[SPONSORED BY MEDICASH – READ HEALTH & PROTECTION’S Q&A WITH MEDICASH’S PAUL GAMBON HERE]
Employers are anxiously awaiting a Budget which could increase cost pressures on UK plc even further.
They have been grappling with hikes to employer national insurance contributions and premiums are on the increase while employees are expecting more from them.
Consequently, organisations have had to cut their cloth accordingly as they seek more affordable health benefits which has led to spiralling demand for whole-of-workforce cash plan benefits across all sectors.
Current demand is so high that one provider has even welcomed a new entrant to the market.
But employers can only truly derive benefit from cash plans when their employees really understand what is on offer and advisers are playing a crucial role in helping them do this.
And the consensus is that demand is only likely to continue as pressures on purse strings and on the NHS shows no signs of abating.
Affordable option
“Clients increasingly like the affordability and accessibility that cash plans offer,” Kevin O’Neill, associate and consulting lead – health and protection at Barnett Waddingham, tells Health & Protection.
He notes the focus on everyday health costs like dental check-ups, eye tests, physiotherapy, and even mental health support is attractive and makes healthcare more accessible to all.
“Cash plans are increasingly seen as a relatively low-cost option to help the financial burden and stress on employees in the current cost of living crisis, leading to improved wellbeing, higher productivity, and fewer lost working days,” O’Neill adds.
No signs of slowing demand
According to Paul Gambon, sales and marketing director at Medicash, demand for health cash plans shows no sign of slowing down.
“We’ve seen year-on-year double digit growth, with virgin business accounting for 75% of all new sales – a clear indication of the market’s strong potential,” he says.
“Awareness of the benefits of health cash plans has improved dramatically over the last 10 years as company leaders realise the impact of offering whole-of-workforce health cover, rather than just covering a small percentage of the workforce with more expensive insurance benefits.”
Gambon adds that demand seems fairly consistent across the board, with not one sector or community more enthusiastic than another.
“This points to an overall increase in awareness of employee wellbeing,” he continues.
“Cash plans are one of the most useful benefits available to the whole workforce, as they have the capacity to support everybody at any time – particularly when there’s a focus on accessible digital benefits – so they continue to be popular across every business with employees.”
Greater use could drive up premiums
While employers want their staff to make use of these benefits, one potential issue is rising premiums, according to Debra Clark, head of wellbeing, Towergate Employee Benefits
“There is a tricky balance here,” Clark says.
“Encouraging use of cash plans could drive up usage and therefore future premiums, however cash plans are still less than the cost of private medical insurance (PMI), or dealing with something when it becomes a major issue.”
Another key issue comes is where companies have a duplication of services – such as a virtual GP or employee assistance programme (EAP).
“It would be great if some of the providers could work together and offer their menu of services, so that clients could then pick and choose,” Clark continues.
“But I appreciate this would be complex, and if a company were to move providers – be that cash plan, PMI or group risk – it would require re-visiting the suite of services each time.”
Helping employees understand benefits
All of this underlines the importance of intermediaries helping their client’s employees to understand the benefits.
Mike Hesch, head of UK employee benefits at Engage Health Group, says: “We are helping companies to understand those benefits and to communicate them to employees.
“For example, directing the employees to use the support and tools available on a cash plan first, not only gives the member quicker access to treatment with no need to see a GP, but it then helps the employer to reduce claims made on any private medical scheme.”
According to Emma Wood, director of healthcare at Broadway Insurance, usage information available with cash plans is “extremely valuable”.
“This alongside an employer’s data around absence allows us as advisers to assist with focussed tailored campaigns to promote particular benefits and target specific issues,” Wood says.
“The wellbeing calendars available with the cash plan providers also helps a company to select topics that are most relevant to them and create internal campaigns to again promote employee engagement in their own health and wellbeing.”
Making benefits easy to use
Making offerings easy to use also plays a part.
Medicash’s Gambon says this has been a priority for the provider.
“We’ve made sure that all of our digital benefits are available in a single place which means our policyholders can find everything they need to both monitor and support their health in one simple place,” he continues.
“Prioritising ease of access and usability is key to growing engagement, which is why our clients often report high levels of digital use – one of our clients has reported a 95% engagement rate by only their second year with Medicash.
“There’s also the fact that health cash plans are often a significantly cheaper alternative to PMI, allowing employers to offer a comprehensive range of cover – under one single umbrella, for a much lower cost, and to a much wider employee base.”
Unum enters the market
Of course this is market that has been shaken up by the recent entry of Unum, and this is a move that has been welcomed across the industry.
Claire Cutler, director health and benefits at WTW, says: “A number of cash plan providers have been reviewing their propositions to ensure they remain competitive and relevant.
“Unum’s entry in the market can only be seen as a good thing, and will allow providers to focus on developing their uniqe selling points to ensure they stand out.”
And rather than fearing a new competitor for business, Gambon welcomes them.
“This bodes well for the market as a whole,” he says.
“The majority of UK companies still don’t have cash plans in place – less than 6% of UK employees are currently covered by a cash plan paid for by their employer – so the open market for growth is huge without too much concern about specific competitors.
“In fact, we’re hopeful that this will raise awareness of the many benefits of cash plans as an affordable whole-of-workforce solution among intermediaries and organisations, meaning this should stimulate further growth and demand within our industry.
“Competition is healthy and drives all providers to be even better and continue innovating,” he adds.
Measure success in outcomes
Hugh Bennett, director of corporate consulting at Howden Employee Benefits, says the company expects the growth of cash plans to continue over the next 12 to 18 months, albeit at a slower rate, as businesses look to support workplace health and retain top talent.
“Employers are seeing the value cash plans bring and also have a greater focus on benefit equity,” Bennett says.
“So, we expect many to keep extending cover to everyone, rather than just a few, to support inclusive workplace wellbeing.
“I believe we’ll also see more integration with digital health tools, quicker diagnostics, and a continued focus on prevention. Dental cover will continue to expand because NHS provision simply isn’t meeting demand.
“But above all, success will be measured in outcomes – are we helping people stay healthy, reducing days lost, and supporting businesses to be more productive? That’s where cash plans will prove their true value.”
Kristian Breeze, director of healthcare at Ascend Broking Group, agrees adding demand for cash plans should continue to grow while NHS backlogs and workforce health pressures persist, and as employers seek cost‑effective benefits that reach the many rather than the few.
“Competition from new entrants will quicken innovation, particularly around navigation, prevention and actionable management information,” Breeze continues.
“The most resilient propositions will be those that help employers demonstrate tangible absence and productivity gains, link employees to care within hours rather than weeks, and keep premiums predictable through modular benefits and better data.
“On that basis, cash plans look set to remain a frontline tool in workforce strategy rather than a peripheral perk.”
