Gym and fitness centre benefits are increasingly popular employee benefits but what is the best way of covering their costs? Nic Paton reports
For anyone who started going to the gym as a 2012 new year’s resolution and is still, four months on, hanging in there, first, very well done, and second, you may not realise it but you have now successfully cemented a lifestyle change that is increasingly chiming with the priorities of employers.
The idea of employers encouraging staff to make use of gym facilities, whether physically on site or through discounted or subsidised membership at a local facility, is not, of course, new. But with, on the one hand, the UK hosting the world’s top Olympic athletes this summer and, on the other, the cost of managing absence and ill-health (especially stress and mental ill-health) continuing to rise, and now according to the Chartered Institute of Personnel and Development standing at £673 per employee compared with £600 in 2010, there has rarely been a clearer incentive to include fitness in some shape or form within your clients’ benefits or insurance mix.
Just as importantly, research by corporate health cash plan provider Health Shield suggests fitness is becoming an increasingly important, and valued, component within healthcare cover. In a poll of more than 20,000 members gauging the popularity of its fitness benefit – which includes negotiated discounts and contributions to health club memberships, swimming and exercise classes or a personal trainer – it found 65% of 18- to 24-year-olds valued having it as part of their health cash plan, up 12% since 2006. Among 35- to 44-year-olds there had been a 6% rise and a 4% increase among 55- to 64-year-olds.
EASIER SAID THAN DONE?
Yet corporate healthcare and gym provision are not necessarily the easiest of bedfellows, as Tal Gilbert, head of research and development at PruHealth, one of the pioneers in this market, readily concedes.
“We have seen for a long time now that quite a lot of corporates are interested in providing some sort of gym facilities for their staff. It is highly valued by employees but also not necessarily cheap for the company or provider, particularly if it is something you are providing in-house,” he points out.
Common challenges can include how, or to what extent, to offer incentives to encourage staff to carry on going to the gym plus, especially for employers outside larger metropolitan areas, how to offer a genuine choice of facilities or provision. Then there is the ongoing debate over whether better levels of fitness do in reality feed through into significant health insurance benefits, such as reduced claims. Back in September last year, for example, PruHealth published a five-year South African study involving 300,000 members of its regional offshoot Discover Health that suggested a strong correlation between member engagement in incentivised health programmes and lower hospital admissions.
Others, however, remain more sceptical. Richard Saunders, sales director at Healix Health Services, agrees that, while some companies providing free gym membership do report seeing benefits from having fitter employees, there is, after all, no absolute guarantee being fitter will make you any less likely to get, say, cancer. Moreover, over-exercising can easily lead to injuries or musculoskeletal problems that can have a knock-on effect on attendance.
“If you are going to be fitter, it often may have an impact on private medical costs but there are not really the statistics to show this is the case,” he says. “There is no real medical evidence that companies have a lower claims experience as a result.”
“What we are finding more now is that companies are looking to get discounted gym membership but not necessarily putting it into their healthcare spend,” he continues. “A lot of companies are reviewing their benefits provision and keeping private medical insurance but with gym membership being offered as a corporate discount.”
Certainly, one major employee benefits consultancy approached by Health Insurance concedes that many of its clients simply now “source their own gym memberships”.
Nonetheless, when it comes to ensuring choice, a healthcare or cash plan provider will normally offer access to a third-party provider who, in turn, can access a national network of gyms, says Paul Gambon, head of sales at Medicash.
“In our case, even if a gym is not part of our network we will go and try and negotiate with them to get the best rate possible. It means employers do not get so bogged down in the administration or hassle,” he says. “Although gym membership is not seen as a traditional cash plan benefit, it is seen as appealing. It ticks HR boxes about what you want to be doing for your staff. I think in the future we are going to see more focus on non-cash benefits, economies of scale and helping employees to get cash discounts.”
Paul Shires, executive director, sales and marketing, at Westfield Health, another cash plan provider, continues: “A lot of employers negotiate a corporate rate with a gym and if you have a local gym that is probably quite easy to achieve. But with a cash plan we can do it on your behalf, for multiple sites across the country. We can negotiate good rates with large chains or single gyms.”
While gym membership will probably never become more popular than core benefits such as dental or optical, using health cash plans for this sort of benefit is something growing in popularity, argues Lara Rendell, marketing manager at Health Shield.
“A lot of companies have PMI and then have a health cash plan too,” she says. “The PMI may only be for, say, managers but with the health cash plan, because of its lower costs, this can be for everyone.”
She continues: “Employers will, I think, be looking to add more health and wellbeing benefits in the future, particularly as we don’t really know what is going to happen to the NHS at the moment. It is not just about offering cheaper gym membership but also linking health to other benefits and incentives, such as holidays or days out.”
Linking gym membership and a healthier lifestyle to a wide range of benefits, including non-health benefits, can be an important way of encouraging people not to slip back into old habits, agrees PruHealth’s Gilbert.
“Our Vitality proposition, for example, helps people to understand their health and do online health reviews through a range of screening providers,” he says. “But it is also about offering incentives around healthier foods, quitting smoking, rewards for activity and so on. We offer Vitality Points that people can cash in for travel and other benefits, for example. It is about saying if you look after yourself then you will be able to treat yourself and your family. It is a much richer set of motivators than just having a gym in the office.”
Some self-funded trusts are beginning to take a broader perspective about how they use trust funds, explains Marcus Powell, managing director, corporate wellbeing at Nuffield Health, including forging partnerships with employees where each side pays 50% towards the cost of wellbeing activities. Although Nuffield’s core business remains acute hospital care – the organisation is the third largest independent sector hospital group in the UK – it has been expanding its presence in the fitness centre sector, acquiring the 15-strong Greens Health & Fitness chain from De Vere in January, which in turn followed its swoop on Cannons Health and Fitness Clubs in 2007 and Bladerunner corporate fitness in 2010.
Nuffield aims to provide employers with end-to-end health provision, from access to fitness centres to keep employees well to hospital care for when they, unavoidably, fall ill, Powell says.
“The deal is the company will invest in your wellbeing through the trust fund but you will need to match it,” Powell says. “But it does mean you can unlock things such as gym membership, nutrition, physiotherapy and so on.
“If you can encourage people to improve their mobility and fitness then recovery rates may be faster, they may be fitter and less likely to be overweight. Some companies are beginning really to pay attention to this and understand the total cost of ill health, including the cost of absence, of reduced productivity and so on, as well as the upfront costs of gym membership.
“I think companies will begin to recognise that, if what they are interested in is reducing the cost of ill health then they need to be understanding all the contributory factors to these costs – absence, productivity, retention of talent and so on.”
This may mean the development of more integrated services to manage the costs of ill health, so perhaps encompassing everything from gym membership and stress management to relaxation techniques and hospital treatments, Powell suggests.
“It will be about using your trust fund to help guarantee that you reduce the total cost of ill health over time,” he says. “We are not there yet but that is, I think, where we will end up.”
Gyms fit the bill for cash plan members
Research suggests that fitness benefits are an increasingly popular feature of cash plans.
A survey, with responses from more than 20,000 members of cash plan provider Health Shield, show that in 2010, 65% of 18 to 24-year-olds said that they value having the fitness benefit as part of their health cash plan – a rise of 12% since 2006. This compares to a 6% rise for 35 to 44 year-olds and 4% increase for 55 to 64 year-olds. The biggest rise was seen among male employees aged between 18 and 24, jumping by 27% to 71% last year – 9% more than female employees of the same age.
Health Shield’s fitness benefit, like some other cash plan providers, includes negotiated discounts and contributions to health club memberships, swimming and exercise classes or a personal trainer.