News update – EU forces Powergen to switch provider

Powergen has moved private medical providers after EU regulations required it to put the contract out to tender.

Powergen, owned by German company E.On, awarded the contract to cover its staff for private medical insurance (PMI) to Bupa, after its five year contract with Axa PPP expired.

Katherine Brough, corporate procurement manager at the energy operator, said it selected Bupa following a stringent tender process, which was strictly audited. “When a contract is up, you can’t just continue it. It’s an exercise we have to do because we are a regulated business,” said Brough.

EU public procurement rules mean that utilities businesses must put insurance contracts out to tender and buy from the cheapest provider. And Brough said: “Bupa were the cheapest and most efficient company.”

But she admitted the three-phase process, which involved publishing a request for information, evaluating 15 applications and watching three presentations, was time consuming. She emphasised though that it was worth it in the end: “We feel that something like this in support of employees is money well spent. It was a big investment in time and money, but it reflects our commitment to our people.”

Over 2,000 staff at Powergen are eligible for the PMI scheme.

The directive that forces regulated organisations to tender out any insurance cover is often considered a nuisance for employers as it means employers can’t just carry on with previous providers.