Cash plans are becoming more and more popular with our clients. They are an excellent way of keeping claims down and thereby reducing premiums at renewal. Employees can claim for out-patient treatment on the cash plan reverting to their Private Health Insurance once they have reached their limit or if they need in patient treatment.

A health cash plan can help employees to stay healthy every day by providing access to valuable services and cash benefits towards the cost of their routine healthcare.

Employees can claim money back towards essential health costs such as eyecare, dental treatment, physiotherapy, diagnostic consultations and much more! They also have access to quality health and wellbeing services to complement the cash benefits.

And whilst their employees enjoy the benefits, your clients can enjoy the rewards. Introducing a health cash plan could help them to:

• Reduce absenteeism and related costs
• Recruit and retain staff
• Improve staff morale, motivation and productivity
• Lower the risk of musculoskeletal litigation in conjunction with a robust stress policy and line manager training
• Play an integral part of your clients’ health and safety policy
• Provide a valuable employee benefit package
• Encourage pro-active employee healthcare

Health cash plans are:
• Simple and reliable
• Affordable and alternative healthcare options that can complement PMI
• Easy to introduce and administer
• Cost may be offset against corporation tax

2011 Autumn launch summary

By David Priestley

All of us are faced with some complex challenges in our efforts to build successful businesses and a successful PMI market. The pending NHS reforms help our cause as serious concerns emerge about future provision among consumers and employers. Despite budget pressures, there also continues to be an increasing importance placed on health and wellness across the spectrum. So why are we seeing customers leave the market and why are we failing to attract new customers in large numbers?

Albert Einstein famously defined insanity as “doing the same thing over and over again and expecting different results”. Maybe it’s time to try something different if we are to turn things around and start generating some growth in the market? Certainly, we shouldn’t just sit back and wait for the economy to pick up. With all that’s going on globally and in particular in the European economies, we should plan for a prolonged period of slow growth.

We think it is good to try something different..
This backdrop lends more weight than ever to PruHealth’s strategy. We feel passionately that to hang on to the customers we have fought hard to secure, and to attract new customers into the market, all PMI customers need to see much more value in the product they are purchasing. What better way to do this than to tap into the huge demand for healthy lifestyles and in a way that provides incredible financial benefits along with the peace of mind that PMI has always offered.

We do this through our impressive wellness programme..
That’s why Vitality is so important not just to PruHealth, but to the market as a whole. I think it’s fair to say that we have shrugged off the cynicism and competitor criticism suggesting that Vitality is a marketing gimmick. Not only are we able to demonstrate the impact Vitality can have on lifestyle choices and health risk cost through highly regarded academic research and numerous expert assessments, but most other PMI providers have begun to follow our lead. As Discovery has expended its global footprint and increased the sophistication and scientific understanding of wellness, Vitality has become recognised as the worlds leading incentive based wellness programme.

We now have even more product and Vitality enhancements..
As we begin the roll-out of our powerful new product and Vitality enhancements, the benefits and the broad appeal are impossible to ignore. We believe that we are creating a new category of PMI. One that can help us all to achieve improved customer retention, and the growth in our businesses and market that we strive for. Our high quality PMI remains at the heart of what PruHealth offers, but much more than that, we help our members understand their health, make it easier and cheaper for them to get healthy, and motivate and reward them with cash and incredible discounts from a range of leading leisure, travel and communication brands. In short, every single PruHealth member will be able to benefit from real tangible value every year, irrespective of whether they need to claim or not.

Insurers need to do more to ensure that private medical insurance (PMI) remains affordable as clients get older and the NHS struggles to meet their needs, according to intermediaries and insurers.

Advisers have told Health Insurance that more could be done to help people fund private healthcare into their 60s, when they are more likely to need hospital care.

“We need constant innovation to invigorate the market,” said Debbie Kleiner-Gaines, managing director of Best Health UK. “We need to create reasons for people to talk to advisers and stimulate the medically insured to be inquisitive.”

Nick Jones, brand and marketing manager at Exeter Family Friendly, agreed.

“We need to put in place more flexible solutions that work with and complement the NHS, but also do so affordably,” he said. “Improving medical treatment and developments in expensive drugs has put pressure on PMI premiums. We need to find solutions to this by helping break cover down, so older customer can select what’s important to them; but not at the expense of clarity.”

