Health-related benefits provision is in decline

The provision of health-related benefits has taken a hit during the recession as employers continue to cut costs, according to a survey by Personnel Today’s paid-for sister service XpertHR.

The survey of 228 employers – covering a combined workforce of more than 790,000 staff – showed that despite remaining a popular way of rewarding and engaging employees, the provision of most health-related benefits has experienced a decline compared to findings from last year’s research.

The most common health benefit was found to be private medical insurance (PMI) – which covers the cost of treatment in the event of illness – despite the cost of such plans increasing by almost 10% each year, according to consultancy Mercer.

PMI was offered by 68.4% of employers, but this is a slight reduction on last year’s figure of 69.3%. Family cover was offered by 35.7% of employers, while 61.2% offered individual cover for employees.

The second most popular benefit offered was counselling or employee assistance programmes (EAPs) at 62.8% – another reduction on last year’s figure of 67.1%.

An IRS survey earlier this year found that although most employers regard EAPs as relatively cost-effective and satisfactory, the low level of take-up is sometimes a concern. Most employers providing such a service used an external organisation to deliver it (88.9%).

The third most popular health benefit provision was permanent health insurance (PHI), which provides continuing income for staff when ill health prevents them from working in their usual occupation. This was offered by 39.2% of employers. However, a survey by consultancy Aon found that PHI was rated the most desirable benefit by employees.

The most common proportion of income paid out by PHI schemes was 75% of basic salary, which was the case at 53.7% of the organisations that provided data on their insurance schemes.

The survey also found that health-related benefits focusing on alternative therapies, exercise and nutrition were becoming increasingly popular.

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