The rising health insurance cost and the complex tariff structures that various service providers offer today have employers confused. Their biggest problem: is there a magical sum/policy that can fulfil the needs of every employee? The problem becomes confounded as they a double task: to contain cost as also to ensure that every one of their employees are aware of how much cover they possess, and do not hesitate to avail of it.
The numbers speak for themselves: Over 50 percent employers consider increasing healthcare cost to be a major concern as the incidence rates of critical illnesses have risen 65 percent in the last three years alone; Nearly half employers (46 percent to be precise) have a difficulty in understanding healthcare needs and selecting a suitable package for their employees; A similar number (45 percent) face a challenge in executing preventive healthcare programmes and want insurers to be a partner in the process.
These are a few of the takeaways from the ‘Trends in employee benefit programme–2013’ research conducted by ICICI Lombard General Insurance.
According to the survey, so far this year, as many as 5.05 million claims were settled against over 8 million in 2011 and 4.3 million last year. One of the reasons for lower claim settlement seems to be a gap in communicating these benefits to employees.
But some companies are doing their bit too. For instance Loop Mobile organises camps at the beginning of the year, where each department is provided with complete information on health insurance, so that employees don’t have to go through multiple levels while settling claims.
“A multi-pronged communication approach is adopted to communicate the health benefits, an annual communication containing highlights of the cover is communicated at the beginning of the year. Special weeklong roadshows are conducted in coordination with insurers to create awareness. For ease of access, the policy details and processes are also communicated via our internal employee portal,” says Vikram Tandon, head of HR, HSBC India.
Organisations could try reaching out to employees and widening communication channels to understand their needs. “During the renewal of the mediclaim policy, we reach out to employees to take their feedback. We review their suggestions and accommodate them based on feasibility,” says Venkataramana B, president (group HR), Landmark Group.
“We face challenges on expectations of employees in terms of coverage for extended families and in managing changes arising out of divorces/ remarriages/adoptions, etc,” says Ramesh Shankar, executive vice-president and HR head at Siemens.
Over 50 percent of employers are worried about the increasing healthcare cost as in the past three years alone there has been a 65 percent spike in the incidence rates of critical illnesses.
“Till 2006, non-life products such as fire, motor, property, etc, were under the tariff regime. Hence, general insurers usually offered health, personal accident and travel cover at heavy discounts along with other products to gain a competitive edge.
“With the introduction of de-tariffing in the health insurance segment, companies are encouraged to create scientific rating methodologies and adopt better risk management practices and independent pricing for each business. Alongside, the insurers also revised their cost structures to offer innovative products and services to the customers,” explains Antony Jacob, chief executive at Apollo Munich Health Insurance.
With rising focus on preventive healthcare and early detection of ailments, 43 percent of employers are administering wellness initiatives. Siemens provides a preventive health check-up plan for tis staff right from workmen to executives every two years.
So what is the ideal sum that employers can offer as health insurance?
“There are two aspects to this,” says Sanjay Datta, chief of underwriting and claims at ICICI Lombard GIC. “It depends on your population mix and the ratio of critical and non-critical diseases. The sum has to be enough to cover all non-critical diseases. The sum for critical diseases, however, would have to be configured.”
