With 7.54 million cases on NHS waiting lists in March 2024, and 71,000 appointments that require people to wait for more than a year, it is clear why more employees are demanding employer-funded healthcare.
Employers have stepped up, with providers in the corporate healthcare sector reporting that the number of employees covered by PMI grew collectively by 100,000 in 2023. The data, from Benefits Expert’s sister title Corporate Adviser Intelligence (CAI), revealed this represents an increase of 4.2 percent.
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PMI alternative
Employer funded healthcare trusts, which are self-funded schemes set up by employers to pay for the healthcare of their employees, have also grown, CAI data showed.
The total number of employees with medical cover provided by their employers, combining healthcare trusts and group PMI, rose by 5.4 percent in 2023.
This means that more than 4 million employees now have private healthcare cover, either through insurance or trusts, which is an increase of more than half a million in two years.
Axa Health is the largest provider disclosing data under this metric, covering 1.23m employees by the end of 2023. It added 105,000 employees during the year.
Medical costs rise
However, while employer-funded private healthcare cover continues to grow, businesses are feeling the financial strain as medical inflation has surged.
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Aon’s Global Medical Trend Rates Report 2023 revealed that medical inflation for 2024 has jumped to an average of 15 percent, up from 8.5 percent in the previous year. But anecdotal evidence points to renewal cost increases as high as 100 percent in some cases.
Key drivers of these rising costs include musculoskeletal conditions, cancer treatments, and mental health issues, compounded by increased usage of virtual GP services and employee assistance programs (EAPs) leading to more patient referrals.
The IPPR think tank found that employees lose an average of 44 productivity days a year due to illness, which underscores the need for proactive health management. This is helping to drive developments in other areas of funded healthcare such as adopting preventative healthcare options including employee health checks and wellbeing support and digital innovations, such as apps and virtual GP services.
With so many options and levels of corporate healthcare available, not to mention ongoing market innovations, the picture is complex. Data from Vitality showing that sickness costs the UK economy £138 billion a year emphasises the imperative for keeping workforces healthy.
For HR, reward and benefits professionals, these corporate healthcare trends highlight the need to reassess benefit strategies and invest in comprehensive health programmes to ensure a healthier, more productive workforce amid rising healthcare challenges.
Benefits Expert Guide
In the new Benefits Expert Guide to Group Corporate Healthcare we examine and explain the key options for employers. From more mature services, such as group risk protection and PMI, to the newer digital services that have taken off post-covid.
DOWNLOAD THE BENEFITS EXPERT GUIDE TO GROUP CORPORATE HEALTHCARE
