Healthcare cashplans in tandem with PMI – a win-win outcome? Sep 11

Since writing about the rise of healthcare cash plans recently, it’s come to our attention that operating cashplans in tandem with PMI schemes can save money and add benefits. Here’s how:

Added benefits
With cashplans offering cover for minor and everyday healthcare - such as dental, optical, initial consultations and physiotherapy – having both policies will cover virtually all of the healthcare bases. But surely that’s simply increasing the cost? In fact, the opposite can apply:

Managing claims on PMI schemes helps reduce premiums
If the cash plan is used before resorting to the PMI scheme then the claims on the PMI scheme will reduce. Cashplan premiums are not affected by the claims history, while PMI premiums can be materially affected by claims levels.

Introducing a PMI scheme excess to pay for the cashplan
Many employers have found that they have been able to introduce a cash plan to complement their PMI scheme on a cost-neutral basis.  This is because they have introduced or increased the PMI scheme excess and the resulting decrease in premium pays for the cost of the cash plan. The negative aspect of this approach is that employees will have to pay the excess on claims. However, there’s one more aspect of cashplans which can mitigate this:

Covering excesses on PMI schemes
In some cases the cash plan benefits can be used to fund the PMI excess meaning that the employee is not out of pocket in the event of a claim. Westfield Health are one of the cash plan providers who promote this approach with their Foresight cash plan. Here's Westfield's explanation of how it might work in practice for a hernia:

1. Claimant goes to GP feeling unwell and complains of a pain in their stomach.  G.P recommends and refers claimant to see a consultant as he suspects a possible hernia.

2. Claimant has a private consultation. The cost of the consultation can be claimed, up to set limits, on the Foresight Health Cash Plan. A full itemised receipt should be submitted within 13 weeks of payment together with a claim form.

3. Specialist advises a hernia repair operation is required.  PMI provider needs to be contacted to set up a claim for further treatment and hospitalisation regarding the hernia condition.  The PMI provider will deal with all bills concerning eligible claims on a direct basis to providers but they will notify you that a one off £100.00 excess is payable.

4. If the claimant receives diagnostic tests/consultations under the PMI scheme policy they may be able to claim back the associated excess from the Westfield Plan under the consultation benefit, provided they have not already used up the allowed benefit for the period. The claim is made by submitting the excess statement (clearly showing that the excess is payable against diagnostics/consultations) together with the receipts for both the excess and your hospital diagnostic/ consultation/tests to Westfield Health.  Claims must be submitted within 13 weeks of payment.

Search the market
Given the extensive range of products and providers in the cash plan and PMI arena, getting an independent adviser to look at your options is by far the best route.  If you've already got a PMI scheme with little or no excess then a complementary cash plan could be a great way to enhance the benefits you offer your staff, potentially improving recruitment and staff retention.  And better still, it could cost you and your employees nothing.