Private Medical Insurance can support recruitment, retention and employee wellbeing. But the real test of a scheme comes when somebody needs to use it, and decisions around cover, limits and access to treatment suddenly become much more important.
For many businesses, Private Medical Insurance (PMI) forms an important part of their employee benefits package.
It can give employees access to private consultations, diagnostics and treatment, while providing employers with a tangible way of supporting the health and wellbeing of their workforce.
But not all PMI schemes are designed in the same way.
While price will inevitably influence an employer's decision, understanding what sits behind the premium can be just as important.
When scheme design becomes real
A case handled by the Clear Employee Benefits team demonstrates why.
A business employing around 80 people was introducing PMI for the first time. As part of the process, particular attention was paid to the design of the scheme rather than simply selecting the lowest premium available.
The resulting arrangement included comprehensive cancer cover, appropriate outpatient diagnostic provision, mental health support and a hospital list selected with the location of employees in mind.
Around 18 months later, one employee noticed a symptom and was referred by their GP.
They subsequently saw a consultant, underwent diagnostic tests and received a cancer diagnosis before beginning treatment.
PMI did not, of course, change the diagnosis.
What the scheme could influence was the employee's route through diagnosis and treatment, including access to appropriate private care and support.
For the employer, having a clearer treatment pathway also helped provide greater certainty around the employee's absence and eventual return to work.
And for the wider workforce, a benefit that had previously existed largely on paper had demonstrated its value in practice.
Why the cheapest PMI scheme isn't necessarily the best value
Reducing the cost of PMI doesn't automatically mean making a poor decision.
Businesses need benefits that are financially sustainable.
However, lower premiums can sometimes be achieved by changing the scope of cover, and employers should understand those trade-offs.
Depending on the insurer and policy, areas to consider can include:
- hospital access;
- outpatient limits;
- cancer treatment;
- mental health provision;
- therapies;
- excesses; and
- other benefit limits.
The appropriate balance will differ from one employer to another.
The objective should be a scheme that is sustainable for the business while remaining genuinely useful when employees need it.
What should employers consider when reviewing PMI?
There is no universal PMI structure that works for every organisation.
Employers should consider questions including:
What is the scheme intended to achieve?
Is the priority recruitment and retention, employee wellbeing, supporting absence management, or a combination?
Where are employees based?
Hospital access that works well for one workforce may be impractical for another.
What does the policy actually cover?
Headline descriptions can hide meaningful differences in limits, exclusions and treatment pathways.
Is the scheme being used effectively?
Employees need to understand both the core insurance and any additional services available.
Has the workforce changed?
A scheme designed several years ago may no longer reflect the size, demographics or needs of the business.
Look beyond the renewal premium
PMI reviews can easily become annual price comparisons.
A more useful review should consider whether the arrangement remains appropriate for the people it is intended to support.
That means understanding what has changed, examining how the scheme is performing and making deliberate decisions about both cost and cover.
The best time to understand those decisions is before an employee needs to make a significant claim.
If your business is introducing PMI, approaching renewal or would like to understand whether an existing scheme remains appropriate, the Clear Employee Benefits team can help review the options.
Contact ebenquiries@thecleargroup.com to start a conversation.
