Key takeaways
- Private healthcare can deliver significant, longstanding benefits: These include timelier access to treatment, reduced employee sickness, and an increase in employee productivity and retention.
- Private healthcare does have limitations: It won’t cover all conditions and isn’t suitable for meeting the needs of all employees.
- Alternative health and wellbeing benefits can provide a more tailored approach: Cancer care, fertility assistance and mental health support can target more specific employee needs.
According to a recent employee survey by Drewberry, health and critical illness insurance are in the top five employee health benefits that individuals would like their employers to provide. Around 36% of respondents would like company health insurance and 28% cite group critical illness insurance as a priority. However, only 12% of employers offer private healthcare for employees.
Given these figures, private healthcare for employees is a worthwhile consideration if you’re reviewing your existing benefits package or looking to offer employee benefits for the first time. In this article, we discuss the benefits and drawbacks of offering employees private healthcare, and also provide suggestions for alternative benefits that can support employee health and wellbeing.
What is private healthcare?
In the UK, private healthcare is separate from the NHS and encompasses any medical treatment that incurs a cost. The individual receiving care will pay this cost directly to the healthcare provider or will have insurance that covers some or all of the bill. Individuals can pay for personal private healthcare insurance. However, they can also receive this as a benefit from their employer.
Corporate private healthcare insurance is taken out by a business to cover the cost of employees’ private treatment. Employers can decide who they offer it to (so long as this decision isn’t discriminatory), the level of coverage and the excess that employees will pay if they use the insurance.
The benefits of offering employees private healthcare
Any employee benefits you implement should meet the needs and specific challenges of your people, but they must also make business sense. Offering private healthcare for employees can have significant long-term benefits for individual employees and the entire company, in the following ways:
Employees receive timelier care
Recent figures show that nearly 7.5 million NHS patients were waiting to start routine treatment at the end of May 2023, and current NHS guidelines state the maximum waiting time for non-urgent treatment is 18 weeks.
One of the main advantages of private healthcare is the significantly reduced waiting times for consultations, tests and treatments in comparison to the NHS. This timely access to healthcare can be particularly important for conditions that require immediate attention and is invaluable for those employees who would be worrying about their health while they wait for appointments.
Reduces employee sickness and absence
Private healthcare can play a crucial role in reducing employee sickness and absence rates. When employees have swift access to medical care, illnesses and health concerns can be addressed before they worsen or lead to prolonged absences. Additionally, private healthcare often includes access to health tips for employees, educational resources and health and wellness programmes. These all promote healthy lifestyles and preventive measures, further reducing the likelihood of employees falling ill.
Can cover treatments not offered by the NHS
Private healthcare plans can cover treatments, medications and therapies that might not be available or fully covered by the NHS. This expanded coverage can be particularly valuable for employees with specific health needs or conditions that require specialised care. By offering private healthcare, employers demonstrate their commitment to supporting the diverse health requirements of their workforce.
Improves employee productivity, retention and attraction
When employees have access to private healthcare benefits, it can make them feel that their employer supports them and prioritises their health and wellbeing. This, in turn, can lead to higher job satisfaction and improved employee morale. When employees know they have access to quick and comprehensive healthcare, they are less likely to worry about health issues. Consequently, their productivity increases. Employee health and productivity are also linked. Private healthcare can contribute to better overall employee health, which has a positive impact on their work performance. Moreover, offering private healthcare can be a significant factor in attracting and retaining top talent, as it enhances the overall benefits package and makes you a more appealing employer.
The drawbacks of offering employees private healthcare
When reviewing which benefits to offer employees, it’s important to have the full picture before making firm decisions. Private healthcare is great for most employees and offers a good baseline but is not without its limitations.
It’s only worthwhile if employees use it
Private healthcare can be costly for employers, which is why it’s only beneficial if employees utilise it. If employers aren’t aware of their entitlement or simply don’t need to access private care, it’ll be difficult to achieve a good return on your investment.
