Healthcare Research 2010: Package – which employee healthcare benefits are on offer

Wellbeing initiatives such as workstation health audits and EAPs are still the top two core benefits, while perks for dependants prove popular, says Jennifer Paterson

The most commonly-offered core healthcare benefits have changed little over time. In recent years, however, the proportion of employers that provide these as core has increased, particularly where these are given to all staff.

In 2006, workstation health audits (55%) and employee assistance programmes (43%) were the second and third most common core benefits. These have now risen to top the table, offered by 71% and 69%, respectively. The percentage of respondents offering these benefits has also increased year on year. In 2009, each was offered by 47% of respondents.

Four years ago, private medical insurance topped the list of core benefits – offered by 58% of respondents. Its appearance further down this year’s list may be because of the way the question is now asked, differentiating between employers that provide the perk to all staff and those that offer it to a select group.

The prevalence of optical benefits has increased over the years. Back in 2006, 22% of respondents offered optical benefits above statutory minimum. This year, 48% offer optical benefits. The increase may be because of a growing awareness among employers of legislation such as the Corporate Manslaughter and Corporate Homicide Act 2007.

Wellbeing perks have also risen in popularity as core benefits. These include subsidised gym or sports facilities, now offered by 28% of respondents to all staff, compared with 19% that provided the perk for staff back in 2006. Health and wellbeing campaigns have risen to 43% this year from 22% in 2009 and nutrition advice is up to 21% from 10% last year.

Meanwhile, health cash plans have lost popularity as a core benefit for all staff. All these changes may be due to employers’ need to control costs in the recession, while continuing to offer perks to look after staff wellbeing.

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The types of healthcare benefits offered via a voluntary benefits plan (paid for by the employee, rather than the employer) are often very different from those provided on either a core or flexible basis.

Less expensive benefits tend to do well in these staff-paid schemes, with health cash plans for both employees and their dependants topping this year’s list. This year’s findings show almost a quarter (23%) of organisations offer health cash plans for employees as a voluntary benefit.

As with flexible benefits plans, voluntary benefits plans are a popular way to allow staff to buy benefits for dependants at cheaper rates than they would get them on the high street.

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Employers are restricted in the healthcare benefits that can be offered through a flexible benefits scheme. Perks offered in this way are those that can be commoditised, such as insurances. Many wellbeing benefits and occupational health services cannot usually be offered through flex.

However, flex provides the perfect vehicle to allow staff who already get certain benefits as core to extend these to their dependants.

This research shows how popular benefits for dependants are through flex. Dental insurance tops the list as the most commonly offered health benefit through flexible benefits, ousting private medial insurance from the top spot it held in 2009.

In terms of how often healthcare benefits are reviewed, little has changed since Employee Benefits first posed this question in the 2003 research supplement.

That year, two-thirds (67%) of respondents said they had reviewed their health benefits in the past year, while 10% had not conducted a review in more than three years. Although the figures cannot be compared exactly, this year, two-thirds of respondents said they review their health benefits annually and 8% do so at least every three years. Overall, the percentage that review their benefits more than once a year has dropped considerably since 2003, from 23% to 10%.

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Just over one-third (36%) of respondents do not intend to take any action with regard to their organisation’s health perks in the next 12 months. The most popular option among those that will take action is to increase the number of benefits on offer to staff.

This is followed by respondents’ intention to review the fees or commission paid to brokers, advisers and providers, cited by 18%. However, this is a fall on the 34% that said the same in 2009.

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