The term 'aging workforce' is not only being used more regularly today, but is likely to see its usage increase further in the years ahead, as the population grows and thoughts on retirement change.

Just as an example, the pandemic altered the face of the NHS, with recently retired medical professionals coming back to work to help their colleagues during an unprecedented crisis. Three years on and with vacancies still growing, the focus has now shifted to actively persuading retirees back to work, as highlighted within the recent Budget announcement

The health service is not the only sector trying to re-hire older workers to help fill their staff shortages, and the ongoing cost-of-living crisis is likely convincing more people to return to work in older age.

With all that in mind, looking after older employees health has never been so important. Private Medical Insurance (PMI) is becoming more of a necessity rather than a 'nice to have' to keep employees healthy and able to work.

One of the common barriers of providing PMI to an older workforce is the cost of it. It seems counterintuitive given the focus on preventing age discrimination. However, it is unfortunately a fact that the older you are the more likely you are to need complex medical assistance, and the more complex the condition, the more expensive it will be to treat.  

But there are ways you can manage the cost of PMI for this employee population. 

1) Understanding your company demographic

It may seem obvious, but do you really understand the healthcare needs of your workforce? Do you have a grasp of how different age groups have different needs? How healthy are your employees really? Understanding this is key to developing plans to meet your employees’ exacting needs from PMI, no matter their stage of life. 

A wellbeing survey, that asks a series of questions around both physical and mental health, can give you a fuller picture of what your workforce needs.

2) Early intervention

In order to manage the cost of treating any condition, the key is to catch it early. The vast majority of group risk and healthcare protection providers now offer some degree of early intervention benefits attached to their products, whether that be via an Employee Assistance Programme, a Virtual GP, fitness and diet advice or a general healthcare app. These value-added benefits normally come at no additional cost, but their impact is wide reaching, especially with an aging workforce. What's more, using these can save treatment costs that would normally be paid under the PMI. 

An absence management tool is another way to help with early intervention. This system can provide HR with regular anonymised management information, providing a detailed insight into the health of employees – data that could help mould your PMI plan to suit your employees.

A lot of providers now also offer management training. For a condition such as stress or burnout in the workplace, line managers are in a unique position to be able to identify a potential long-term absentee before it happens, and with the right guidance and support they may be able to prevent the situation from escalating.

3) Limiting Private Medical insurance benefits

Another question to consider is whether the PMI plan does what the company needs it to. Private Medical is the one insurance that will be subject to a double-digit increase year on year if it is being well utilised by employees. However, this is simply unsustainable in the long term. One way round this would be to manage benefit levels, including excesses and/or underwriting. 

Limiting hospital access is another option. For once, costs differ wildly across the UK - a hip replacement can cost between £9,000 and £15,000 depending on where the operation is carried out. Many people also research hospitals before making a decision, potentially seeking out expensive hospitals further afield than is necessary. By restricting cover to certain hospitals, within a reasonable proximity to your offices, you can help limit the claims liability, whilst ensuring members have access to the hospitals they need. 

4) Benefit tiering

If restricting benefits is not an option, then you could consider benefit tiering. The company VIP's could be set up on their own benefit level at the top, receiving comprehensive PMI cover, whilst a newly qualified graduate coming into the business may for example only be offered a lower level of cover after two years' service.

This arrangement, in theory at least, weights expenses towards older age groups, who will in general need more cover than those just starting out on their careers. As these entry level employees move up the hierarchy, they will gradually gain more cover as they age. 

An alternative option would be to offer access to a limited cover discretionary medical plan which could provide a more cost-effective solution. 

These steps can help mitigate the ever-rising costs of PMI as the UK workforce ages. By making smart savings in certain places, and making sure your cover is fit for purpose, companies can avoid needlessly high premiums, whilst still providing the cover their workforce needs to stay health and productive. 

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