One of the aims of the HR Guide to Corporate Medical Insurance is to help HR directors implement the best health insurance plans for their staff. Healthier employees lead to lower absenteeism, greater staff engagement and ultimately better business performance.
We interviewed Ms Luzia Hung, a leading authority on Hong Kong medical insurance. Hung has over 20 years of experience in the pension, insurance and financial markets in Hong Kong and is currently the Chief of Pension & Group Business, AXA China Region Insurance Company Limited.
Where does health insurance fit into AXA’s overall coverage?
AXA has been involved in the medical insurance business since 1991 when it acquired National Mutual. AXA has been building the medical insurance business on top of this acquisition. We currently have about 118,000 members in our healthcare portfolio.
How has the medical insurance market developed in Hong Kong?
Medical insurance in Hong Kong has seen steady growth over the past ten years, particularly in the last four to five years. This has occurred partly because of the government campaign on healthcare reform, which has really raised a lot of awareness within the Hong Kong community.
Another factor would be the ageing population. All of the baby boomers are ageing, becoming increasingly aware of their health, and have higher expectations of healthcare in general.
More recently, as new medical procedures and inventions are increasingly expensive, the cost of delivering care has increased. This, in turn, has driven up expenses for all participants in the medical industry.
Did last year’s global financial crisis have a significant impact on the medical insurance market in HK?
I don’t think the financial crisis impacted the medical insurance market as much as it impacted other markets such as the investment banking one. Those who had already purchased coverage—anticipated it as a fixed cost that they would have to contribute to year after year. So most people in Hong Kong have not cut this out of their budget, but will instead try to make savings elsewhere.
What should HR managers look for when selecting a medical insurance provider or healthcare plan?
All companies have a budget and must work around this budget. I would advise HR managers selecting a plan to ensure it is cost effective and within their budget, whilst providing comprehensive coverage.
When deciding upon staff medical coverage, HR managers should prioritise what items are the most important in terms of the coverage they need. Priorities may refer to specific needs, or may mean having different coverage levels for staff of different seniorities.
HR managers should also look for methods of monitoring and controlling unnecessary abuse of medical benefits which may be achieved by refining HR policy. I also encourage HR managers to select co-payment plans—especially with regard to outpatient visits. These plans are designed so that staff can share costs by either paying a fixed amount, or percentage of, the fee for each GP or specialist consultation. This method is affordable for both employees and employers, and helps stemming abuse of consultations merely to get a one-day sick leave certificate.
How can HR managers ensure that the plan they select is the right one for their company?
Every workforce is different, so one must think creatively. Conduct a survey to find out what employees want and need, then design a package that engages them. For example, there has been a growing demand for Chinese medical insurance since the establishment of the Chinese Medicine Council of Hong Kong in 1999 and subsequent regulation of that industry.
Medical insurance is a very competitive market, how does AXA differentiate itself from its competitors?
I feel that AXA’s strength is in our service. We take a consultative approach with HR directors from the start, take time to understand their needs and help them maximise benefits for their staff based on the budget available. We provide ongoing education and updates on coverage to employees through seminars and regular newsletters. It is important for both the HR department and the employees to acquire a high level of knowledge on their respective policies. We also put a lot of emphasis on our operation’s efficiency and distribution channels to allow easy access to our services for both employers and employees. This also relieves the burden of HR managers for handling employee enquiries concerning medical policies.
What can HR managers do to help lower the costs of their premiums?
One way is to do away with the mandatory one-day sick leave certificate. In most cases, this requirement not only increases the cost to the company and the employee, but may also take employees out of their comfort zone.
If an employee just has a fever, for example, they will probably recover after simply taking rest at home for a day. However, if all staff are required to visit the doctor to get a sick leave certificate, the stress of the visit when feeling unwell, may actually prolong the staff illness and result in a longer-term cost to the company.
Another way HR can save money is to work with the insurer and analyse existing policy usage with them, for example, AXA will run reports and flag unusual activity. On average an employee will visit a GP seven times a year. So if an employee is visiting more than three times per quarter, it may be an area of concern—they may be very sick and need to be helped further. Catching such incidences in time provides scope to give such staff a more thorough health screening.
How can HR managers help secure budget for health benefits?
Budgets are still tight in many companies, but HR can use real life examples that show the value of good medical benefits. Senior management should be made aware of greater levels of staff engagement and loyalty that have been derived by providing staff with such benefits. Having healthy staff onboard ultimately facilitates a healthy business.
Paul Arkwright
Publisher
