talked about dropping this expensive benefit but it is seen as a ‘must have’ for senior employees and would be very difficult to remove despite rising premiums year on year.

There are currently 4.1 million PMI policies held in the UK and just over 3 million of these policies are company funded for employees, (only 5% of the UK population) often with no personal contribution required. Do these schemes keep people healthy or are they just a recruitment tool? In a large corporate funded health scheme it is not unusual for only half the members to claim each year (and it is often the dependants and not the policy holder who claim)

And what about health and wellbeing solutions too? Does company funded healthcare keep staff healthy? How do you measure ROI on health screening and wellbeing programmes? Should an employer bear the cost of keeping their staff healthy? Or are the key benefits the ‘feel good factor’ – that an individual believes that their employer cares for their wellbeing? Should an employer incentivise an overweight employee to lose weight and maybe directly reduce their healthcare costs?

Comments please….


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