How Employers Can Offer Benefits While Keeping Costs in Check

As healthcare costs continue to rise, one of the most pressing concerns for employers is how to offer comprehensive medical benefits without breaking the bank. Finding the balance between providing valuable health coverage for employees and managing the overall cost of benefits is a complex challenge that many businesses face today. However, with the right strategies, employers can design and implement employee benefits packages that are cost-effective, sustainable, and beneficial for both the company and its employees.

In this article, we’ll explore the ways that employers can use to manage healthcare costs while still providing competitive medical benefits to attract and retain top talent.

Group Hospitalisation and Surgical Insurance

Group Hospitalisation and Surgical Insurance (GHS) is a crucial component of employee benefits in Singapore, providing coverage for medical expenses incurred from hospitalisation and surgical procedures. This is one of the most common forms of employee benefits as it covers a range of medical services, offering peace of mind and financial protection for employees.

Although there are several factors to consider when purchasing Group Hospitalisation and Surgical insurance, the 3 main factors that will affect the premium are:

Type of Hospital
Type of Ward/No. of Beds
Per Disability/Annual Limit

In general, Group Hospitalisation and Surgical plans which cover private hospitals will cost more than those that only cover government restructured hospitals, assuming that we hold all other conditions equal. Similarly, a 1 bedder plan will be more costly than a 2 or 4 bedder one. Lastly, a higher per disability limit or annual limit will naturally incur a higher premium.

Employers can tailor their Group Hospitalisation and Surgical plans according to their employees’ needs to manage cost. For example, if a higher limit is preferred by employees, then a plan with a high annual limit under a government hospital 4 bedder ward can be considered. On the other hand, if employees prefer a more comfortable stay, then a plan with lower annual limit under a private hospital 1 bedder ward might be preferred. By adjusting the limits and type of hospital and ward afforded by the policy, employers will be able to manage the premiums according to their expectations, while still providing sufficient benefits to employees.

Outpatient Coverage

The three main types of Outpatient coverage include General Practitioner (GP), Specialist (SP) and Dental coverage. As their names suggest, these plans cover employees’ visits to General Practitioners, Specialists and Dentists respectively.

For Outpatient General Practitioner plans, premium largely depends on whether there is co-payment involved. Generally, including co-payment will reduce the premium of an outpatient General Practitioner plan. This is also true for Specialist and Dental plans, with the additional consideration of whether the plan will include non-panel clinics or only panel clinics. Plans which cover both panel and non-panel clinics will typically be more costly than those which only cover panel clinics. Additionally, Specialist and Dental plans have annual limits, with higher limits incurring a higher premium.

With all this in mind, employers can manage their outpatient plan premium costs by adjusting the policy’s annual limits, panel or non-panel clinic options, as well as the copayment requirements.

Group Term Life, Group Personal Accident and Group Critical Illness

Other common employee benefits include Group Term Life (GTL), Group Personal Accident (GPA) and Group Critical Illness (GCI). Group Term Life covers death as well as total and permanent disability, Group Personal Accident covers accidental death and permanent total disability, while Group Critical Illness covers critical illnesses such as major cancer and heart attack.

The common factor among these three types of insurance policies is that the sum assured, or a percentage of it, will be paid out in the event that the policy’s conditions are fulfilled. For example, a Group Personal Accident plan might pay out 100% of the sum assured upon accidental death. Hence, the premium for these policies will mainly be affected by the amount of the sum assured. A higher sum assured will generally incur a higher premium and vice versa.

Employers should weigh the costs and benefits when deciding on the sum assured amount for these policies, such that the premium cost is within their expectations.

Implementing Wellness Programs

Investing in wellness initiatives can significantly reduce long-term healthcare costs by helping employees maintain good health, prevent chronic conditions, and reduce the need for expensive medical treatments. Programs can include:

Preventive Screenings: Encourage regular check-ups, vaccinations, and screenings to detect health issues early.

Fitness and Nutrition Programs: Offer gym memberships or provide discounts for fitness-related activities, healthy eating workshops, or wellness challenges.

Mental Health Support: Mental health programs, including counselling and stress management resources, can improve overall well-being and reduce burnout.

Wellness programs benefit both employers and employees as a healthier workforce means fewer sick days, reduced absenteeism, and increased productivity. This helps cut down on healthcare claims and insurance premiums in the long run, since insurance premiums tend to increase with the number of claims. Employees will benefit from improved physical and mental health, lower medical costs, and a more supportive work environment.

Conclusion

While the rising costs of healthcare can be daunting, employers can make strategic choices to provide medical benefits while keeping costs in check with careful planning. By offering a mix of cost-effective plans and wellness programs, employers can provide the benefits that employees need while meeting their budget requirements. If you are interested in exploring more on employee benefits, please contact us today.