Q. What is a cash plan?
A. It is an insurance policy employers can offer to their staff to help them grapple with the everyday stresses of life, as well as some of the more traumatic events they may encounter. As part of a health and financial wellbeing programme it can help reduce absenteeism and improve employee productivity and retention.
Q. What sort of events does the insurance policy cover?
A. Typical benefits include cash contributions towards optical and dental tests and treatment, complementary therapies such as physiotherapy, acupuncture and homeopathy which may not be readily available on the NHS. Cash contributions to private medical consultations and healthcare reviews, lump sum payments to cover the extra expense of the birth of a child or hospitalisation.
Q. Are there other benefits as well as monetary payments?
A. Yes plans provide access to confidential helplines with trained staff to assist with legal disputes, consumer complaints, debt counselling. A confidential one to one counselling service may help employees overcome mental health issues or traumas, such as injury from an accident, bereavement, addiction and relationship issues.
Q. Are these plans a substitute for private medical insurance (PMI)?
A. No, PMI policies provide for healthcare needs beyond those of a cash plan. But PMI does not usually include chronic conditions, whereas a cash plan may enable first level access to diagnosis, PMI requires a GP referral. Cash plans can also include treatments excluded or restricted under the PMI policy. A cash plan can be complimentary to a PMI policy and help to keep the cost of PMI down if the cash plan is used as the first source of funding for initial consultations which may eliminate the need for more tests later and obtain diagnosis sooner than NHS waiting times would allow.
Q. How much would a cash plan policy typically cost an employer?
A. Premiums vary according to the level of cover selected but can start from as little as £5 per month per employee covered. The premium paid by the employer is a taxable P11d benefit for employees. Payment of claims is tax free. The employer may claim the cost of this as trading expense so long as it is available to a large proportion of the workforce.
Q. Can employees pay for the cash plan?
A. Individual policies are available, and employees can be offered the cover on a voluntary basis or as part of a flexible benefit package. It can also be paid for by employee salary sacrifice, so that the employer deducts the cost from the pre-tax salary of those employees who elect for this benefit. The premiums for voluntary schemes are a little higher than for those which cover the whole workforce. Schemes can also offer to include family members on a voluntary basis.
Q. Does offering a cash plan involve a lot of administration?
A. No, once the plan has been established, LEBC Risk and Reward will help the employer communicate the benefits to staff and provide access to a claim helpline. The employer is not involved in the claims process and all claims are confidential to the employee. The employer may receive a high-level report of the benefits paid out by the scheme and the areas of advice covered by counselling and the helplines. This can be a useful tool for the employer to understand the causes of stress in the workplace and where applicable to take additional steps to ease these.
Q. What sort of claims might typically occur?
A. An employee may be seeking time off due to childcare arrangements having broken down or need to research and find care for an elderly relative. The employee assistance programme can help find facilities and research options for the employee. An employee may have a niggling health worry which their GP has not been able to treat, they may benefit from a private medical consultation with a specialist. An employee may have been involved in an accident which has resulted in muscular skeletal issues, a contribution to physiotherapy costs may help them return to work sooner. An employee may have a gambling addiction which in turn has created debt problems, the counselling service can provide one to one help. Lower paid staff may appreciate a contribution to dental treatment or the cost of a new pair of glasses.
Q. How can employers find out more?
A. Email: firstname.lastname@example.org
Director of Public Policy, LEBC, in conversation with Stella Trussler LEBC Risk & Reward
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