Employers have been urged to help staff to understand the financial and personal value of private medical insurance, after research revealed that one in three said they would not keep it up if it was withdrawn as a benefit.
A survey of 250 leading UK employers – representing more than one million workers – found that 42% of employees with private medical insurance had no idea, or only a vague idea of the cost to their employers.
The Watson Wyatt 2005 Healthcare Survey revealed that employees who currently have private medical insurance through their company underestimate how much it would cost to purchase the equivalent level of insurance on an individual basis.
According to the survey, the average quote of £451 is a significant underestimate of the typical cost of, for example, a 40-year-old with a £100 excess, who could pay double the amount in some circumstances.
Also, any individual product is likely to involve lower levels of benefit and hospital choice and a greater degree of underwriting.
David Cross, head of healthcare and risk at Watson Wyatt said: “Companies need to make their investment in this significant employee benefit work harder.
“Communication is crucial. Before employees can consider private medical insurance as an important element of their employment package, they need to be able to understand what is available, how the cover breaks down and the cost implications of not having it.”
By Helen Gilbert