Cash plans have long been associated with providing cover for an employee’s everyday healthcare needs, most notably optical and dental care. But a series of product changes are moving cash plans far beyond their traditional realm into serious health issues such as cancer and serious bodily injury.
With all the media coverage around cancer provision, it is no surprise that cash plan providers have stepped into the arena. One of the most exciting developments is BHSF’s new standalone cancer plan, Plan4Life, which at the point of a cancer diagnosis allows the individual to claim a cash sum payment of up to £24,000 to spend on monthly bills, additional travel costs to and from hospital, or the cost of alternative therapies or drugs not available on the NHS. Plan4Life (see our product review on page 49) includes access to a GP helpline and counsellors who offer long-term support to the individual and their family. No medical examination or questionnaire is required to apply for cover and family medical history is disregarded. Monthly premiums for a man aged 40 range from £5.10 on level one to £11.50 on level three.
Medicash also offers oral cancer cover on its corporate dental plan, Medicash Smile, which provides cover from £1.50 per employee per week. The product pays out a lump sum of up to £10,000 after diagnosis of oral cancer, although there is a 12 month waiting period before members can claim.
Sue Weir, chief executive of Medicash, says: “The oral cancer cover provides peace of mind by providing additional funds towards treatment costs and giving individuals the freedom to choose the type of treatment they receive and where. The money can also help an individual to cover everyday household bills during their recovery, reducing the financial worries which are often related to a serious illness.”
PERSONAL ACCIDENT COVER
Several providers also offer a personal accident benefit, which covers accidental death and permanent disability. Under BHSF’s Health Scheme plan, maximum benefits per year range from £25,000 on level one to £200,000 on level five. The insured person will receive a payout if they sustain a bodily injury caused by violent accidental external and visible means resulting within two years in paralysis, insanity, loss of speech, loss of hearing, loss of sight, loss of limbs, fractures, burns or accidental death. Simplyhealth’s new product, Simply Cash Plan, offers personal accident benefit as a module which employers can add on for 30p per employee per week. It allows members to claim money back for stays in hospital, up to a maximum of 20 days/nights per year. Meanwhile, Medicash’s Active plan gives a lump sum payment for an accident which results in injury of up to £45,000. Weir says that since the beginning of 2009, personal accident claims have made up 2% of the total claims value paid out by Medicash.
Westfield Health’s Surgery Choices product is another example of a cash plan provider moving beyond oral and dental benefits. It covers employees for 60 different surgical procedures normally classed by the NHS as non-urgent, such as cataracts, gall stones, varicose veins, prostate problems, gynaecological conditions, tonsil problems, slipped discs, hip and knee problems, and hernias.
Cash plans have clearly moved beyond their traditional roots of dental and optical refunds, but their coverage of serious health issues is rarely discussed. James Glover, corporate sales and marketing director at Simplyhealth, believes this is a big failure on the part of providers.
“We believe that in the past cash plan providers have not done the best job of explaining cash plans, and this is why they have tended to be seen as covering everyday optical and dental needs when they do offer more. We’re trying to do something about that,” says Glover.
In the next few months Simplyhealth intends to launch a hybrid product that combines a cash plan with private medical insurance (PMI) so that employees can access preventative healthcare and treatment through one plan. Glover says it is likely that such a product would cover serious illnesses such as cancer.
However, there is some disagreement among providers as to whether blurring the PMI/cash plan divide is a good move or whether cash plans should stick to their traditional role. Stephen Duff, deputy chief executive of HSF health plan, says the industry must distinguish between PMI and health cash plans as there is much confusion about the two.
“Health cash plans do not cover for specific illnesses. HSF health plan pays a cash amount for each night a contributor spends in hospital irrespective of the type of illness they may suffer or its severity. A recuperation grant is also paid on top of this for hospital stays which last longer than seven days. In this respect we do cater for more serious illnesses.
“At HSF, we concentrate on promoting everyday healthcare to prevent moreg serious conditions. Dental and optical checks do fall under this umbrella, but we also cover the cost of health screening through our Specialist and Investigations category if this is referred by a GP. Health cash plans are a great way for people to finance their everyday healthcare and prepare for unforeseen circumstances.”
Jill Davies, chief executive of Westfield Health, says Westfield’s most popular benefits are without a doubt optical and dental, but believes the variety of benefits offered through a cash plan can play an important role, alongside other forms of health insurance, in transforming the healthcare environment.
“In order to stay relevant, health cash plans cannot stand still. The cash plan, in our view, is progressing beyond its traditional optical and dental benefits without losing sight of their importance to policyholders. In fact, we believe its ability to change and adapt is one of the main strengths of the health cash plan.
“But it is inevitable that optical and dental will continue to be the most popular health cash plan benefits, as these are the areas where NHS provision is weakest for everyday care. So while we continually review the market to identify needs and develop new benefits accordingly, the enduring popularity of the core optical and dental benefits should not be underestimated,” says Davies.
Comments from intermediaries suggest that optical and dental benefits will always be the mainstay of cash plans because they are what employees use and want the most. Mike Picken, associate director at Henderson Healthcare & Employee Benefits, says his clients do not see cash plans as an alternative way to covering serious illnesses. Most prefer to run a cash plan alongside traditional PMI to keep down their premiums, cover optical and dental refunds, and as a benefit for lower-paid staff. However, Picken also believes that cash plan providers must be dynamic and not have a one size fits all approach.
“When we sit down with a client and explain the extra benefits cash plans provide – such as personal accident cover, scanning and health screening – clients do become more receptive because it isn’t just about a bit of extra money towards optical care,” he says.
Ingrid Skoglund, managing director of intermediary firm Benefits for Business, says cash plan providers need to offer something more than dental and optical benefits in order to appeal to employers as an entry level product. She says health screening and MRI scanning are a welcome addition and that employers are pleasantly surprised when they discover these are covered. However, Skoglund does not think serious illnesses such as cancer should be covered by cash plans.
“At the moment we have seen remarkable stability of pricing in the cash plan industry, but if providers start adding very high risk levels of cover we’ll see the cost of plans spiral. Cancer cover is more suited to PMI and group income protection,” adds Skoglund.
So while screening benefits and complementary therapies are a welcome addition to cash plans, it appears that cover for serious illnesses like cancer might be a step too far.