Healthcare cash plans have been around for decades but providers are now extending their core products to include services such as health screening and GP helplines for little or no extra cost, says Victoria Furness
Healthcare cash plans, which typically reimburse employees for dental, optical and physiotherapy treatments, have grown in popularity as a benefit in recent years.
Although cash plans have been around for many years, a number of providers are now extending their core products to include services such as health screening, counselling, discounted gym membership and GP helplines for little or no extra cost.
Westfield Health, for example, offers a cash plan called Foresight Healthcare, which provides employees with 100% cash reimbursement for routine dental, optical and therapy treatments. It also offers access to MRI, CAT and PET scanning and a 24-hour employee assistance programme (EAP), which includes up to six face-to-face counselling sessions. The plan starts at £1 per employee a week and for an extra 15p a week, employers can include an employee's child on the plan or add in a fitness module giving access to discounted health club rates, a free GP telephone helpline and a website containing health information.
These bundled cash plan products are a compelling proposition for employers that want to offer employees a suite of benefits but have little budget to do so. There is also a commercial benefit in offering perks that can help to prevent ill health or that encourage prompt treatment for employees with health problems.
These products can also be used by employers alongside private medical insurance or other healthcare benefits to fill any gaps in cover. Jill Davies, executive director at Westfield Health, says: "If you take the example of dental cover, the cash plan might cover the technician's fees, which may not be included in the standalone [dental insurance] benefit."
Medicash has taken a slightly different approach by allowing employers to 'pick and mix' add-on benefits depending on their requirements, rather than just bundling its additional offerings into one package. Peter Lauris, sales and marketing director at Medicash, says: "The pick and mix approach should be more attractive as clients can choose exactly what benefits they want. And for us, as a supplier, we can add new benefits or remove redundant ones depending on take up."
Cash plan providers are able to offer these add-on benefits at little extra cost due to the purchasing power of their membership and the economies of scale that brings. Organisations such as HSA, which is part of the Simplyhealth Group, can also draw on the resources of other companies in the group, such as health screening for healthcare diagnostics.
However, as the old adage goes, you usually only get what you pay for. Employers should be aware, therefore, that employees may face some restrictions on what they can claim under the additional benefits, given that they will be paying less for these than a specialist provider would charge. Health screening specialist, Nuffield Proactive Health, for example, offers anti-oxidant level measurements and computerised spinal assessments in its health assessments, which go way beyond the cholesterol and blood pressure tests that a cash plan with add-on health screening might offer.
Medicash's Lauris accepts there is a difference in the levels of provision, but referring to its own health screening provision, says: "We give a snapshot of an individual's health at a particular time, but we don't do full medicals, which is something quite different."
Some healthcare specialists also question including EAPs in cash plans. Paul Roberts, healthcare consultant at broker IHC, says: "An EAP isn't an add-on service, but should be purchased as part of a comprehensive health and safety plan to reduce pressure or stress in an organisation. I'd question the ability of cash plan providers to sell EAPs as they are not off-the-shelf products, but require advice and need to be fitted to client policies and procedures."
Many EAPs from cash plan providers will also just offer a basic counselling helpline, whereas EAP specialists will offer telephone access to a broader array of services. For example, First Assist's EAP offers employees access to relationship advice, legal assistance, employment law, and lifestyle advice, as well as access to online health portals and specialist advice for managers. Mark Holt-Rogers, a consultant at First Assist, adds: "It's a lot wider than just counselling. We also provide feedback and alert employers to areas where there might be work-related issues."
Medicash's Lauris says that its EAP service can also give feedback to employers, however, acknowledges this tends to be done on the request of an employer or once a year, whereas standalone EAP providers offer feedback on a monthly or quarterly basis.
Employers may also find that take up of add-on benefits varies depending on how the cash plan is funded. There is unanimous agreement among providers that take up will be a lot lower if the cash plan is offered as a voluntary or flexible benefit, rather than a core employee benefit paid for by the employer. "The difference is incredible. On a purely voluntary basis you'll be lucky to get 10% of the population taking it up, but if there is some level of core benefit in there, you can easily achieve 30% to 40% of staff opting to take more cover," explains IHC's Roberts.
With employers appearing to show a taste for flexible cash plans, the market is enjoying a renaissance, and general interest in improving the health and wellbeing of the workforce shows no sign of abating.
Providers also think there are opportunities to expand the range of add-on benefits in the future. Roberts, for example, believes there could be an opportunity for providers to offer access to cancer drugs or other medicines that cannot be obtained through the NHS.
Furthermore, far from cannibalising their market share, many specialist providers of health screening and EAPs are enjoying the additional revenue stream it offers. Rick Haslam, director of client relationships at Nuffield Proactive Health, points out: "There are only a few nationwide providers [of health screening] and we have partnerships with cash plan providers. Either way we're winning."
So, as long as employers check the small print, cash plans could offer a winning benefit for organisations and their workforces.
CHECKLIST
It is always wise to check the small print before signing up to any new scheme. Here are some basic questions to ask a potential healthcare cash plan provider:
How much can employees claim back on different treatments? n How soon will employees be reimbursed after making a claim?
Are employees' partners and dependants covered by the plan? n What add-on benefits are included and what will staff be entitled to as part of these?
What services will employees have access to through an add-on employee assistance programme (EAP)?
If discounted gym membership is included, how many clubs do employees have access to and are there any conditions around the use of the facilities?
CASE STUDY: Miller Hendry
Tayside law firm Miller Hendry offers its employees access to an employer-paid cash plan.
The WorkWell benefit, provided by HSA, reimburses employees for dental, optical, consultation and diagnostics, and therapy treatments (up to a fixed limit). Employees also have access to a 24-hour helpline and five face-to-face counselling sessions per year.
Mark Jackson, HR adviser, says: "It offers a level of cover that most [staff] need and most of our employees are using the benefits."
Jackson believes the plan is good value compared with standalone healthcare products. "If staff claimed everything they are entitled to each year, it would be in excess of £450. Considering the premium is £72 a year for us, that represents good value," he says.
Although the firm doesn't have an issue with absenteeism, Jackson believes giving employees free access to services such as physiotherapy could help them return to work faster in the event of ill health. He adds that the benefit is one that appeals to potential staff in the recruitment stakes.
"One of the reasons we decided to introduce the plan was to demonstrate care for our existing employees, but we also hoped this might send the right signals out to potential employees as well," Jackson explains.