If you read nothing else, read this…
- Lower PMI premiums do not necessarily mean a less satisfactory employee experience.
- Consultants and advisers are good sources of information about the quality of a PMI provider’s service.
- Employers could survey scheme members to assess their opinions on the benefit.
With most PMI schemes subject to annual review, how can employers assess the quality of their current provider or one they might want to switch to?
Price will be a significant consideration. PMI premium inflation is currently running at about 8% or 9% a year, but advisers say there is not necessarily a correlation between the cost of premiums and the quality of the service.
Bernie Clark, head of healthcare and risk at JLT Employee Benefits, says: “The discussion around pricing is often overplayed. I can’t think of any ‘cheap as chips’ providers in the PMI market who are cutting services to win on price.”
Employee experience
Clark and other advisers point out that lower premiums do not automatically mean a less satisfactory experience for employees. Because premiums can be based on claims experience, they may simply mean that a scheme has been well run with few claims, enabling the provider to keep premiums down.
There are other ways to reduce costs, such as changing the level of benefits offered, but PMI has consistently been voted one of the most popular healthcare benefits, so many employers will not want to reduce a scheme’s appeal.
Apart from price, advisers say there are many other factors employers should consider when choosing a PMI provider, including the quality of support and administration, as well as brand recognition.
To ascertain the service on offer to staff, employers should look at factors such as: hospital lists, value-added services such as helplines, web-based support, including information on healthy lifestyles and medical symptoms, communication literature, ease of making a claim and speed of clinical intervention to ensure a claimant receives the right treatment and can return to work quickly.
The information insurers provide on these services will present them in the best possible light, so what about employees’ practical experience of services?
Clark says employers can gather information and follow up their employees’ claims experience with a phone call or survey, but adds: “We are not seeing a lot of this.”
Tim Gillingham, head of employee benefits at Mazars Employee Benefits, says: “Employers generally do not have any active mechanism for assessing claims experience, but if there is a problem, there is feedback, which is normally negative.”
Management reports
If a PMI scheme is large enough, say 100 members or more, the insurer will provide regular management reports to the employer, including information about claims and complaints. However, the best source of information about how insurers are performing is probably benefits consultants.
With multiple employers covered by several insurers, consultants and advisers probably have the best vantage point to assess employees’ experience of claims handling under different insurers.
They will become aware of the quality of service and any problems an insurer might have. When a complaint arises, the adviser is usually included in the process and kept in the loop until the issue is resolved.
Gillingham says complaints do not necessarily arise because of a problem with the provider. “Often, employees have misunderstood the benefit they have and what is actually covered,” he says. Insurers are keen to avoid having dissatisfied customers because too many complaints can tarnish their reputation.
Charles Alberts, senior employee benefits consultant at Lorica, says: “Insurers do drop the ball sometimes, and if that has severe repercussions for the employee and the employer, then their perception of the provider is seriously impaired. A bad experience can prompt an employer to think seriously about finding another insurer.”
But, like Gillingham, Alberts says that often in a dispute, it is the insurer that is right and employees are not always clear about the benefits they have and what is covered.
If an employer really wants to know about employees’ experiences, it should consider surveying scheme members annually. Insurers can do this, but employers must ensure the right questions are asked. “A carefully scripted survey will help to tease out any niggles people may have about the service,” adds Alberts.
