Group Health Insurance
Protecting your company's most important asset...
Private Health Insurance pays for healthcare treatment in private medical facilities. The scope of the cover provided can vary considerably depending on the options selected.
Most plans will cover inpatient treatment in full which means that your employees would be covered for treatment, testing and consultations where a hospital bed is required either overnight or just for the day.
In order to be covered for initial consultations and diagnostic testing where a hospital bed is not required then some level of outpatient cover will need to be selected. This is recommended to avoid NHS outpatient waiting lists.
How does Group Medical Insurance work?
The level of cover and type of treatment required will determine the exact process but the main variation depends on whether the policy includes outpatient cover.
No Outpatient Cover
With Outpatient Cover
Naturally, holding a policy with no outpatient cover does run the risk of an employee having to go through the NHS outpatient waiting list for testing and initial consultations.
Although the level of outpatient cover makes a sizable difference to the premiums it does ensure that the initial consultations and testing can be done privately.
Tip: It is very common for organisations to include at least some level of outpatient cover as it allows the speediest access to diagnosis and treatment.
It is common for plans to cover therapies up to the outpatient limit with GP referred therapies being an additional option with some providers.
Tip: Some organisations place a small excess on the policy (such as £100) which the employee would have to pay themselves to discourage frivolous claims.
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The Fact Find:
Whether for a small firm or a large corporate scheme it is a product which can really pay dividends ensuring you minimise the days of absence an employee may have waiting for treatment in turn minimising the cost of sick days per employee.
According to research by the CIPD in 2009, employee absence is a significant or very significant cost to 80% of businesses with the survey revealing that on average sickness costs employers £692 per employee every year.
The main causes of short-term absence are minor illnesses such as colds and flu, stress and musculoskeletal conditions. The main causes of long-term absence are acute medical conditions, stress and mental health conditions and musculoskeletal conditions and back pain.
Most insurers offer products that will cover inpatient treatment where you have to stay in hospital overnight or longer and day-patient treatment where you'll need to spend some time recovering, but not overnight. More comprehensive cover will also cover outpatient treatment including pre and post-treatment appointments relating to your condition.
Experts say that early intervention to treat both mental health and musculoskeletal conditions is key to maximising the likelihood of an individual's safe and speedy return to being fit for work. Group health cover ensures that employees suffering with acute medical conditions can be diagnosed and receive treatment as quickly as possible.
There are a variety of options to choose from when deciding upon the right health insurance plan for your organisation, generally speaking cover can be defined as either basic, mid-range or comprehensive.
A very basic plan will cover inpatient treatment only, as you increase the level of cover on a plan so the level of outpatient cover increases.
There are options available to vary the cover including covering 50% of the employee's salary and allowing them to buy up to 75% or providing varying levels of cover for different grades of employees within the organisation.
Where a basic plan will limit cover to inpatient treatment a mid range plan will provide a level of outpatient cover which will be restricted by a monetary cap often set at £1,000 pounds.
The most comprehensive group private medical insurance will cover both inpatient and outpatient treatment in full. In addition many other benefits are provided including a level of overseas cover, home nursing and some even cover GP services.
As with anything it is a case of you get what you pay for. The more comprehensive the cover the more likely a claim will be made and thus the more expensive the monthly premiums.
There are a range of personal and cover factors which affect the cost of the premiums which we will discuss in more detail below, it is important to understand the the various options available so you can ensure affordable group health insurance rates.
Age is one of a number of personal factors, which affect the premiums of your company's medical insurance policy. We are all too familiar with aging and the growing aches and pains we suffer. Thus it should come as no surprise that the older the average age of your workforce the more expensive your group medical plan premiums due to the increased likelihood of claims.
Statistics have shown that although the average life span of females is longer, females tend to suffer more illnesses throughout their life time.
Due to these statistics some insurers still price male and females slightly differently, as such if you have a high ratio of female employees your premiums are likely to be higher than a company with a higher proportion of male employees.
The location of your workforce can affect your premiums with some areas tending to have higher claims ratios then others which has naturally led to insurers inflating premiums on these locations.
There are a number of factors which effect your schemes premiums which cannot be controlled, such as employee demographic. However we do have at our disposal a range of other plan options which we can alter keep the premiums in check.
Level of outpatient cover
Group medical insurance is designed around inpatient cover as your increase the level of outpatient cover so you increase the premiums.
Outpatient treatment includes consultations and diagnostic tests and thus tends to be the area, which results in most claims.
An excess is the option to have employees pay a set amount per year or per claim towards any treatment they may receive.
By including an excess and having the employees pay for a proportion of the treatment reduces the risk of them making futile claims and thus the insurers reward you with cheaper group insurance premiums.
Psychiatric cover is an additional option that can be chosen on most plans, it can provide both inpatient and outpatient treatment for many forms of mental illness and behavioral disorders often covering up to 45 days of treatment per policy year.
An option which provides cover for alternative treatments, these treatments include acupuncture. homeopathy and osteopathy. Some individuals swear by these complementary medicines others do not give them the time of day so it is important to weigh up whether you feel the added cost is deserved of the cover.
Six week wait option
If the NHS waiting time is longer than six weeks, your employees can access private treatment straight away. Although this limits the cover provided large savings can be made on your monthly premium.
Full Medical Underwriting
Employees provide their full medical history on application and insurers may exclude cover for pre-existing conditions but will tell the employee what is excluded before the policy commences.
Switch or Continuing Personal Medical Exclusions
If you are looking to review an existing scheme you can often move to a new insurer on "switch/CPME" terms. The insurance company will continue to cover conditions that arose for any of the employees covered since the existing plan commenced.
Medical History Disregarded
Such a plan removes a lot of the administration as there is no need for employees to declare their medical history. An MHD plan tends to require at least 20 employees and is going to incur higher premiums due to the additional risk the insurer is accepting.
Should you require further information or guidance on implementing a new group scheme or reviewing existing arrangements then please do not hesitate to get in touch, we are here to help. Some of the most commonly asked questions can be found in our questions and answers section, if you cannot find what you are looking for then ask the question yourself and we will do our best to answer.
10/01/2015 N Tanner
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