NHS concerns

A “large proportion” of Kleiner Gaines’ clients are over the age of 60 and she suggested that they were motivated to take out PMI due to concerns about the level of care they might receive in the NHS.

“This is mainly due to the fact that they have had enough life experience to know of friends that have had terrible treatment and waited for treatment,” she said.

Damning reports exposing poor standards of elderly care in the NHS have hit the headlines in recent months. An investigation by the Care Quality Commission uncovered a culture that “allowed unacceptable care to become the norm, where it should have been an exception”.

Brian Walters of Cheltenham-based intermediary Regency Health, reports that half of his clients are aged over 60 and often cite concerns about hospital-acquired infections (HAIs) and the possibility of shared wards in the NHS.

“We have seen a recent trend for older people entering or returning to the PMI market citing concerns about the NHS, but these concerns tend to be expressed in vague terms,” he said.

Although rates of HAIs have fallen to a record low, the elderly are more at risk. Most cases of MRSA and C.difficile are reported in patients aged over 75. The NHS has also made progress on eliminating mixed-sex accommodation, although patients may still stay on mixed-wards.

Policy design

While various tools can be used to reduce the cost of PMI, advisers warn that not all are appropriate for older age groups. Walters believes that premiums contingent on high no-claims discounts are “particularly unsuitable” for older clients because “they are more likely to claim in successive years and are more susceptible to getting ‘locked in’ to a single insurer”.

Exeter Family Friendly’s Jones also questioned the relevance of no-claims discounts, particularly for older clients.

“They can act as a disincentive to claim at the best of times, but at this age an early savings could soon be rendered useless for people over 60,” he said. “Choosing a provider with a good reputation for providing an empathetic and personal service is also important and may be increasingly so for older customers, who are more used to a personal service and indeed demand it.”

Our approach at the moment is to make hay while the sun shines. This seems to be received very well by our clients who are all trying to make savings but we just hope we are not making our lives difficult for 2012 renewals being compared to the excellent rates we are getting in 2011.

One client this week was offered renewal terms of £80,000. We conducted a full review and a large insurer were offering a £72k quote. We then went back to the existing insurer with this who agreed to price match. We went back to the competing insurer who then reduced the price once more to £64k, so still maintaining a £8k saving for the client. They also ‘chucked in’ dental and optical cover. I cant really advise the client to ignore this £8k saving when they can switch on a no worse terms basis to a reputable insurer offering them better cover for fear of what might happen in 2012!

Oh, the dillemas of a Medical Insurance Broker. Things may change next week as insurers budgets dictate these discounts after all. We are enjoying being able to offer our clients such good deals that are almost too good to be true.

Pruhealth state clearly that all psychiatric claims are managed on a case-by-case basis and on their new plan clients can choose cover up to £15,000 or £20,000 for each plan year for in-patient.

Bupa on the other hand will offer options on their Select plan which will give 45 days in patient cover with out-patient cover taken from within whichever out-patient limit they have.

It takes a good old dig around in their policy wordings to get to the bottom of how a mental health claim would be treated.

I called both of their mental health teams with this real scenario:-

My client suffered post traumatic stress due to an incident but had previously been of excellent mental health. He was refered to a psychiatrist by his private GP. He called Pruhealth and the claims team were trying to suggest that he couldnt go to that psychiatrist but should have 6 sessions with a psycho-analyst. The client became very distressed because, of course, he was in a very frail state of mental Health (the clue is in the claim!) and in the end his elderly father took the call over. He was of course angry with the claims department and eventually put the phone down on them as they refused to put him through to a manager. Pruhealth called him straight back and a Manager quite promptly offered to pay for the referal to a psychiatrist.

From my clients point of view, he was angry as he didnt feel his son was treated fairly and he felt that the insurer was trying to get out of paying! As an independant party, I can understand that insurers have to cost contain and will have their stringent processes to follow in order to authorise a claim. I wonder (and have asked them) how the claims team are directed to deal with people in a poor state of mental health and if they should be dealt with by a specific department.

