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Is corporate health insurance right for your business?

5 October 2018 - 9:45am

At first glance the world of private health insurance can be confusing. There's a lot of jargon and a wide range of funds and products to choose from, and the pressure to get it right is even higher if you're an employer looking to invest in health insurance for the benefit of your employees.

This article will help you navigate this seemingly complex topic by addressing some of the most frequently asked questions business owners have on private health insurance. 

Corporate health insurance is open to businesses of all sizes.Small business owners can take out corporate health insurance for their employees.

1. What is corporate health insurance?

Health insurance supplied by an employer to his/her staff can be variously known as group health insurance, corporate health insurance or employer-sponsored health insurance, so get used to seeing these terms used interchangeably. 

In fact, the last two are actually examples of the first. Corporate health insurance can theoretically extend to just about any group of individuals, but in practice these days is usually exclusively used in a company setting. The concept, however, remains the same: a corporate health insurance policy covers all eligible members of that group.

The greatest traditional benefits that corporate policies have over individual insurance is that they're comprehensive and comparatively cheaper for those covered. This is because the risk from the insurer's point of view is spread across the whole group of healthier at work individuals.

What are the advantages for employers providing corporate insurance?

  • Attracting and retaining great staff.
  • Showing staff they're valued.
  • Reducing absenteeism.
  • Increased productivity through the management of the impact of chronic illnesses in the workplace.

2. Is my business eligible?

For some, the words corporate health insurance immediately conjure up ideas of large businesses, and the first question you're probably asking yourself, is how many employees do you need to have to be eligible for these plans. 

Businesses of all sizes can reap the benefits of corporate health insurance policies.

There are over 2 million businesses currently in operation in Australia who employ fewer than 19 people, according to government statistics. This makes up 97 per cent of all Australian businesses, by employee size. The good news is that companies of all sizes can benefit from the advantages that come with corporate health insurance. 

The key for any employer is ensuring that the cover is tailored to your organisation, both in terms of its size but also the level of cover you wish to supply, and how you want your policy to work on a day-to-day basis.

If you choose to find cover using an independent consultancy such as HICA, you may be able to access discounts or special offers such as waived waiting periods or quicker access to loyalty bonuses. This will be influenced by the number of employees involved, amongst other factors.

You can choose how much you want to spend, and how much value to provide.There are different funding options to help your employees with the costs of private health insurance.

3. Is corporate insurance going to be too expensive?

Of course, you'll want to know how implementing a corporate health insurance plan is going to impact your bottom line. There are three common ways in which employers can shoulder some of the costs of private health insurance for their staff:

  1. Voluntary health plans  - Here the employer doesn't contribute financially to the individual premiums of their employees private health insurance, but instead offer access to a plan at a discounted rate.
  2. Partially subsidised health plans - In this case the employer and the employee split the costs of private health insurance premiums.
  3. Fully subsidised health plans - This is where the employer pays the entire cost of the premium.

The key is to decide how much value you want to provide against how much you want to spend, but the beauty is that it's entirely up to you

Deciding how much you spend is entirely up to you.

There is, however, an alternative to premium subsidising, which still allows employees to access cheaper private health insurance - excess funding.

Excess funding allows business owners to agree to paying some, or all, of the excess should an employee need hospital treatment. This means staff feel safer accepting higher excesses on their policy, and can receive premium reductions of up to 15 per cent as a result.

As well as being easy to budget for from an employers point of view, this system is also cost-efficient in reducing or negating Fringe Benefit Tax (FBT) that can come with providing perks such as private health insurance.

HICA's corporate health management team is only a phone call away.HICA's corporate health management team can help with the implementation of your plan.

4. Will it be time consuming to run?

Ensuring your corporate health insurance plan will be a success doesn't end with buying the right policy, and many business owners worry that administering a corporate health plan will drain too much time from them, or their HR department.

While it's true that it will take time to integrate a new benefit into your processes, everything doesn't have to fall on you, or your staff. When you make use of HICA's corporate health services, you can also benefit from our corporate health management team, with its combined experience of over 100 years. 

We can help with the day-to-day management of your cover, dealing with areas such as invoice management, staff enquiries and integrating new employees into the program. This frees you up to concentrate on the things that matter most, while your health insurance policy ticks over smoothly in the background.

5. How do I start the process?

If you're keen to start moving towards finding a corporate health insurance policy plan for your business, the process is simple. Get in touch with HICA, where you will be supplied a free, no obligation consultation. We will then work with you to tailor the plan to your business and budget to ensure it's going to meet your objectives.