Employee medical insurance: Why is health insurance important?
With so many flashy, new types of wellness benefits on the rise in the industry, it can be easy to forget about the more common perks like employee medical insurance. Employer provided health coverage has become the standard foundation benefit for the platform of many companies. It could even be true that younger generations won’t even know what it’s like to work for an employer that doesn’t offer a medical plan. They might even ask “Why is health insurance important?” in lieu of company-sponsored gym memberships or work from home days.
This week, Pacific Prime is refocusing the employee benefits discussion on the importance of employee medical insurance, and what you can tell new prospects that aren’t aware of why they need it.
What exactly is employee medical insurance?
Offering health insurance as an employee benefit is generally one of the simplest but most effective steps you can take to reward and attract talent. Health benefits can also deliver a range of benefits, such as increasing productivity, boosting morale, and helping shape a positive company culture. There’s a wide range of options available to businesses looking to provide employee medical insurance but, generally, group health benefits will usually come in the form of:
- Basic health benefits: Outpatient and inpatient care, coverage for dependents, international/regional coverage, inclusion of pre-existing conditions.
- Popular additional benefits: Maternity and fertility coverage, vision and dental insurance.
- Extended/comprehensive benefits: Health checks and immunizations, general wellness, and mental health support.
The main point of a medical insurance plan for employees is to protect and support the health and wellbeing of staff so they can remain active and productive members of your company. Other perks, like financial support or education benefits, are useful but employee medical insurance is often the most common addition to salary offered around the world.
Why is healthcare so popular as an employee benefit?
The short answer is: healthcare is really expensive. Countries like the United States spend about USD 3.5 trillion each year on healthcare expenses – a rate that is 12,300% higher than what it was in 1960. It’s the same around the world; even low cost countries like Thailand have found keeping costs low whilst boosting quality a challenge. People around the world are increasingly looking to insurance to help give them peace of mind should they find themselves ill or injured.
As such, it’s little wonder that securing health insurance through an employer is so highly valued by employees. A Clutch survey indicated that a whopping 73% of employees received benefits of some kind from their employer, and 55% of those people said health coverage was the most important in terms of job satisfaction. Millennials were more likely to choose vacation time and overtime perks over health, but they’re currently the generation who are likely to need it the most.
Asking “Why is health insurance important as an employee benefit?” would have been a fair question one generation ago. But, as the workforce has developed and people are no longer willing to accept a poor work-life balance, the majority of companies now understand that it’s not just “nice to have” a group health insurance plan for their staff – it’s necessary.
Do I really need to offer employee medical insurance?
We completely understand that not every business is quite ready to be offering employee benefits to their staff. Even if you are, you might be considering other forms of benefits that might be more attractive than simply a group health insurance plan. To help you understand the benefits of why health insurance is important, here are our top five reasons for choosing medical perks:
1. It’s simple
There are so many employee benefits providers that offer a range of health insurance solutions for companies of any size, in any industry. The market is so large that there is also an abundance of intermediaries, like agents and brokers, that are available to help your company through every step of the process. Some plans are simple and can be up and running in no time. For more complex platforms, expert advisors are never far away to lend a helping hand.
2. It can help boost productivity
According to a MetLife study, 60% of employers found that health benefits helped their staff become more productive. Healthy people are able to accomplish much more in their time at work, and are less prone to burnout in the workplace. Preventative medical solutions can amplify the benefits where staff are aware and engaged with such perks, and extending cover to dependents and family can also relieve external stress.
3. Getting treatment and care can become easier
For many major insurers, payment options such as direct billing is the standard. Staff members needing treatment can find the whole process much easier to navigate when a healthcare provider and an insurance company have a good working relationship. Those insurers with great service levels can also provide assistance with finding the right doctor or facility when employees need it too.
4. Your company can increase its attractiveness to talent
Employee medical insurance has consistently been the most important benefit for a long time now. A Glassdoor study found that health insurance perks were above vacation and paid time off benefits, and pensions plans. If your company is in the market for new talent, it would be a good idea to consider what top performing people want. If it’s healthcare benefits and you don’t provide it, you might just lose them to a competitor.
5. Healthcare plans can be flexible as your company grows
Say you have a small, local business now but you’ve got grand plans for overseas expansion. Some might think you should wait until you’re big enough to offer employee medical insurance, but the truth is that group health plans are generally one-year contracts (very, very few run longer). If your company were to go through a radical transformational change in the next 12 months, it’s just a simple matter of reviewing your current benefits platform at renewal time and making the changes to match your needs.
What do I tell employees who don’t think health coverage is important?
An easy way to highlight how much of an advantage having employee medical insurance is is to tell people how much they might pay individually. For this, we have two really handy insurance industry reports available free:
- The Cost of International Health Insurance Report – 2017 that shows the average cost of a range of international plans from 100 countries around the world; and
- The International Private Medical Insurance Inflation – 2018 report that tracks the rate of premium inflation across key international health insurance markets around the world
Paying for medical costs out-of-pocket is usually out of the question for most employees, at least without taking a massive hit to any savings they might have. Securing health insurance for your employees will be cheaper than if they purchased it themselves – plus, as a group, you’ll have more control and negotiating power to ensure that the money you do spend on insurance is well spent.
Arrange a meeting to discuss how Pacific Prime can support your employee benefits
At Pacific Prime, we’re committed to simplifying insurance. Our unique Broker Framework has been developed to empower and support our clients with their employee benefits platform, and to ensure that your company is always getting the best from its insurer and plan. We offer the most extensive range of employee medical insurance solutions available globally, and can also assist with a range of non-health corporate benefits should you need it.