The client responded by asking me to switch him back to BUPA as he felt sure that BUPA wouldnt treat him like this. However, I find it very hard to give my client the re-assurance he needs as although the policy wording indicates this would be covered, what is to stop BUPA or any insurer from directing their claims team into persuading the client to take a “cheaper” route?

Bupa’s mental health team were very helpful and explained that in this case study (above), they would have authorised my client to see the psychiatrist and not tried to persuade him to see a psycho-analyst. They used to request that the client saw a psychiatrist to manage any therapy but now will refer on the GPs recommendation directly to see a therapist if that is what was required.

The lesson from this? Well it is for Intermediaries really, read the policy wordings and make sure you understand the intricacies of major elements such as cancer cover and psychiatric treatment. This sort of claim is so emotive.

It is of course natural that patients that have to wait on the NHS for treatment will consider paying for their own care privately. Private Medical Insurance would not cover pre-existing conditions so once someone experiences an NHS wait for a condition, they are stuck with dipping into their own pocket!

The Chief Executive of the NHS Partners Network confirmed in the article that “We are certainly picking up that some patients are being asked to wait longer than they would have expected and are therefore deciding to pay for themselves rather than wait.”

The Healthcare Industry Barometer 2011 was published today highlights the fact that this upturn is a boost for a UK private health market which that was hit hard by the downturn in 2008.

The Guardian reports that “The current lack of optimism in the healthcare industry is seen by some as a natural consequence of high expectations for rapid reform a year ago being dashed by current political uncertainty,” said Warren Taylor, head of healthcare at Nabarro.

“However, for those taking a longer term view, there’s much to merit cautious optimism. The direction of NHS reforms under the coalition remains positive for the sector.”

Recent statistics from the Department of Health show that 9,939 people still on an NHS waiting list in July having been referred for treatment more than 52 weeks earlier. In total, 2.6 million are still waiting for operations.

There were 300,000 patients seen in July but over 28,000 had waited beyond the target which was an increase of 34% from July 2010.

One can only suggest that the demand for people to take their concerns into their own hands and search the market for private health insurance.

We really do need to move away from the old fashioned view held by some IFAs/Advisors that Private Medical Insurance is expensive. It might have been in the days when they only had BUPA to choose from! But now, there is so much choice and premiums can be affordable for most.

At Best Health, we are seeing an increased demand from customers that have never had specialist medical insurance advice before. Our new clients are astonished that they had been paying such high premiums all these years unnecessarily.

We have already met some amazing candidates but anyone that runs their own business knows how difficult it is to find the right fit for their organisation.

There is so much to consider. Will they fit in with the team? Will my clients like them? How will they come across over the phone? Have they made their CV look better than it really is?

Something that has really helped me more than I ever imagined was paying an HR Consultant (Alli Hooton -3103HR) to help me re-write my Job Description so that it made more sense to the candidate. Whatsmore, the new layout made it easier to manage their KPIs (Key Performance Indicators) so they can see how they will be monitored in the role.

Health Insurance is a topic that most people dont plan to go into from School. Like many people in Financial Services, we fall into the role, hopefully having had a great but perhaps non-vocational, education!

I dont often ask for a new recruit to have experience in the subject as I can train anybody, given enough time.

Ah, there is the catch! Enough time? There is not enough time. Are there any Managing Directors out there that feel they do have enough time I wonder?

Employees are starting to get disillusioned with PMI. But quality advice can solve many of their problems says Debbie Kleiner-Gaines, AMII executive committee treasurer and MD of Best Health UK

These days more and more employees rate private medical insurance (PMI) as one of their most valued employee benefits. A prompt return to work coupled with minimum disruption makes PMI a good choice for the employer as well.

But whilst employees might be grateful for PMI, a Mercer report in November 2010 highlighted that they still lack understanding generally about their benefit rewards and are unsatisfied with the communication they receive about them.

I have experienced such dissatisfaction amongst some employees who have seen their PMI premiums increase due to high claims from their colleagues. I recently took over a scheme referred by a general insurance broker that had been serviced by them for eight years. The client offered PMI to 20 management level staff but two employees’ dependants had very high claims for cancer. At renewal, the scheme premiums increased by 50 per cent and then again by the same amount the next year.

