Is it time to reconsider cash plans?

Healthcare cash plans are often regarded as cheap and cheerful. At £1 or less a week, they offer money back for everyday health-related costs such as new glasses, a dental check-up or a trip to the physiotherapist. But, while the price tag may suggest they are more suited to the direct market, product development and repositioning mean they can also offer benefits to advisers, especially in the corporate arena.

Product development teams have certainly been busy over the last few years, with new benefits added to make cash plans more relevant to the 21st century. This has helped the products buck the trend and record some growth.

According to Laing & Buisson’s Health Cover UK Market Report 2011, although the overall market size fell by 2.9% to 2.65 million policyholders in 2010, the employer-sponsored part of the market grew by 11.2%, with a cash plan included in the benefit package of almost half a million employees.

These statistics reflect the focus of product development too. While individual plans have benefitted from a handful of new features, the majority of work has concentrated on turning the corporate plans into valuable tools for both employers and employees.

Paul Roberts, lead consultant at employee benefits consultants IHC, says cash plans are also being buoyed by the current economic climate. “The benefit pound is being squeezed and will be further squeezed as auto-enrolment is rolled out,” he explains. “Being able to provide a benefit that is appreciated and used by employees, but only costs an employer as little as £39 a year per person, makes sense. Employers cannot afford £400 to £800 per employee on medical insurance.” (See Table 1.)

Table 1: Cash plan benefits
The following table shows typical annual benefits for a £1-a-week employer paid healthcare cash plan.
Benefit	Cover
Dental	£50 - £60
Dental accident / trauma	£110 - £165
Optical	£50 - £60
Physiotherapy and other therapies	£150
Specialist consultation	£200 (£500 when scans included)
Chiropody	£25 - £50
Health screening	£100
Additional benefits can include MRI, CT and wellbeing and fitness benefits; and employer	PET scans; health risk assessments; health andhelplines.
Based on Simplyhealth Simply Cash Plan, Shield’s Essentials Plus.	Westfield Health’s Foresight and Health

Product developments

In terms of developments, cash plan providers have really reached out to employers over the last few years, adding in features to help them meet their health and wellbeing and duty of care responsibilities.

Alongside the optical benefit which can cover off an employer’s duty of care responsibilities to employees using VDUs, employee assistance programmes (EAPs) are now commonplace either as an integral part of the plan or an optional extra.

Many have also added support services for employers. These can include absence management services, HR helplines and business support.