At a premium: the rising value of health cover as a benefit
As NHS waiting lists lengthen and the cost-of-living crisis precludes most Britons from paying for fast medical treatment, private health insurance is becoming a key recruitment and retention tool
It’s not only households and businesses that are worried about their heating costs this winter. An article published by the British Medical Journal in August reveals that NHS trusts are braced for “eye-watering” energy bills, which they expect to be between two and three times higher than they were in 2021.
Understandably, people are becoming increasingly concerned about how quickly they can obtain free healthcare on an under-resourced NHS that, having already experienced austerity, Brexit and Covid, now faces serious inflationary pressures.
It’s hardly surprising, then, that private health cover is becoming a highly sought-after element of employers’ benefits packages, observes Claire Harvey, MD at recruitment giant Reed.
“As a result of the pandemic, most people have realised that the NHS might not be able to treat them as quickly and effectively as they would like,” she says. “Having access to private healthcare gives them peace of mind.”
Given that the UK labour market is tighter than it has been for at least 15 years, according to the Office for National Statistics, employers are having to offer particularly attractive reward packages to recruit the people they need.
“There has been a massive shortage of skilled candidates over the past 12 months,” says Harvey, who adds that potential recruits will generally stay put “unless the employer can offer a substantial increase in their overall benefits”.
A healthy differentiator
She reports that candidates have come to rank private health cover alongside a generous occupational pension scheme as the perks that might make them change employers.
“These are probably the two big hot topics, which are closely linked,” Harvey says. “Candidates are thinking about their physical and mental wellbeing now and also about their financial wellbeing in the future. People are living longer, so they’ll need a bigger pension pot to last their retirement.”
Her views are echoed by Susie Morris, director of trust sales at Healix Health Services, which offers a flexible alternative to traditional private health insurance schemes through an HMRC-approved funding model known as a corporate healthcare trust.
She says: “Healthcare benefits are right up there in terms of what employees want. I think they are more attracted to companies that offer such benefits and good pensions as well, because they feel that they’ll be looked after.”
Apart from showing that many employees can work flexibly to great effect, the pandemic seems to have heightened interest in a range of health-related perks, according to Harvey.
“Cycle-to-work schemes and showers are popular, especially because numerous employers are no longer offering free car parking. Offering flexibility around people’s lifestyles is important too,” she says, adding that some employees might want the freedom at various times of the working day to visit the gym, pick up their children from school or check in on an elderly relative, for instance.
With many firms adopting hybrid working models, Reed has started advising clients to make their premises “a great place to work, so that people are actually encouraged to leave their bedrooms and come in”, Harvey reports. She notes that employers are becoming more attuned to the effects of the office setting on its occupants’ wellbeing. This is encouraging them to “create environments with a bit more space and fresh air”.
How Farfetch approaches health benefits
Luxury fashion etailer Farfetch has been taking a scientific approach to its provision of wellbeing benefits. The Anglo-Portuguese firm worked with the University of Minho in Braga to run an anonymous employee survey. This measured levels of wellbeing (general and financial), psychological safety, parental conflicts, work/life balance, burnout, anxiety and depression in the workforce.
Ana Sousa, a former university lecturer in developmental psychology, is Farfetch’s vice-president of people strategy. She explains: “The research gave us a lot of great insights. When we were asked to design a framework of wellbeing, we understood that we should focus on the emotional side, because it’s what our people said they needed more of.”
The company picked a provider called Plumm Health to offer its employees personalised mental healthcare services. “About 36% of our population are registered in Plumm and using therapy or coaching. Of those, 61% are using chat therapy,” Sousa says.
While several people will go through their entire employment with a company without having to use such services, employees still take comfort in knowing that the requisite support is there should they ever need it.
Morris notes that the NHS’s treatment backlog has reached crisis levels. “Because waiting lists are so long, some people have been going down the self-pay route for private treatment,” she says. “But, as the cost of living continues to rise, will that still be a priority for them? If they don’t have healthcare benefits, will they just wait? And, if they do wait, will things get worse, cost more and cause more pain?”
When employers are considering the health benefits they’re planning to offer, one aspect they shouldn’t overlook is the make-up of their workforce, Morris says. People in different age groups have different priorities when it comes to personal wellbeing, for instance, so the ability to tailor health packages can be valuable.
“As a 20-year-old employee, say, I might want things such as musculoskeletal cover. This should give me access to physiotherapy or surgery to fix my shoulder or knee because I’m playing a lot of sport,” she explains. “But if I’m of a certain age I might say: ‘I’m a bit concerned about things like cancer. I’ll happily pay a bit more to cover those risks, because they’re more relevant to me.’”
Morris stresses that it’s important for firms to “listen to their employees about what will be most helpful to them. If the costs of healthcare are taken care of, you’ll have employees who are far more focused at work, because they’re not worrying about such things.”
It seems that one of the best ways to take care of a business is to take care of its workforce.