The employer was unable to leave the existing insurer due to the two dependants’ continuation of cover. This resulted in the employees becoming disillusioned with the cover and questioning whether it was worth the 40 per cent tax they were paying on the very high premiums.

Eventually 18 employees left the scheme leaving just the two high claiming members on cover.

The general insurance broker concerned had suggested setting up a second scheme, leaving the two high claimers with their existing high cost insurer. Most insurers frown upon this practice and a statement from Aviva in the subject reads: “This is not a practice that we condone.

However, if this situation did happen, as the remaining members would be experience-rated they would incur appropriate increases at renewal to cover the risk the scheme presents with the reduced membership”.

Many intermediaries use this “splitting” approach as standard practice. But most group administrators don’t like the idea of running two schemes.

“Many issues where employees are disillusioned can be resolved if the scheme is looked after by a specialist medical insurance intermediary”

And here’s another example of dissatisfaction relating to additional costs due to tax. PMI is the second largest benefit in kind by value.
Company-paid PMI is taxed in three ways insurance premium tax, employer’s class 1A National Insurance and a benefit-in-kind P11D charge on the employee at their marginal rate of tax. A professional dancer requiring hip surgery for an injury sustained during a performance will have no tax charge, whereas a sales director who is off work for several weeks with an injury sustained during a dance class would result in a tax charge if her employer pays for private treatment to get her back sooner. For some types of treatment this could result in a P11D tax bill for the employee of many thousands of pounds.

Recently I’ve taken over a few schemes from a non-specialist broker where the client had no understanding of how claims would affect their premiums at renewal. They had also made some odd decisions about having an excess, where the employee pays it and claims it back from the company. There are tax implications on that rebated excess that employees would not be happy about.

Some employers seem to be changing their thinking in relation to PMI as a benefit. Some are looking at cash plans as an option to run in tandem with an inpatient only PMI scheme. But this can be complicated and would therefore require input from a specialist. So, what are the solutions to this dissatisfaction? How do we keep the SME PMI market buoyant while faced with these sorts of issues?

Luckily, many issues where employees are disillusioned can be resolved if the scheme is looked after by a specialist medical insurance intermediary. They would usually offer to present the scheme to staff at each renewal, bringing in the insurer to summarise the cover while the specialist intermediary and insurer would together explain the scheme in laymans terms.

And when it comes to tax, although most intermediaries will not formally answer tax questions relating to PMI and will always refer their client to their accountant, they are well versed in the tax implications of offering PMI to employees. But advice such as whether to offer an excess on a policy should be taken, especially if an employer is considering refunding this to staff.

Clients, whether small employers or HR directors in larger firms face many challenges in providing for staff and keeping the business going. Rising premiums that they don’t understand that can be avoided are irritants they don’t need. Areas like these are where specialists can add real value.

The cancer rate in middle-aged men and women has increased by almost 20 per cent in a generation, according to new figures released today by Cancer Research UK.

Among women in their forties and fifties cancer rates have risen by more than 25 per cent.

In 1979 44,000 people, aged 40-59, were diagnosed with cancer in Britain but the latest figures for 2008 show almost 61,000 people in the same age group have been struck by the disease. The cancer incidence rates in this age group have increased from 329 per 100,000 to 388 per 100,000.

The increase can partly be explained by the fact that more cancers are being detected by the NHS breast screening programme and the PSA test for prostate cancer.

Prostate cancer is the fastest rising cancer in middle-aged men, with rates increasing sixfold from 7.7 per 100,000 40-59 year old men in 1979 to 51.0 per 100,000 in 2008. However, lung cancer rates in men have fallen by about 60% in the same period, due to a reduction in smoking.

Breast cancer rates in middle-aged women have increased by around 60 per cent since the late 70s. This is partly due to the introduction of a national screening programme but also due to changes in women’s lifestyles, such as the use of the contraceptive pill, changes in weight and increased alcohol consumption.

Among both men and women malignant melanoma is also a fast rising cancer.

Cancer Research UK is also reporting that the number of people surviving cancer is better than even before, with figures showing that survival has doubled since the 70s to almost 50 per cent.

Cancer is the leading cause of critical illness insurance claims. Legal & General reports that the average age of a claimant is 44.