How to Get the Best Deal from Health Insurance Providers

Balancing the needs of your business' employees with the needs of your business can be tricky, particularly when it come to finding the right deal for healthcare.

In Ireland, the cost of health insurance for employees is community-rated, meaning that the cost of any given healthcare scheme is the same for each adult, child, or student regardless of their age or medical history. This is fundamentally different from the risk-related model, wherein costs were adjusted by the insurance provider for each healthcare applicant based on their age, occupation, medical history, and other risk factors from their lifestyle that may affect the likelihood that they will need to use their healthcare.

With Ireland’s healthcare costs being standardised for any given plan, how can your organisation get the best deal for healthcare coverage for employees?

One way is to make sure that you provide your employees with a plan that gives them the level of coverage that they need across the three benefits categories of:

  1. Hospital in-patient cover for public and private hospitals.

  2. Day-to-day cover for hospital outpatient treatment, doctor consultations, dental treatment, and other specialist services.

  3. Employee assistance programmes providing information and counseling services to employees.

While the cost for any given plan in Ireland is the same regardless of the “risk factor” that an employee represents, the level of coverage for each of the above service categories does influence the price of a plan.

Because of this, one could say that one trick to getting the best deal from a healthcare provider is to peruse their plans for the best balance of coverage types to meet the needs of your employees.

One important note: starting on 1st May, 2015, lifetime community ratings will be put into effect. This means that there will be a premuim loading for anyone who joins a plan after the age of 35. This loading will be at the rate of 2% per year, so a 35 year-old person will pay 2% extra, a 36 year-old will pay 4% more, and so on.

Choosing the Right Plan

Navigating the healthcare insurance market, and all of the options available from each provider, can be like trying to navigate a maze blindfolded.Depending on the level of coverage that your employee healthcare plan provides, the cost of cover for each employee could range from €1,000 to €1,800 per annum (note that the actual amount may vary from year to year and some premium care plans can exceed these costs).

When researching the healthcare plans that are available from private health insurance providers such as VHI Healthcare (which is partially state-owned), Aviva, GloHealth, and Laya Healthcare, do some research on your staff first. Finding out which plans are the most broadly beneficial can help you narrow your search for healthcare insurance for employees by making sure that the benefits are well-matched to your workforce.

By matching healthcare scheme benefits to your workforce demographics, you can find a plan that efficiently fills the needs of your employees without paying an arm and a leg.

Choosing Your Level of Contribution

Another way to save on employee healthcare plans is to select how much you want to contribute to said plans. There are four different levels of contribution that an employer can make to an employee’s healthcare plan:

  1. Flat Rate Contributions. Under this plan, you (the employer) make a single, flat-rate contribution to an employee’s healthcare costs. Under this contribution scheme, the employee pays the balance for any healthcare costs.

  2. Pay for Basic Plan Only. Rather than pay a flat rate, you can cover the full cost of a basic plan for the employee. If the employee wants more comprehensive coverage, then he or she can pay the difference for the more comprehensive plan.

  3. Pay Full Cost for Comprehensive Employee Coverage. Here, you assume the full cost of a comprehensive healthcare plan for the employee, removing personal healthcare costs as a concern for the employee.

  4. Pay for Full Cover for the Employee as well as their Spouse/Partner and Children. In addition to paying for the healthcare cover for the employee, you can also cover the costs of healthcare for the employee’s spouse/life partner and children. While costly, this is a very effective benefit for attracting and retaining top talents.

When choosing a level of contribution to make, try to balance the costs against the benefits of each. Also keep in mind that employees are taxed a percentage of your contributions to their healthcare plan costs for Pay-Related Social Insurance (PRSI) contribution as a Benefit-in-Kind. As the employer, you also pay Employer PRSI tax on the health insurance premiums your company pays for employees.

As an addendum, it is important to, as the webpage on PRSI states, “make sure you apply the correct contributions class to each employee at the time you pay him or her… if under these circumstances the employee ends up paying more PRSI than he or she owes, their employer must repay him or her the difference.”

According to research by Mercer, 52% of healthcare plans cover the employee and his or her family, 20% cover only the employee, 12% cover employee and spouse, while the other 16% of plans are listed as providing “other cover.”

The best choice of healthcare scheme is influenced by many factors, from how much coverage your employees need, what the standards for healthcare coverage in your industry are, and your need to find ways to prevent employee turnover.

A Little Help Goes a Long Way

One of the most effective ways to make sure that you provide your employees with the best in class benefits for healthcare is to consult with an employee benefits advisor for assistance. These individuals are dedicated to keeping up with the latest available schemes, and can provide a cost to benefit analysis for each plan, as well as help you to correctly calculate the PRSI rate for each employee based on their class and subclass as determined by nature of occupation and weekly pay.

The trouble with researching healthcare offerings independently is that, as an HR manager, you have many other responsibilities that need to be taken care of. Often, by the time that a busy manager completes a thorough analysis of the offerings available for healthcare, some offerings may have changed or new ones may be created which would be a better match for your company’s needs.

A dedicated employee benefits advisor is able to focus on finding the best healthcare benefits packages for your employees, leaving you free to handle other tasks. Employee benefits advisors can compare rates, benefits, and even help with the implementation of a new healthcare scheme.

Learn more about employee benefit options from our free eBook at the link below, or contact Simon Shirley Advisors now!

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