It doesn’t cover all conditions
While private healthcare plans often offer a broader range of treatments and services compared to the NHS, there may still be certain conditions or treatments that aren’t covered. Some private health insurance policies have exclusions for pre-existing conditions, chronic illnesses or specific medical procedures. As a result, employees may find that certain treatments they need are not covered by private healthcare benefits, leaving them to rely on the NHS or pay out-of-pocket for those services.
Hard to tailor to individual needs
Designing a private healthcare plan that perfectly caters to the diverse needs of every employee can be challenging. People have varying health requirements based on factors like age, medical history, and personal preferences. Employers may struggle to find private healthcare for employees that satisfies the individual needs of the entire workforce. This can lead to employee dissatisfaction and low uptake.
Premiums are likely to rise
The cost of private healthcare insurance tends to rise over time due to factors such as medical inflation, increased demand for medical services and advancements in medical technology. As a result, employers may face escalating premiums, which can strain their budgets. If unable to absorb the rising costs, you may find yourself needing to pass on some of the expenses to employees, reduce the extent of coverage or remove it from your employee benefits package entirely.
What are the alternatives to health insurance benefits for employees?
There are other employee wellbeing initiatives and health benefits that might provide more value to your employees and your business. Having more specific benefits that employees can choose from will ensure that they can access the type of healthcare that they need the most.
Fertility assistance
1 in 7 heterosexual couples has difficulty conceiving. However, accessing NHS fertility treatment is subject to stringent criteria and a postcode lottery. LGBTQ+ individuals also face hardship in obtaining funded assistance. The alternative is costly private treatment which many simply cannot afford. Fertility benefits can give a crucial option to employees needing assistance to expand their family.
Mental health support
An estimated 56% of employees are currently experiencing depression and 60% are experiencing anxiety, yet only 10% of employees are seeking mental health support. There are many reasons people don’t seek help, including the stigma surrounding mental health, a lack of knowledge about accessible resources and long NHS waitlists for talking therapies. Comprehensive mental health support benefits that offer a variety of options, such as counselling, app subscriptions and crisis interventions, can give employees timely access to support in a format that suits their personal situations and preferences.
Cancer care
Macmillan Cancer Support estimates that 3 million people are living with cancer in the UK and there are an additional 1.4 million cancer carers. Cancer has a significant impact on physical and mental health, even after active treatment ends. Cancer care gives anyone affected by cancer the option for on-demand support from specialists, including psychotherapists, physiotherapists and dieticians. For employees, this support can make the difference between continuing to work or not, aid recovery after treatment and give them the tools they need to navigate the emotional toll of cancer.
Perci Health is an innovative virtual cancer care clinic and creating an account is free. Find out more about how our employer programme helps to improve the quality of life for those employees living with and beyond cancer.
References
‘The 2023 Drewberry™ Employee Benefits & Workplace Satisfaction Survey’, drewberryinsurance.co.uk, July 2023, https://www.drewberryinsurance.co.uk/knowledge/research/employee-benefits-survey-2023
‘5 Reasons Businesses Should Provide Company Health Insurance’, drewberryinsurance.co.uk, July 2023, https://www.drewberryinsurance.co.uk/news/employee-benefits/why-businesses-should-provide-health-insurance
‘NHS waiting list in England hits record 7.5 million’, independent.co.uk, July 2023, https://www.independent.co.uk/news/health/nhs-england-waiting-list-record-high-b2374526.html
‘Guide to NHS waiting times in England’, nhs.uk, July 2023, https://www.nhs.uk/nhs-services/hospitals/guide-to-nhs-waiting-times-in-england/
‘Infertility’, nhs.uk, July 2023, https://www.nhs.uk/conditions/infertility/
‘Mental health statistics: 2023’, championhealth.co.uk, July 2023, https://championhealth.co.uk/insights/mental-health-statistics/
‘Cancer Carers in the UK’, macmillan.org.uk, July 2023, https://www.macmillan.org.uk/_images/cancer-carers-in-the-uk_tcm9-298126.pdf
‘Statistics fact sheet’, macmillan.org.uk, July 2023, https://www.macmillan.org.uk/dfsmedia/1a6f23537f7f4519bb0cf14c45b2a629/9468-10061/2022-cancer-statistics-factsheet