Costs forcing employers to change health plans

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The majority (55%) of employers feel rising costs will force them to change medical insurance arrangements within the next three years.

Jelf Employee Benefits research showed a further 13% would make changes to private medical insurance (PMI) plans within five years.

The result is not surprising given the unexpected rise in insurance premium tax (IPT) to 9.5% this month.

However, while most (94%) employers agreed they should be promoting healthy practices and providing workplace healthcare advice, less than half (45%) were doing so.

A vast majority (94%) of the 100 respondents felt the government's current health strategy including welfare reform, the NHS, eldercare and mental health would increase pressure on employers to provide a wider range of wellbeing support.

And a majority (55%) of employers also predicated a more flexible future for employee healthcare plans in a similar style to the mixed employer and employee-funded defined contribution-style pensions.

 Jelf managing director of healthcare and group risk Iain Laws warned that informed decisions about long-term healthcare plans could easily and inadvertently be undermined by short-term pressures.

"A flexible healthcare plan, in which employers provide a more focused, core healthcare topped up by the employer or employee, is undoubtedly an appealing option for companies," Laws said.

"However, the benefits of any immediate cost saving, no matter how attractive, can create problems in the longer-term in relation to the value, attractiveness and sustainability of this important protection and productivity benefit."

"Any HR or employee benefit practitioner who has been used to managing a fully comprehensive PMI scheme will undoubtedly be feeling fairly uncomfortable right now. But with financial pressures coming, not only from within healthcare but other areas of benefits too, most companies will want to make substantial cost savings, even if that means suffering the consequences of not having access to informative data," he added.

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