Income protection companies move into employee wellness market
Individual income protection providers are now looking to move into the employee health benefit market, with British Friendly launching its Mutual Benefits earlier this year. It offers members, many of whom are self-employed, services such as access to GPs, physiotherapy, counselling, diet and lifestyle-related services. Corporate cash plan providers are also now providing wellbeing services, with HealthShield recently announcing a range of initiatives. According to consulting firm Punter Southall Health and Protection, employee health benefits can be used to lower insurance costs and reduce the risk of staff members developing illnesses at work, and it believes wellbeing insurance services are underused, despite providing added-value.
Employee health benefits must be used to cut insurance costs and reduce the risk of ill health at work, argues Paul White, senior consultant at Punter Southall Health & Protection.

Wellbeing services often come as standard added-value employee health benefits provided alongside group risk and healthcare insurance products.

This includes services such as employee assistance programmes (EAPs), second medical opinions, virtual GPs, carer support, workplace health screening, and support from experts in musculoskeletal problems, cancer and cardiovascular health. These benefits are sometimes seen as non-essential add-ons or “bells and whistles”.

Although HR health professionals are familiar with these services, they are still, arguably, much under-used and there is untapped potential for their use across other departments such as risk and OH.

Added-value employee health benefits used to be the preserve of group income protection (GIP) and, to a certain extent, group life providers. Now the individual income protection (IP) market is beginning to turn its attention to such services, recognising the potential value to the employee and not just the employer.

British Friendly, for example, launched its Mutual Benefits programme in February 2017, providing its income protection members – many of whom are self-employed – with access to a range of GP, physiotherapy, counselling, diet and lifestyle-related services provided by its support partner Square Health.

In the group insurance market, some corporate cash plan providers are now providing wellbeing services. HealthShield recently announced the launch of a suite of health and wellbeing initiatives on its corporate cash plans for both existing members and new. Aimed at reducing absenteeism and presenteeism, these initiatives include physiotherapy triage, cancer screening, workplace health screening and support for care in the home following a hospital stay.

Linking employee health benefits to insurance premiums

These are all valuable services for employers as early intervention and rehabilitation applications. But there is also now a school of thought that these services should be linked to general insurance, integrating efforts to reduce sickness absence management and claims reduction across HR and risk managers, plus OH professionals. In effect, linking employee benefits with employers’ liability.

The rationale is that if all these departments worked more closely together, added-value benefits could not only be used much more to help ensure early intervention and rehabilitation, but they could also be used in the battle to stem the rising tide of employers’ liability (EL) claims within some companies.

Currently, about one in four EL claims is for stress-related illness, according to a report by the Chartered Insurance Institute’s (CII’s) New Generation Underwriting Group entitled “Is stress the elephant in the boardroom?”

There is little data on EL claims aside from that in the CII report, but what is available shows that overall average costs have increased from £10,000 in 2010 to £60,000 in 2012, the most recent figures available. Subsequent anecdotal evidence suggests that this rate of increase has continued. Although the average cost of claims has remained fairly stable, the volume is rising.

According to some industry experts, this growth might correspond with the decline in the number of employer liability claims for whiplash injuries. Past government reforms restrained the activities of solicitors specialising in whiplash, leading them to consider other potentially lucrative areas such as mental health because, like whiplash, it is difficult to diagnose.

Another factor is that it has become more difficult in recent years to achieve successful stress claims in employment tribunals, putting a potential burden on EL insurance as an alternative.

An ongoing increase in claims would bring with it an inevitable knock-on effect on British businesses in terms of costs, not to mention the reputational impact and loss of productivity that comes with failing to get to grips with workplace stress.

So where do added-value employee health benefits fit in? As the recording and analysis of absence hot spots becomes more sophisticated across companies, HR, OH and risk specialists have an opportunity to collaborate on information sharing and putting in place targeted interventions.

Role of employers in improving wellbeing

Given that industry experts have extolled the virtues of added-value benefits for many years, why are employers failing to realise the benefits? One factor is the assumption in the UK that the state will provide.

Attitudes are changing in this regard, but it will take further support from the Government to get the message across to British business and employees that there is little available in terms of state welfare benefits. Employers will be increasingly expected to provide such benefits and the Government needs to make this explicit.

It is for this reason that Group Risk Development (GRiD), an industry group that aims to improve the uptake of group protection benefits in the UK, has called for added-value benefits to be used much more by employers to help tackle some of the biggest causes of employee absence, such as workplace-related stress.

GRiD made several key recommendations to help encourage more employers to provide GIP in its response to the joint Department of Work and Pensions and Department of Health’s “Work, health and disability Green Paper: improving lives” published in November 2016.

Top of the recommendations was that the Government should campaign to raise awareness among employers and employees that sickness benefits provided by the state are only a safety net and there is a definite need to make extra provision.

The submission stated: “The Government has played a significant role in raising awareness of the need to save for retirement and a similar approach is needed for sickness absence. Group income protection provides great support to employers and employees, and raising awareness is key in contributing to greater take-up.

“As it offers valuable access to cover for people with long-term health conditions and disabled people, group income protection is a great support for recruitment and retention, with policy features specifically designed to support the retention of people with health conditions.”

The submission highlighted to Government what GRiD believes are important features of GIP, which could help keep employees in the workplace after illness or accident, and reduce the overall burden on the state benefits system. These include personalised and tailored early intervention and rehabilitation via added-value benefits.

HR and occupational health should work together

There is much that HR and OH can do now to ensure employers use group risk and healthcare benefits already in place.

The simplest and quickest action is to train line managers to identify any potential employee health and wellbeing hot spots and keep HR informed at an early stage.

Equally, when an employee phones in sick, there should be a system in place to record this, together with the reason, and a process to inform HR from day one if possible. Too often, HR only gets to know about sickness absence a few days or even weeks down the line.

If deemed appropriate, interventions could be put in place from the start. Risk managers can also be alerted to potential problem areas, working with HR to help nip issues in the bud.

More sophisticated employee health benefits

Gone are the days when added-value benefits simply meant putting an EAP in place for all employees to help tick the duty of care box and then promptly forget about it. The services available via GIP providers are becoming more sophisticated.

In addition to the obligatory EAP, added-value services can include: medical second opinions; eldercare support services; and access to independent experts in mental health, cancer, musculoskeletal problems, chronic fatigue and pain.

To improve engagement with all of these services, some providers also offer communications help and expertise.

Generali-UK, for example, recently designed and built a communications hub, which allows HR to produce various types of employer-branded employee communications material.

The hub also includes free access to seminars on healthy diets and lifestyles via online platform WebEx, staff newsletters and online meetings. Plus, employers can get management consultations as part of healthcare management technology Optum.

The provider has also launched wellbeing investment matching. Where employers have identified a specific new initiative for their workforce – virtual GPs, for example – and want to finance it, the insurer will consider contributing to the initiative based on the likely short and medium term outcomes for the GIP population. The new feature helps minimise outlay for the employer while ensuring that their wellbeing needs are being met.

Providers can often introduce companies and their GIP members to a range of additional services, available at preferential rates, such as interactive health kiosks and on-site workshops.

None of these services should be considered non-essential “bells and whistles”. The next step is to look at ways to ensure information gathering and sharing across HR, risk and OH.

This involves breaking down of long-held barriers between these professions. But the market is slowly moving towards this and employers would be well advised to start considering how it can be achieved.

Paul White is senior consultant at Punter Southall Health & Protection.