The health cash plan market is growing again. Nick Martindale examines which employees most highly value the benefit and how employers maximise its effect.
In the current economic climate, offering employee benefits that are genuinely appreciated by staff is vital to getting the most from a reward budget, and those that cost relatively little can sometimes have a disproportionate impact in terms of the value placed on them by employees.
According to research by global consultancy TNS on behalf of PMI Health Group, one in 10 employees sees the humble cash plan as the most valued benefit they receive, making it the fourth most popular overall, behind pensions, life insurance and private medical insurance.
Part of their allure, suggests Lorica Employee Benefits senior consultant Sandra Hall, is that they can be used by everyone for everyday expenses, rather than only coming into their own when staff become ill or die.
“They see a cash plan as something they can actually make use of,” she says. “Most people go to the optician or to see a dentist throughout the year and might possibly need physiotherapy too, so they see it as a much more valuable benefit than something like private medical insurance, where you’re hoping that you’ll never need to use it and where, even if it is company-paid, they’re looking at a chunky P11D liability.”
Another positive feature is the range of employees they can appeal to. Historically, cash plans were born out of Saturday funds – originally designed to finance voluntary hospitals in the late 19th century – and were most common among lower-paid workers in the country’s industrial and manufacturing areas of the north and Midlands. In recent years, though, this has changed.
“More and more, I talk to clients and tell them about the value they could get from cash plans and there’s a lot more interest from all kinds of companies, including white-collar businesses such as pharmaceutical firms,” says Buck Consultants benefit consultant Sarah Brannan.
The TNS research suggests there is now a wide geographic spread; the Midlands and north-east still enjoy high levels of staff appreciation but this is also a highly valued benefit in the south and Wales.
There are certain groups to which cash plans are particularly attractive. The TNS research found 38% of those earning less than the UK average salary of £26,200 put the benefit in their top three, compared to 27% of those earning more than that figure, making it even more appreciated than the much more expensive benefit of private medical insurance in the same category.
Part-time staff – who would inevitably earn less – also appreciate it; some 39% put it in their top three, compared to an average of 35% among full-time colleagues.
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