With employers increasingly taking responsibility for their staff’s welfare, corporate insurance policies can offer cost-effective cover. Sonia Rach reports
Research has found that 20% of bosses who manage someone with or who has had cancer, do not know how to talk about it with their employees. According to a survey by AXA PPP healthcare, a similar proportion (21%) don’t feel comfortable speaking about any illness with their staff.
In today’s workforce, the responsibility of helping employees very much falls upon the employer. Along with benefits such as childcare and pensions, it comes as no surprise that long-term health is equally regarded as an employer’s responsibility.
As the UK workforce is also increasingly ageing, it’s important that employers are able to help, especially if a staff member were to die in service.
Group life cover – also known as life insurance for workers – is a solution that can provide that help and support. It ensures that if a person passes away while still they are still employed, the family and dependents would be able to cope financially.
“Group risk benefits are a useful tool in managing and mitigating some of the risks of employing people,” says Katharine Moxham, spokeswoman for GRiD (Group Risk Development). “It’s beneficial to consider how group risk protection benefits sit within your overall benefits package.”
When it comes to products, there are a variety of different choices and options. Group life insurance, critical illness cover and group income protection are the central ‘umbrella’ insurance products.
While the core of any group risk solution is the insurance cover, this often includes add-on features such as post-bereavement support and counselling, an Employee Assistance Programme (EAP) helpline including legal advice, medical advice and support, absence management software and early intervention/rehab support, health and wellbeing advice and more.
Lee Lovett, the chief executive of group risk insurer Ellipse, says: “These can add real value to employees – and you as the employer. While the price will obviously be a factor in choosing a provider, you should consider the overall value for money of the proposition.”
But what if there are tight budgets, or a smaller workforce? Lovett argues: “Some cover is better than no cover – even £50k of life cover for each employee would make a real difference and would cost a tiny fraction of payroll.”
However, finding out what is best for each organisation can be a little challenging. Christine Husbands, the managing director of independent care advisory service Red Arc, advises: “Employers should consider how the support service can contribute to their wellbeing and absence management strategies. Some services that provide long-term support, advice and expedited therapies can significantly improve recovery times and hence reduce absence.
“For the employee, a faster return to good health is obviously good news and this in turn is, of course, welcomed by the employer.”
Initially, the best thing to understand are the benefits themselves and how they help an employer.
Husbands argues that group risk products “should be viewed in the same way as pensions: as a responsible employer they are the right thing to provide to your workforce. These benefits can reinforce the values of an ethical employer and help to attract and retain talent.”
As people struggle through their darkest times, their employers need to care and help them in any way possible. Often, these products or options can be an invaluable lifeline to employees when they most need one, giving them not only financial assistance but also other additional support so that they can deal with the situation with less worry and anxiety.
But how does the employer gain?
A broader return on investment
Managing the return on investment (ROI) very much depends on an organisation’s motivation for taking out some cover.
Depending on how effectively this is relayed to staff, employers can monitor staff retention, absence rates, productivity and much more.
GRiD’s Moxham says: “Our research regularly shows that employers don’t necessarily measure ROI on group risk products in monetary terms.
“However, for those that do, ROI can be demonstrated in part by measuring savings in absence rates/costs and savings achieved because there is no need to continue to pay for stand-alone services that a group risk policy includes at no cost.
“It is also worth considering the costs that would be involved in replacing an employee who might not otherwise be able to stay in work or return to work without the help, support and interventions that are provided under group risk policies.”
Yet none of these products are any use if they aren’t communicated effectively to the potential beneficiaries. Communication is key – insurers provide a great deal of support material, both hard copy and online, so it’s essential all employees understand exactly what they are covered for, but also the added value features they have access to.
So, apart from all the other considerations, what’s in it for the employer in hard monetary terms? Moxham says: “When you consider the cost of replacing an employee – which has recently been put at £28,000 per head according to research among SMEs undertaken by AXA PPP – the business case for group risk is clear.”
Ten top tips
1) Research the market but, as well as price, look at terms and added-value services –such as extra support including Employee Assistance Programmes, fast access to counselling, vocational rehabilitation and health and wellbeing services
2) Consider the demographic and profile of the workforce but remember that everyone needs a way to protect their financial position and their dependants’ future, not just senior staff
3) Ensure you understand what you are buying and how to use it
4) Take the time to develop a relationship with the adviser and provider
5) Make sure line managers know how these products and extra services can help them to manage difficult situations better, such as mental health issues and absences
6) Take time to embed the added value services into the working culture and procedures
7) Regularly use all of the communication channels to ensure staff know what they have and how to access the extra support
8) Fully integrate the benefits and extra support services into the overall programme thereby releasing savings
9) Try to be inclusive – everyone needs group risk benefits, even if it is only at a basic level
10) Use the expertise of the adviser to develop and source a group risk programme that suits the business and budget