From April 2007 employers who provide healthcare benefits via a ‘cost-plus’ or trust scheme will be able to benefit from PruHealth’s award winning product and vitality programme.
‘Cost plus’ schemes give large employers more direct influence over the provision of medical benefits. With ‘cost plus’ the company takes on the risk of claims (up to a certain level) and therefore has more scope to tailor the types of benefit, benefit levels, and excess charges among other things – ultimately giving them more control over the cost of their PMI.
Putting the scheme under trust allows companies to save significantly on 5 per cent insurance premium tax.
Dave Priestley, Sales Director at PruHealth, said: “Businesses, particularly large companies, know that investing in the health and wellness of employees helps give them a competitive edge. PruHealth, with its unique Vitality rewards scheme, is ideally suited to service these types of scheme. With PruHealth, if staff take steps to improve their health and minimise claims, they can reduce the cost of PMI to the employer as well as reducing their own P11D tax liability.
“It’s all about helping to generate that competitive edge. Businesses everywhere are striving to make their staff healthier and they want to do this in the most cost-effective way possible. A ‘cost plus’ or trust scheme gives them more control over their healthcare benefit to staff.
“Companies with ‘cost plus’ or trust schemes are focused on maximising the value they get from every pound spent on employee healthcare. They know better than most that it makes sense to try to engage their staff in a more healthy way of life. With PruHealth, Vitality does this work for them: employees have discounts to healthy organisations – such as £25 monthly membership to Cannons Gyms and heavily discounted health screens – and they are rewarded for using them. Plus we have proof that Vitality helps encourage people to make healthy choices: a third of PruHealth’s individual policyholders have changed their behaviour as a result of Vitality.”
How ‘cost plus’ and healthcare trust schemes work
A ‘cost plus’ scheme is a cost-effective way for companies to provide healthcare benefits to their employees. Instead of insuring the cost of all private medical expenses, the ‘cost plus’ scheme allows the company to actually fund those expenses for eligible employees.
What this means is that the risk involved is transferred to the employer from the insurance company. The insurance company is now only involved in actually administering benefits and treatment. Companies can choose to ‘cap’ the value of claims they are responsible for under the ‘cost plus’ scheme – any claims above these can still be insured.
Companies that write the ‘cost plus’ part of their scheme under trust can also save on insurance premium tax (which currently is 5 per cent).
Benefits of these schemes
With ‘cost plus’ and trust schemes, companies have the freedom to offer their own set of benefits to employees – thus managing the costs more effectively. With PruHealth, employers have the option of tailoring the schemes to suit their organisation and budget, and all choices can be changed each year on renewal.
One important aspect of tailoring the schemes is flexibility in benefit levels. This applies to areas such as hospital charges, diagnostic tests, maternity benefit and cancer cover. PruHealth have invested in developing a range of benefit choices for employers. In terms of cancer, there are four options: one, no cover; two, NICE guidelines; three, NICE guidelines with an additional list of high-cost new technology drugs; four, full cover. Each employee will be given a schedule of benefits, unique to their organisation, which will show them what exclusions or limits apply to them.
The PruHealth ‘cost plus’ facility also gives employers more flexibility in the way that claims are paid. The employer has the opportunity to make exceptions and to agree extra treatment that would be declined under a normal scheme.
Why Vitality is important
Vitality is PruHealth’s reward scheme that is used across all its policies – individual and corporate. Within the corporate trust scheme Vitality has the advantage of promoting healthy activities, which could ultimately help the employer manage their costs.
Vitality works as follows: there are a number of health organisations that PruHealth has partnered with – including Cannons Gyms, various screening partners and Champneys Health Spas – all of which are available to PruHealth members at a discount.
Members who do these healthy activities earn points, which add up to give a status level at the end of the year. There are four status levels: bronze, silver, gold, and platinum. Depending on which status level a member reaches and dependent on benefits paid, they will earn money as cash back or an increase in their personal health fund. The personal health fund option can be used to pay for benefits not normally covered by PMI – such as private GP care, infertility investigations, health screens and maternity related expenses, among others. The cash back or personal health fund act as incentives to employees to get healthier.
The information contained in Prudential UK’s press releases is intended solely for journalists and should not be used by consumers to make financial decisions. Full consumer product information can be found at www.pruhealth.co.uk.
|Sophie Dawn||Tel: 020 7150 2574||Mobile: 07810 753485|
|Izabella Siemicka||Tel: 020 7121 8513||Mobile: 07917 557528|
PruHealth was launched in October 2004 as a joint venture between Prudential and Discovery Holdings from South Africa. Since launch, PruHealth has grown quickly. It now has nearly 100,000 lives, and has won some major new deals. One third of our membership base is new to the PMI market, and our members are engaging with Vitality.
PruHealth was chosen, among other stakeholders, to champion the Department of Health’s small change, big difference campaign.
PruHealth was chosen, among other stakeholders, to champion the Department of Health’s small change, big difference campaign. It is aimed at adults with a message that even small changes in diet and physical activity can make a difference. Launched by Tony Blair and Patricia Hewitt in April 2006, PruHealth was the only private medical insurer to be selected at launch.
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