Companies in Hong Kong are already paying too much for business medical insurance and their costs are set to increase further over the coming year, according to research carried out by Alliance Insurance Services. Over the last five years medical insurance premiums have increased by around 90% making Hong Kong one of the most expensive places in the world for full cover private medical insurance, and with the financial crisis strangling many companies, business leaders are starting to question how employee benefit savings can be made.
Over 80% of HR professionals renew their company’s medical insurance annually without discussing premiums or cover with alternative providers which ultimately leads to inflated prices and in many cases, reduced levels of cover and service. By negotiating, companies can also take advantage of benefit and service enhancements offered by many insurers. Additional benefits including online claims, cashless direct settlement and cover for pre-existing medical conditions will often be included and should be automatically suggested by insurance brokers.
The study, which evaluated the insurance programmes in place at businesses located throughout Hong Kong, found that dramatic savings could be achieved while maintaining the highest levels of cover and service simply by discussing arrangements with alternative insurance brokers. Mike Ramsay, Client Relations Director at Alliance Insurance Services, said: “Companies that call around can reduce their costs dramatically while maintaining or even increasing their benefits. Brokers that specialise in corporate medical insurance are likely to have agreements in place with insurers which mean they can negotiate the best products and services at the best price. With Alliance, we have even been able to guarantee specific discounts with many of the insurance companies to ensure our clients can reduce their costs easily.”
Greater demands for higher levels of cover and service, increasing medical inflation and mounting pressure to reduce costs has thrown the Hong Kong health insurance industry into a race to exceed the needs of companies.
2009 demonstrated that insurance providers can meet these challenges and saw a variety of product, price and service developments introduced to the market place. Alliance Insurance Services examines what health insurance plans are being implemented by companies in Hong Kong and the products and services that are being made available by insurers.
Hong Kong health insurance benefits
Companies in Hong Kong continue to differentiate benefit levels split by employee grade, however, 2009 saw significant changes in corporate attitude in a number of key areas, these include:
- Home healthcare benefits
- Increased Chinese medicine practitioner visits and cover levels
- Inclusion of routine physical examinations
The following table shows average benefit levels and covers provided by companies with more than 50 employees in Hong Kong. Data is taken from the Alliance Insurance Survey of 250 companies providing local Hong Kong health insurance to employees as an employee benefit.
Executive Plus: senior managers and directors
General Executive: middle managers and specialist employees
General Staff: administrative, support and entry-level positions Additional notes:
Maternity benefits: Cover for routine pregnancy and childbirth continues not to be a priority under corporate health insurance plans in Hong Kong.
Health checks: Routine physical examinations are playing a larger part of the group health insurance plans with many companies seeing them as an opportunity to proactively manage healthcare needs while providing additional cost controlling benefits.
Although local health insurance companies prefer to restrict benefit levels, recent years have seen considerable flexibility from providers in tailoring to the needs of a specific company. It has never been easier for companies in Hong Kong to shop around and make like for like comparisons as most insurers, on the whole, will be able to reflect their existing and future benefit requirements. This ability has placed more emphasis on price and service as the primary decision factor for companies when choosing their provider.
Hong Kong health insurance services
With local health insurance providers demonstrating similar abilities in matching a company’s existing benefit schedule, many have found service provision as a key area to differentiate themselves from the competition.
Certainly 2009 brought with it a number of developments among providers and transformed the way in which the day to day running of an account is carried out. The main area of progression being the development and launch of online facilities that allow both the member and the company to monitor their insurance plans at the touch of a button.
Website facilities have proven a big hit with group administrators and have empowered them to proactively manage their health insurance arrangements. Downloading benefit details, claims reports and premium payments can be carried out without delay and detailed statistical analysis can assist administrators to make informed decisions at renewal.
Table 2 opposite shows services provided from top local Hong Kong health insurance companies.
International health insurance benefits.
Traditionally a preferred option of individual expatriates, global health insurance benefits have gained in popularity among companies not only employing expat staff, but also with senior executive local nationals that carry out overseas assignments or feel local benefit levels do not reflect their medical needs.
With significantly higher benefits and the freedom to choose a medical treatment facility anywhere in the world, international health insurance has always been a tempting alternative to the local national healthcare plans.
In Hong Kong, European style products have been made available to companies, perhaps another British colonial influence. Although providing a full cover payment for inpatient and outpatient medical costs, they have traditionally been of a reactive insurance style, only making payments in the event of a covered injury or illness and have also included significant exclusions within policy wordings relating to congenital, hereditary, chronic and terminal conditions.
Recent years have seen a more proactive health management style introduced to policies with the inclusion of wellbeing, health checks and vaccination benefits coupled with access to chronic condition management and hospice care.
2009 also saw the launch of two Americanised products in Hong Kong for the first time, with Aetna Global Benefits and Cigna International opening their doors to the local market and bringing with them increased benefits which include as standard; congenital, hereditary, chronic and terminal condition cover, cover for pre-existing medical condition and a suite of wellness programmes to cater for high flying executives.
The following table includes details of the standard cover included with three of the major international health insurance plans available to companies in Hong Kong.
International private medical insurers have also been quicker to adapt their terms to market demands influenced by global events and circumstances. Many have loosened their stance on war and terrorism and with the outbreak of H1N1, companies like Cigna International and Aetna Global Benefits have indicated coverage for H1N1 vaccinations under their standard group plans.
Whether it is COBRA compliance, Australian Medicare compatibility, or tailored benefit schedules specific to the demographics of a company’s employees; group health insurance purchasers now have greater choice in the market and have the ability to adapt their insurance purchase to their needs.
Paul Arkwright
Publisher
