Why you should consider Private Health Insurance
Subsidised Private Health Insurance (PHI) is one of the most highly sought-after employee benefits in Australia. According to Seek, it is the fourth most appealing benefit that businesses can offer to Australian employees.
Employers should consider insured benefits programs which include health insurance subsidies. A MetLife’s study found that 60 percent of employers surveyed say offering health insurance has led to higher productivity levels in the workforce.
Offering private health insurance may not only attract talent, but it can give employees peace of mind. A higher level of health care can be useful in assisting employees to return to work sooner which could ultimately benefit a company when it comes to business productivity and bottom line. Long waiting times in the public health can significantly affect the quality of life for an individual and impact their ability to return to work.
The number of Australians holding private health insurance has dropped in recent years as premiums continue to rise. Rising costs of living has seen Australians reduce their level of private health cover, particularly for those in the under 30 age group. Despite the drop in people holding private health insurance, over 80 per cent of individuals with PHI still believe they get value for money.
The private health sector plays a crucial role in Australia’s public healthcare system. According to Private Healthcare Australia, the sector assists with nearly two-thirds of non-emergency surgeries in Australia. 60 per cent of all surgical procedures carried out in Australia are performed in private hospitals each year. If public hospitals had to take on this burden, it would cripple the public system and send government expenditure skyrocketing.
The Australian Government recently introduced several reforms to simplify certain elements of the healthcare system. These reforms were put in place to encourage young people to take up PHI. As part of the reforms, PHI providers were permitted to offer discounts to new applicants joining at a younger age.
So, we know people value PHI but they find it difficult to justify the increasing cost. That is where Corporate Australia comes in. There is a big opportunity for employers to offer private health cover as part of their employee insured benefits program to attract talent, keep their employees engaged and boost productivity.
What should employers do?
Employee insured benefits can require a significant investment from employers in terms of resourcing, ongoing management and upfront financing. The long-term value of this investment is clear. Driving wellbeing via a subsidised health plan is generally believed to improve people’s wellbeing. The business case for driving wellbeing is clear. Employees with strong overall well-being are six times as likely to be engaged in their jobs and 32% more likely to stay with the company. Furthermore, business units with high engagement deliver 21% higher productivity, 22% higher probability and 10 per cent higher customer ratings.
Aon can help organisations benchmark your employee benefits program to ensure you have a well-structured and sustainable strategy in place.