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  • Writer's pictureAlexander Beard

Why a health cash plan could be a good alternative benefit to private health insurance for your business

Employee benefits can be the difference between attracting and retaining top talent and struggling to fill positions.

There are many types of workplace benefits you can offer your employees – you can read about some of them in our previous article on the subject. Yet healthcare benefits can be particularly useful to employers and employees alike.

Employees are able to access paid-for or subsidised private healthcare, which could mean they avoid a lengthy wait on a public healthcare waiting list. Meanwhile, employers benefit from maintaining a healthier, happier, and more productive workforce.

However, a quick quote from a provider regarding private health insurance may be enough to put you off investing in healthcare policies for your business. Before you disregard the idea altogether, you could consider exploring a health cash plan for your employees.

Read on to discover why a health cash plan could be a good alternative benefit to private health insurance.

Demand for private healthcare is rising in several countries and is at record levels in the UK

Private insurance policies and self-funded individual treatments in the private healthcare system have rocketed since the pandemic.

For example, in the UK, the Guardian reports that Aviva – Britain’s biggest general insurer – recorded a 41% increase in the sale of health insurance policies in 2023 compared with the previous year.

Furthermore, a report in the Mail Online found there were 898,000 admissions to private hospitals in 2023, more than any year since records began. This represented a 7% increase from 2022, when the figure stood at 836,000, which was also a previous record.

The pandemic created a backlog in the system and NHS waiting lists are the primary reason for the surge in demand for private healthcare in the UK.

In October 2023, the BBC wrote that NHS waiting lists hit a new high, with a record 7.75 million people waiting for planned treatment. That figure includes nearly 9,000 people who had been waiting more than 18 months.

This trend is not the preserve of the UK.

The Irish Times reports that nearly half (47.6%) of the population of Ireland had health insurance in 2022, a 3% increase from the previous year.

And the Associated Press notes that a quarter of the Spanish population had health insurance in 2022, spending 7% more in total than they did in 2021.

With more and more people opting for private health options, offering a healthcare package as an employee benefit could be an effective way of attracting and retaining talent.

A health cash plan can be an affordable alternative to private health insurance

Although private health policies are becoming more popular, or more necessary, the costs can still be considerable and may deter some people from opting in.

Research from iam INSURED shows that the average cost for individual private health insurance from the five biggest providers in the UK is £721.08 a year.

It is important to note that this figure can vary significantly depending on your age, health, location, and other factors.

Furthermore, Unbiased reports that private health insurance for businesses can cost anywhere between £250 and £1,000 a year for each employee.

In comparison, Employee Benefits writes that the market average for a business health cash plan is £100 a year for each employee.

A health cash plan for employees is typically the most affordable private healthcare option. And, though it may not have the same level of cover as private insurance, it could offer many of the same benefits.

A health cash plan can cover a range of everyday healthcare costs

A health cash plan allows employees to claim back expenses of everyday healthcare costs.

As the business owner, you pay a monthly premium to the provider based on the number of employees you’re covering and the level of cover.

Your employees then pay for their medical appointments and subsequently claim back some or all of the cost from the provider, depending on what your policy includes.

The cover offered by health cash plans varies depending on the policy package but can include everyday treatments, including:

  • Optical care

  • Dental care

  • Physiotherapy

  • GP helplines

  • Mental health support.

You can also tailor the policy to include diagnostics, such as MRI scans and X-rays.

As well as leading to overall improvements in the health of a workforce, health cash plans can contribute towards increased productivity, higher retention rates, and fewer absences.

The flexibility and affordability of health cash plans make them an attractive benefit for many employers. And, with quick access to healthcare at a minimum cost, employees are likely to appreciate their value as well.

Get in touch

To speak to one of our workplace benefits professionals and find out how a health cash plan could help your business, get in touch.

Email or call us at +44 (0)151 346 5460.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.


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