What benefits do I need going into 2021?
With the COVID-19 pandemic crisis showing little sign of coming to an end anytime soon, many companies that we work with are looking at the group risk and health insurances that they have in place to review their needs going forward. The discussions that we have been having are around how these benefits work with the new reward and recognition and health and wellbeing tools that they have been putting in place to support remote working.
During the final quarter of 2020 HR leaders should take the opportunity to review their benefits to ensure that they are getting value for money and that they have the right support in place to support their people in these unprecedented times. This review includes looking at the provision of benefit platforms.
The benefits industry has traditionally shaped its services to cater for large employers, developing complex flexible benefit solutions as a response in delivering reward and benefit provision. These flex solutions often require expensive IT time and resource and become long term contractual commitments.
Growth of digitisation: what does it mean?
However, with the growth of digitisation, there are now much less complex platform solutions available that offer agile, digitally enabled tools and which are easier to use as they don’t require staff selection windows. These new platforms offer employers a more cost-effective way to move forward with their reward and benefits packages. They should make employers reexamine their existing provisions and help them to shift away from managing complex flex platform solutions.
The new digital entrants offer benefit platforms that are quick and easy to set up and don’t involve complex and costly IT configurations. Importantly they provide all the engagement and communication tools that employers need as well as a full range of benefits including importantly, health and wellbeing and reward and recognition. These new entrants are quickly finding ways to improve the reach of benefit provision with UK businesses and are working to act as a bridge between the “old world” of flex platforms and the “new world” of agile simple affordable solutions.
How much should I be paying for a benefits platform?
Therefore, future reward and benefit platforms solutions business must be quick and have low costs to set up and maintain. Here I am talking about set up and running annual costs of below £30,000 a year for large national employers with staff numbers of 10,000 to 100,000, and between £2,000 to £20,000 a year for employers with 100 to 1,000 staff. The new platforms must also cater the large numbers of small businesses employing even smaller numbers of staff. Employers whatever their size, need to work with small agile benefit platform providers that embrace remote working and understand speed of delivery.
What about the insurance benefits?
The other key concern for many benefit and HR managers is the worry that switching insurance providers is fraught with risk and danger. And any move may be detrimental to their employees. The insurances that we are talking about here cover life assurance, income protection, critical illness cover, private medical insurance and cashplans.
Switching health insurers
Switching insurance cover is easier than you may think. Switching not only allows businesses to save on their premiums, but in many cases, they are able to upgrade their cover too.
Businesses whose insurance scheme structures are not proactively and regularly reviewed may have arrangements that are far from optimal in both price and quality terms. This is undoubtedly the case where catastrophe or event limits have been a first order issue for the client.
The ease with which large sums assured are provided, thanks to advances in underwriting practices at both scheme and member levels, has been continuously improved.
Free cover limits generally have increased over time. Forward underwriting bars, allowing increases in members cover without the need for further underwriting got so generous that they have almost inevitably ended up being largely superseded by once and done underwriting.
In addition, to have any hope of winning existing schemes, all insurers have to accept the underwriting decisions made by previous insurers in many cases at no worse terms. This helps to make it very easy for schemes to switch from one insurer to another. The same is true for long-term absentees. Employees who are off sick or in receipt of income protection benefits stay fully covered for their life insurance if their scheme switches.
Finally, several traps that used to lie in wait for switchers of schemes one example used to be over which insurer had responsibility for members not actively at work on the actual day a scheme switched have been made safe, largely under the auspices of Group Risk Development (Grid) industry body.
Group risk insurance is a terrific mechanism for delivering large amounts of cover to millions of employees with the minimum of paperwork and at very low cost.
Medical underwriting of senior employees (often the ones making the decisions about the insurance of their companies benefits) can be convoluted, with many individuals ending up limited to the free cover limit because the process is just too tedious to complete, but that is where Business Protection can help filled the void with products that range from Key Person Insurance, Relevant Life Insurance, to Business Life Insurance.
In terms of private medical insurance considerations should be around the flexibility of the policy terms in that does it allows the business to add or take away cover where needed. For example, psychiatric care can be added, or the choice of hospitals can be. Or if they wish to reduce the price of the premium, they can take out an excess or reduce the hospital list.
These are extremely challenging times for individuals, families, businesses and indeed whole societies and economies. The benefits industry has a key role to play in supporting customers and societies through the crisis and the recovery, as employers of all sizes embark on the digital transformation of their businesses, to become more agile, responsive, and connected enterprises.
Managing Director, Bravo Benefits
Provider of the SmartHive Platform
Smart Hive is an integrated, cost effective employee benefits platform that provides your employees with access to all their health and wellbeing benefits in one place. Talk to a member of our team today or book your very own demonstration.