1 What cover do you need?
Most cover will include access to high-cost London hospitals, which can hike up costs. If you’re not based anywhere near the capital there is no point having this as an option on the policy, so remove it. Equally, if your employees are not travelling abroad they will not need worldwide cover, so ensure this is not part of the package.
2 Shop around
According to Charles Cotton, rewards adviser at the Chartered Institute of Personnel and Development, employers should shop around on a regular basis to get the best deal “either if they are providing PMI directly or through a voluntary benefit package where the employee purchases the benefit themselves through their salary”.
3 Limitations
Impose limitations on the choice of hospital by opting for the use of an insurer’s approved hospital network.
4 Exclude pre-existing medical conditions
Ashcroft says: “An employer could introduce medical underwriting where pre-existing conditions are excluded to manage risk.”
5 Eligibility
Will the insurance cover just the individual (single), or include married or family cover? Single, individual cover will be a cheaper option.
6 Reduce the coverage of the scheme
Directors might be entitled to full cover, but does this have to apply to all staff members? Probably not. Owen Warnock, partner at Eversheds, explains: “Pay and benefits tend to get better for more senior people, so this is just an aspect of the question ‘is there discrimination in paying more to senior staff?'” The answer to that is: not on the face of things, but there are many organisations where some groups of employees (eg women, ethnic minorities, gay people) may think there is prejudice against promoting them to high levels and if they can prove it then they have a claim for discrimination – and the loss would be the difference in pay and benefits.”
7 Excess
Ask employees to pay an excess if they make a claim. If this already exists, increase the existing excess. Plans with high excess such as £500 or £1000 can reduce costs.
8 Get the employee to pay for their cover
Alternatively, the employer can negotiate a discount with a PMI provider and ask the employee to pay the costs via their salary.
9 NHS services
Introduce a requirement that NHS services be used instead of private healthcare unless the waiting time is longer than a specified period. Employers looking for a budget plan can link their schemes to waiting lists in the NHS with six and 12 week plans. The insurer can give a discount for this.
10 Limit cover
Reduce or abolish cover for certain medical conditions.
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