Common mistakes made when selecting corporate health insurance
When it comes to implementing a benefits and wellness solution into your company you will quickly find that there are a near infinite number of things you can implement. One of the most important however is health insurance. Health insurance is easily one of the most in-demand benefits in Asia and does indeed form the cornerstone of the most successful wellness plans. The problem is, with so many plans available how can you identify and secure one that will not only support your wellness program but also be one your employees will use?
One way is to look at what other companies have done, the mistakes that have been made, and to learn from them. Here, we take a look at the 5 most common mistakes companies make when implementing corporate health insurance and what you can do to avoid them.
Mistake 1: Not selecting the right type of coverage
In Singapore most companies will consider two types of health insurance plans for their employees:
- Local plans – Designed to provide coverage on a local basis, meaning only within Singapore.
- International plans – Designed to provide coverage on an international basis.
There are a number of similarities between the plans namely, they both provide coverage in Singapore and will both cover some of all of the cost of medical care. The main difference is that international plans tend to provide more coverage and higher limits meaning they will more adequately cover the cost of medical care in Singapore.
The mistake companies commonly make here is that they select the wrong level of coverage for their employees. For example, if your company has offices outside of Singapore and your employees frequently travel to these offices, securing a local health insurance plan leaves these employees uninsured when they are out of Singapore.
If they were to get sick or require medical attention in another country, their medical bills will not be covered, forcing the employee to pay for the care out of their own pocket.
One of the most common ways companies avoid this is by grouping employees together into different tiers. For example, employees who do not travel will be grouped together and receive local health insurance coverage, while those who travel for work will receive international coverage.
Mistake 2: Assuming pre-existing conditions are covered
In the past, medium to large group health insurance schemes have had what insurers refer to as a medical history disregard (MHD). This means that employees who join the scheme will receive coverage regardless of their existing medical conditions. In other words, many pre-existing conditions will be covered unless the insurer attaches specific exclusions in their policy documents.
Compare this with individual plans where most insurers will not provide coverage for people who have had, or have pre-existing diseases or medical conditions e.g., cancer, or diabetes.
The mistake some companies have made here is assuming that just because a group health insurance plan is secured it will have a MHD clause included. In fact, MHD is usually not available on smaller group plans (under 10-20 people). This means that it is incredibly important to review any terms and conditions, and coverage documentation of plans you are considering to see whether MHD is included or not.
As a word of warning: If you do want to include an MHD on your plan you might have to negotiate with the insurer as including it in your plan could result in a higher premium.
Mistake 3: Not fully understanding the plan’s eligibility requirements
Many insurers in Singapore, and indeed around the world, will have specific eligibility requirements for their corporate health insurance plans. The most common requirement is what’s referred to as compulsory membership.
This is a clause that states that when implementing a policy, all employees of a certain level must join the scheme. How it works is that if you are say implementing a group insurance plan for your mid-level employees, the insurer will ask that all employees of this level be enrolled in the plan.
The mistake made by some group health insurance managers is that they don’t fully understand how this works, or that it is included in the policy. When looking at policies it is important to ask the insurer if they have compulsory membership and the details around it. With many insurers it is possible to negotiate and define this clause, which is useful if you plan on implementing different levels of coverage for your employees e.g., senior managers receive international coverage while entry level employees get local coverage.
The key thing to be aware of here is that if a new employee joins the company, or is promoted, they will be required to also join the policy (usually after probation has passed).
Mistake 4: Not involving your employees in the selection process
One of the similarities all of the most successful wellness plans share is the fact that the employees view it to be valuable to them and actually utilize the various elements offered by the wellness plan. When it comes to health insurance, if your employees aren’t utilizing the coverage you are providing, there is a good chance that you are not going to see a positive return on your investment, or could even see a loss.
An effective way you can ensure your employees actually view the corporate health insurance coverage you are selecting as valuable is to actually talk with them during the selection process. Take the time to ask them what types of coverage they believe to be valuable and would prefer having.
Doing this can in turn help to not only set expectations but also identify the most important things the plan you implement should cover. From there, you can then start to look at plans that meet your needs.
With staff involved during the whole process your company should also be able to benefit from increased buy-in, and see a reduction in the time needed to manage the plan. After all, if your employees know from the start how the plan works, there will be fewer questions and concerns down the line.
Mistake 5: Selecting the cheapest option
One thing to be aware of is that group health insurance plans aren’t cheap. When you start looking at the different plans available you will quickly come to find that this is a serious investment. In some cases, the actual amount you will need to spend can be somewhat shocking.
Many companies that see a higher price will be tempted to strive to secure the cheapest option available. The problem here is that while the plan might be cheap, there are other factors to consider including the level of service offered by the insurer, the speed at which they will reimburse claims, the network the insurer has in place, etc.
Yes, you may have saved money on the premium, but if your insurer does not answer your questions, refuses claims, draws out the claims process, and so on, this would inevitably end up costing you a lot more than other plans in the long run. This is especially true if your employees are not actually using the plan.
Beyond that, many of the cheaper health insurance plans will offer lower coverage limits and include more exclusions which could make the plan harder to use. Not to mention the fact that some cheaper policies do not include wellness benefits e.g., health checks, that are quickly becoming the most demanded parts of health insurance. Implementing these will inevitably result in higher costs for you, costs which could be much more than just going with a plan that offered them from the beginning.
How can you avoid these mistakes?
Implementing a health insurance plan in your company can be a time-consuming process, one that can very easily turn into more of a nuisance than a boon. In order to avoid this, we suggest working with a broker like Pacific Prime Singapore.
As a specialist in employee benefits solutions we work with companies like yours to identify your coverage needs, select a plan, and can even manage the plan from start to finish. If you are looking for a corporate health insurance or wellness solution, contact us today to learn more about how we can help.
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