Private Medical Insurance - Risk Mitigation and Cost Management Strategies
With NHS waiting times at record levels and employee expectations rising, offering Private Medical Insurance (PMI) has become increasingly important for employers. However, at the same time, insurance premiums are climbing sharply, making cost management crucial. As such, strategic management of your healthcare benefits to protect your workforce and your budget is crucial.
We will be exploring this in more detail in a webinar this autumn, but for now, here are some key details around both of these strategies.
Key Risk Mitigation Strategies
Review Your Underwriting
If using Medical History Disregarded (MHD), consider Moratorium or Full Medical Underwriting for new entrants to exclude pre-existing conditions.
Implement Smart Governance
Restrict enrolment to employment start dates or annual renewals. Add waiting periods aligned with probation and require minimum 12-month opt-out commitments.
Design Strategic Eligibility
Consider tiered coverage based on seniority or length of service rather than blanket coverage for all employees.
Cost Reduction Strategies
Manage Excesses
Implementing excesses from £100-£1,000 significantly reduces premiums. Consider pairing with Health Cash Plans to reimburse employees for excess costs.
Set Benefit Caps
Limit outpatient consultations to fixed amounts and consider excluding treatments available on the NHS within six weeks. Place strategic limits on specific treatments whilst maintaining core coverage.
Use Clinical Pathways
Direct employees to approved pathways and UK hospital networks for faster treatment and cost savings. Restrict access to the most expensive private hospitals where possible.
Focus on Prevention
Maximise value-added services such as Employee Assistance Programmes, health cash plans, and company-sponsored health assessments. These complement NHS care whilst reducing PMI claims.
For Larger Schemes
Consider stop-loss insurance for individual large claims or overall scheme losses. Corporate excess models, where employers share costs up to set limits, can provide premium savings.
Taking Action
Effective PMI strategies must reflect UK healthcare realities and your specific workforce needs.
With NHS pressures unlikely to ease, regular reviews of your PMI arrangements are essential. Strategic management helps maintain competitive employee packages with predictable budgets.