At the start of the year, employers across the country may have hoped that 2022 would have offered some respite after two years wrestling with a pandemic which forced staff to turn bedrooms, lounges and attics into office space and firms of all sizes to take out private medical insurance for their employees.
Health & Protection has found that trend is continuing and demand for such cover is only increasing, and insurers are responding to this demand accordingly.
But employers are also dealing with the fallout of musculoskeletal and obesity health issues created by more sedentary lifestyles in lockdown and the mental health issues associated with soaring inflation and a cost of living crisis.
As unemployment levels continue at record lows, the question for employers is no longer whether to introduce private medical insurance but can their business afford not to introduce such a benefit to effectively recruit and retain talent?
“Despite the looming recession and the resultant constriction on employer cashflows, many employers are now actively considering introducing or widening access to private healthcare treatments for their employees,” Steve Herbert, wellbeing and benefits director at Partners&, tells Health & Protection.
According to Herbert, this trend appears to be driven by the growing realisation that NHS services are currently “buckling” under the pressure of the post-pandemic period as waiting lists in England soar past seven million.
But with changes in the way people are working other issues are also coming to the fore and driving employee health needs.
MSK and mental health issues
Marcia Reid, non-executive director at Sherwood Healthcare, points out that people have been moving less as the daily commute alone was often a useful form of exercise and a more sedentary way of working can have a negative effect on people’s health.
“Insurers are already saying that they are seeing increased musculoskeletal (MSK) problems as a result of poorly configured work stations at home,” Reid revealed.
“The isolating effect of working at home can be challenging for those living alone can have a profound on mental health and wellbeing.”
Steve Ellis, associate director at Prosperis, agrees – adding that some of his clients are concerned about increases in musculoskeletal conditions and potential health consequences of obesity.
“What we are seeing now with unhealthy lifestyle may impact claims in a decade or so time. Insurers need to continue and expand encouragement to live a healthy lifestyle,” Ellis says.
Insurers see rising demand
Vitality is one insurer seeing greater use of its offering with a notable increase in demand for value added services and particularly for mental health support, in part due to the ongoing impact of the pandemic on individuals.
“What’s more, we also anticipate this growth in demand will continue as the cost-of-living crisis has more of an impact,” the insurer says.
“This is one of the reasons we’ve taken steps to make access to mental health support more accessible than ever within our health insurance, removing underwriting restrictions for this benefit to provide greater access to support and vital treatment for more people. This has been extremely well received.”
Axa Health has also seen increased demand for mental health services from large corporate clients and has taken steps to support demand in this area.
“There are two levels of employee assistance programme service which include access to life management support, legal information and guidance on managing debt; and access to the Thrive app, which helps to boost mental wellbeing, manage mood, improve sleep and build resilience,” the insurer tells Health & Protection.
“And we launched the Axa Health App to help people make lasting changes to their health and wellbeing.”
According to Jason Ellis, sales director at Aviva, the insurer has been supporting employers and their workforces, with initiatives including its line manager toolkit- mental health, employee-facing training videos, a webinar programme and expert content and guides.
Can companies afford not to offer PMI?
But the cost of living crisis and the fallout from the pandemic are not the only issues employers are wrestling with.
The UK unemployment rate has plunged in 2022 to levels not seen for half a century – meaning recruitment and retention are more important than ever for companies.
Isaac Feiner, owner of Lifepoint Healthcare, tells Health & Protection while clients usually have a very specific reason as to why they approach his company for advice, in many cases the reason is recruitment and retention.
“Equally, it’s not always about that and is simply to do with ensuring people are well looked after in the event of an acute medical necessity,” Feiner says.
“Can companies afford not to offer group PMI now amid a dearth of talent out there right now?
“Given the easy price point on new schemes and the myriad of options in terms of structuring a plan it would be silly not to in my opinion. PMI should be a baseline benefit.”
While there maybe more willingness to offer health cover, Debra Clark, head of specialist consulting at Towergate Health & Protection, adds employers still want to get maximum value from their spend on PMI and ensure as many employees as possible can benefit.
“This is a conscious decision to try and retain their talent and also attract new talent,” Clark adds.
“The newer generations joining the workforce are looking at the benefits being offered. It isn’t as much about salary for them as the whole package, and private medical insurance remains one benefit that people are hoping to get.”
A ‘need to have’ benefit
Ultimately, according to Reid, amid diminishing employee wellbeing caused by the continued fallout from the pandemic and a cost of living crisis, PMI has moved from a ‘nice to have’ to a ‘need to have’.
But she expects firms will be considering measures to keep premiums sustainable.
“Clients are very loathe to cancel policies, but I suspect that we shall see more groups upping their excess allocation and exploring other cost containment initiatives,” Reid says.
“While I would never criticise the NHS where so much fantastic care continues to be offered, we cannot ignore the growing pressure on the state funded system and it is inevitable that the postcode lottery will continue to have an impact and waiting lists will grow.
“As premiums get higher and the resulting P11D exposure increases, it is vital to encourage the younger, healthier members of corporate schemes to remain on the policies and to understand the added value benefits, even when they are not ill.
“This understanding of the value of the proposition will enhance employee loyalty and help maintain a healthy workforce. The cost of replacing employees who move to other businesses is far greater than the cost of providing suitable healthcare cover to help retain the employees you already have in place,” she concludes.
