Companies need to balance the cost and competitiveness of healthcare benefits.
The South African economy faces numerous challenges, including low economic growth rates, high unemployment rates and inflation pressures. These factors impact both businesses and employees, making quality and affordable healthcare benefits increasingly important. The introduction of the National Health Insurance (NHI) aims to provide universal healthcare coverage to all South Africans. However, the transition phase could take many years, and potential gaps in the system mean that offering some form of comprehensive healthcare benefits is crucial.
Cost-effective healthcare alternatives
Businesses can ensure their employees have continuous and reliable access to necessary health services. Healthcare benefits are crucial for reducing absenteeism and creating a healthy and productive workforce. Offering healthcare benefits enhances employee satisfaction, reduces turnover and positions businesses as attractive employers in a competitive job market. Healthcare Consultants can play a pivotal role in guiding businesses towards these alternatives.
Examining budget-friendly options
Health subsidy: Health stipends allocate a fixed amount of money to employees for health-related expenses, offering some flexibility in choosing services that meet their individual needs. While this approach can help employees cover basic health costs without imposing a significant financial burden on employers, it may not provide sufficient coverage for more extensive medical needs or unexpected health crises.
Affordable medical aid options: Budget-friendly, entry-level medical aid options exist and are generally useful for lower-earning and blue-collar workers. However, even these options can be unaffordable for many, and still not providing comprehensive coverage for all medical needs.
Reliance on state-run public clinics: Another alternative is for employees to rely on state-run public clinics rather than seeking private healthcare. While public clinics offer basic health services at minimal or no cost, the quality and accessibility of care can be inconsistent due to overcrowding, long wait times and limited resources.
Reducing absenteeism, talent attraction and retention with medical insurance
Flexible health insurance products help bridge the gap by increasing access to quality private healthcare for workers at an affordable cost. Notably, these options include plans starting at just R260 to R440 per person per month, which includes a day-to-day cover and hospitalisation benefits.
Key considerations for health insurance products
Access to essential care: Health insurance provides access to essential day-to-day care and some hospitalisation in a private sector healthcare setting. Benefits typically include unlimited GP or nurse visits, in-hospital illness and accident benefits, and medication for acute and chronic conditions.
Additional services: Additional services may include basic dentistry, optometry, radiology, pathology and limited specialist treatments and consultations. However, it is crucial to understand the limitations of health insurance, such as potential exclusions for high-cost treatments like cancer or dialysis.
Limitations: differentiating medical insurance from medical aid
Medical insurance: Medical insurance is managed by insurance companies and offers predefined benefits for specific health events or conditions. Unlike medical aid, it is not required to cover Prescribed Minimum Benefits (PMBs). PMBs are a set of defined benefits to ensure that all medical scheme members have access to certain minimum health services, regardless of the benefit option they have selected. Medical insurance premiums can vary based on age and other risk factors, and the payouts are fixed for specific events as outlined in the policy.
Medical aid: Medical aid schemes are non-profit organisations regulated by the Medical Schemes Act and are required to cover PMBs. These benefits include emergency medical conditions, 271 listed medical conditions and 26 chronic conditions. Medical aid schemes charge members the same premium for the same benefit option, promoting a community rating approach where risks are shared among members.
Maximising employer and employee benefits
Healthcare Consultants play a critical role in navigating the complexities of healthcare benefits. They must guide businesses in balancing the cost and value of healthcare benefits by strategically planning and evaluating options. This ensures that both employer and employee needs are met, creating a win-win situation. Consultants also need to assess whether lower premiums will offset expenses or co-payments that would have been covered by medical aid schemes. Typically, health insurance pays a defined amount for specific health events or conditions, detailed upfront in the policy document.
Conclusion
In today’s economic climate, businesses must innovate to provide competitive healthcare benefits without breaking the bank. Leveraging flexible health-insurance products and cost-effective alternatives can help companies reduce absenteeism and retain good workers. Employee benefit consultants are essential in guiding businesses towards sustainable and effective benefit strategies.
For more detailed information on health insurance products and how they can benefit your business, download the brochure from Old Mutual at this link.
Thenjiwe Ramorotho is the Regional General Manager: Inland at Old Mutual Corporate.
