The world of private medical insurance has changed very little in the last 10 years. Meanwhile, the worlds of health and work have changed significantly. As we move from pandemic to endemic, the world of work has changed forever. Employee benefits and services need to change to catch up, too.
For us, the new frontier for private company health insurance is going to be whole of workforce cover.
We don’t believe health insurance will stay the province of top executives in top-100 firms, with premiums running into hundreds of pounds per head. It can’t. Because British society, British businesses, and what British employees want, have all evolved – galvanised by the last two years of coronavirus.
Here are 3 of the things that have changed.
1. Health awareness
In January 2021, the UK passed the awful milestone of more than 150,000 Covid-19 deaths. A further 1.2 million people are also thought to be living with long Covid. Millions more have been infected or touched by loss and grief.
There is probably no point at any time in the last century that health has been higher on the agenda for so many people.
In the UK we’ve been incredibly lucky to have a national healthcare system that’s stepped up to help treat, support and vaccinate us. But there’s no doubt the last two years has come at a cost to the service itself. The backlog of postponed appointments, checks and operations is huge, and it is estimated that 14 million people could be on NHS waiting lists by next Autumn.
The fact 1 in 9 people are waiting to be seen by a specialist not only has an impact on the individuals involved, but on workplaces that rely on them, too.
Bob in transport might have got his non-urgent knee operation and follow-up physiotherapy on the NHS within weeks several years ago, now he could be waiting months – and that’s going to impact his ability to work.
More people off work for longer as they await treatment is a brewing problem for businesses. Some estimates of the cost of ill-health on UK PLC, even before the pandemic, run up to £92 billion a year. Since 2020, sickness absence may have gone down overall, but is still significant – and likely to escalate as people return to workplaces en masse. Coronavirus accounted for 14% of sickness absences in 2020, just behind minor illnesses, musculoskeletal problems, and mental health issues. All of which means keeping people well – and working - makes more sound business sense now than ever.
Post pandemic, businesses are also more aware than ever of their vulnerability, and the impact of staff absences on operational continuity – whether they’re from the boardroom or the shop floor. It isn’t enough to cover the c-suite, businesses have found to their cost that the people actually turning the wheels, driving the vans, and fulfilling the service/products are vital.
And it’s not only about sickness absence, either. There’s also increasing recognition in the business community that caring companies actually get more from their staff.
In April 2021, the ABI reported that 60% of SMEs now acknowledge that providing health and wellbeing benefits has a high impact on supporting the productivity of their company. This increases to 69% for medium size businesses, with 22% rating health and wellbeing benefits as being critical for ensuring high productivity.
As a result of Covid-19, workplaces have changed. There was furlough, remote working, new health and safety requirements to be met – and new levels and measures of support implemented for wellbeing and mental health.
Perhaps what changed the most, though, was people’s expectations of their employers. Flexible working, understanding over sick leave and quarantine periods, mental health support and things like support on childcare and home schooling became the fronts on which organisations’ coronavirus responses were evaluated, by staff, customers, stakeholders and media. Not meeting these ‘new’ standards has become culturally unacceptable, particularly in large corporations.
All the hard-won gains by employees over the last two years are unlikely to completely reverse as the virus recedes. Nearly one quarter of businesses, for instance, have said they expect some form of home working to now continue, giving people the flexibility that consistently comes top of benefits wish-lists.
Even before the pandemic, demand for workplace benefits in general was on the rise. In fact in 2019 two-thirds of Brits said that benefit packages were equally or even more important to them than base salary. And 43% cited health benefits as amongst the most important to them.
Employee Benefits magazine recently talked to a series of experts, who predicted that 2022 would be the year that sees employers dismantle and reassemble their benefits packages to meet the new needs and demands of the workplace post-virus. It’s a prediction echoed by the CIPD, too. They found in February 2021 that despite all the financial hardship wrought by the pandemic, benefit spending stayed relatively stable. Only 8% of cross-sector employers were spending less on benefits, and 9% had chosen to start spending more.
3. The job market
Inevitably, the pandemic in combination with Brexit has changed the job market across most sectors. After a period of instability, job vacancies are at a 20 year high, reaching 1.17 million – and making it a job seeker’s market.
Employees are now calling the shots, with 2.2 million people starting a new job between July and September 2021. That makes it more important than ever for businesses to retain staff and attract the best talent. It’s not just about salary and pension now, but about culture. To keep and get great people businesses are having to rethink their values, and their relationship with employees. Benefits have gained new traction as a motivational tool for workers of any tenure, and at any level - and money IS being found to fund them.
Some businesses have made savings during the pandemic. 26% of businesses for instance, now plan to close or downsize their offices, creating rent and utility savings. With less people doing less moving around there’s also savings to be made on travel and travel expenses, hospitality expenses, and team-building and bonding expenses. If less people are in less offices that’s less office fruit baskets or take-away pizzas on a Friday…
And all of that is ‘benefits’ cash that’s ready and waiting to be used elsewhere.
In terms of Equipsme’s entry-level plan, a team of 100 could get cover including 24/7 GP appointments, physiotherapy and health checks and add on access to a stress support line for just over £10k a year. For just over £37.5k a year the entire team could have access to private diagnosis and treatment from a UK-wide network of hospitals, allowing businesses to reap the rewards of more engaged staff, who in turn have the resources to get better, quicker.
Equipsme plans have been designed with one price for all ages 16-69 - and a simple 3 year pre-existing conditions exclusion. They also let individuals pay to upgrade their own cover and add on family members. We spotted this gap in the market for flexible and affordable company health care back in 2017. We didn’t, of course, spot the pandemic coming. And we could not have predicted that it would spark a staff wellbeing revolution… But there has been a perfect storm of circumstances that have very much changed the narrative around company health insurance plans - and the role employers want and need to take in keeping their people and their business fighting fit.
Insurance has always needed to change with the times. And times really have changed.