Analysis: Benefit duplication - an unavoidable fact of life?
The growing trend for added value benefits means that employers with cash plan, PMI and group risk schemes in place can often find themselves paying twice for the same service, as Sam Barrett reports
With health insurance providers keen to stand out from the competition, added value benefits such as online health information and employee assistance programmes (EAPs) are fast becoming the norm. Add to this the benefit overlap between products, and employers can soon find themselves paying two, three and even four times for some elements of cover.
“It’s not good,” says Wayne Pontin, director of Jelf Employee Benefits, the intermediary. “This can be fairly common with EAPs in particular. A lot of the income protection [IP] providers have built them into their plans and you’ll also find them on cash plans and medical insurance. It does make duplication an issue.”
For example, among the group IP insurers that include an EAP as a standard part of the package are Aviva UK Health, Canada Life, Friends Life and Unum. Including an EAP is also common among the medical insurers, for instance Aviva has a stress counselling helpline as standard on its plans. EAPs are also included on corporate cash plans, including those provided by Westfield Health and Health Shield.
DUPLICATION FRUSTRATION
The inclusion of all these "free" benefits is something that irritates Mike Izzard, managing director of Premier Choice Group.
“They’re window dressing: you won’t get a reduced premium if you ask a provider to remove its EAP,” he says. “The providers bundle them in to make the product look better and this can cause confusion for clients. Rather than add these freebies they should really focus on the core benefits that employers want.”
For Pontin, part of the problem arises from the silo mentality that exists around advice.
“Duplication can easily occur when you have one adviser looking at medical insurance and related benefits and another looking at group risk," Pontin says. "Employee benefits consultancies can take a more holistic view.
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According to its website, it invests in 'high-growth healthcare and technology companies worldwide'. Described as a 'revolutionary new way of delivering health care', the clinics would be set up in retail centres, including supermarkets such as Tesco
EAPs are also included on corporate cash plans, including those provided by Westfield Health and Health Shield. The inclusion of all these "free" benefits is something that irritates Mike Izzard, managing director of Premier Choice Group.
Shuhala, in a telephone interview, said it was the principle, not the money, that prompted him to sue. "What happens next? Do they attack life insurance benefits? Do they attack the health insurance benefits? Do they attack the pension benefits?
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