As private healthcare in Hong Kong is one of the most expensive in the world, the group medical insurance offered by employers often covers only basic hospitalisation and a certain percentage of the medical expenses. Voluntary benefits can support the changing needs of employers and employees all year long and provide a meaningful impact on your day-to-day life events health experiences by reducing financial and emotional stress.
According to a survey in 2021, the median savings for individuals in Hong Kong is only about HK$5,000 per month. In the event of a serious diagnosis like cancer or heart disease, or a debilitating accident, people may be unable to work and still need to afford the high medical costs. Under these circumstances, they can quickly find themselves in financial distress and their ability to maintain a decent living standard may be threatened. In this case, individual insurance plans can provide a quicker and more efficient way for a policyholder to achieve better protection for themselves and their families.
Voluntary benefits can empower employees with financial protection from high medical costs while ensuring access to the medical care they need. But for many employees, paying even a few dollars extra a week for voluntary benefits can be a stretch. Further, choosing voluntary benefits can be time-consuming for you because many of these products are offered individually. This also makes it difficult for you to compare prices and find the best deal while meeting your needs.
To streamline the process and make it cost‑effective companies such as Aon are bundling packages that combine voluntary benefits with traditional insurance offerings. These packages can help you get a preferred rate on products, offer discounts to employees, and reduce the number of insurer contacts helping you to move quickly when offering these benefits at times of increased stress.
In addition to bundling benefits, brokers can offer administrative solutions to help manage enrolment and provide a seamless year-round billing solution. Such platforms make it more convenient for employees to access their personal protection benefits and potentially improve participation rates.
Employers do not need to wait until the next open enrolment period to implement voluntary benefits. These offerings can be rolled out quickly and efficiently at any time of the year. Companies that are ready to begin can work with partners, such as Aon, to find the right providers and the right plans to help employees remain happy, healthy, and engaged.
Here are how employers can encourage employees to see the value in adopting voluntary benefits and ensure that they are financially protected.
Bundled Voluntary Benefits Solution
One of the easiest things an employer can do is bundle the three most important voluntary benefits — critical illness, accident, and hospital indemnity — at the point of medical plan election. These three voluntary health plans cover employees against the major risks for high medical costs.
Critical illness insurance and accident insurance cover employees in the event of major, debilitating illnesses or accidents. Hospital indemnity insurance covers employees for prolonged hospitalisations. Combined, these three products offset exposure to any major medical costs that an employee may incur.
By bundling these benefits in a cohesive and sequenced way, employers can help employees understand the gap between their individual needs and their employer’s core offerings. On average, the employer’s plans can only cover about 64% to 87% of the medical and surgical expenses in private hospitals and employees must pay for the rest themselves. Offering these voluntary health products that offset financial exposure at the point of medical plan enrolment helps employees connect the dots between their financial exposure and the protection that voluntary benefits offer.
When offered this way, we see much higher participation in this type of bundled voluntary benefits solutions because it makes it clear that employees can insure their risk for good value.
Flexible Benefits and Costs
Instead of offering all employees the same core benefits, flexible (flex) benefits allow employers to offer several options for employees to create a personalised benefits plan. By opting to lower the sum insured of unwanted benefits options, employees can supplement the premium for the voluntary benefits that they need the most.
Some employers use this approach to encourage employees to enroll in a customised employee benefit plan. For example, if an employee opts down the in-patient benefit, they may get some flex points to supplement the premium of dental insurance from a voluntary benefit provider.
The financial distress caused by high medical bills can lead to disruptions at work and less productivity for workers. Offering additional paid benefits help employers reduce the risks arising due to an employee’s financial stress, such as mental health issues, absenteeism, disengagement, and lower productivity.
More and more companies are adopting flex benefits, but few people have access to the financial reserves they need to cover their financial exposure under these plans. For employers, offering company-paid voluntary benefits is becoming imperative in order to ensure optimal productivity levels and minimize risks to health and wellbeing.
Addressing Biases About Voluntary Benefits
Companies also need to address biases that employeesmay have about voluntary benefits. Some people equate these options with the types of plans offered by commissioned salespeople offering more protectionthan people need. However, these benefits are very defined, providing $10,000 to $15,000 of coverage at a low cost of $2 to $3 a week and are usually offered in a non-sales environment by a self-service solution.
It’s important to educate employees about the misconceptions surrounding voluntary benefits to empower them with the benefits of these plans and help protect themselves in the event of a prolonged illness, accident or hospitalisation.
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