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4 common misconceptions about corporate health plans

27 April 2015 - 4:02pm

Not everyone understands what a corporate health plan is for - particularly business owners. While some are reaping the rewards of a carefully crafted policy, others have either inherited one from a previous director or simply avoided engaging with the idea altogether.

Both of the latter parties will not be getting the most out of what is a viable and simple solution for virtually any company in Australia. When optimised, a corporate health insurance policy even offers benefits as far reaching and important as improved hiring rates, better employee engagement, productivity and retention.

That's because people value health, and will stick around at a company if their employer takes an active approach in improving their access to medical care.

So, why are some business leaders still not sitting up and paying attention? We look into four of the common myths and misconceptions surrounding corporate health strategies:

1) Corporate health plans are only for big employers

The term "corporate" can prevent employers from taking the idea of a health plan seriously. The word has connotations of only large companies benefiting from the scheme, which is simply not the case.

Anything from multi-national corporations to small to medium-sized enterprises (SMEs) and individual ABN holders can reap all the same benefits from the initiative. In fact, the results may well prove to be even more effective for those on the smaller scale and with tighter budgets, as we'll explain in our next point.

2) They are too expensive

When it comes to finding the brightest talent, it is difficult to calculate the worth of recruitment and selection. However, when it comes to staff retention, it's easier to put a number on it.

A study by the The Society for Human Resource Management predicts that the cost of replacing a lost employee equates to between six to nine months of that staff member's wage. For example, to rehire a person on a $40,000 per year salary, the company will pay $20,000 to $30,000 in training and recruitment expenses.

For a smaller company, that money is critically important and could be used in whole host of ways to aid growth. However, even a large corporation will see how much an attractive corporate health policy can help keep both their staff and profit margins healthy.

What's more, when we consider that a health plan can be created with a budget in mind, and then tailored to meet on both quality and expense levels, there is little reason not to look into the possibilities further.

3) Setting up a corporate health plan is complex and too much of an administrative burden

This one is somewhat true, though the solution is so simple it still passes as a myth.

While comparing more than 30 health insurance providers in Australia - as well as limited access funds for certain professionals - then weighing them against their price and level of coverage is a time-consuming task, the burden does not have to lie with the employer.

Your health insurance broker can use their extensive industry knowledge to start and manage the plan for you, so you get the benefits without the administrative headaches.

4) Your staff won't really value it

Perhaps the most damaging misconception: What is the point in a business health plan to aid retention and selection if staff don't really appreciate it?

While this query makes sense in principal, there is a massive amount of research that points to the contrary being true. Everyone from Forbes to Entrepreneur have written about the best employee benefit schemes, and each rank a health plan within the most attractive business initiatives.

In fact, one study from Metlife found that 61 per cent of employees who were "very satisfied" working for their employer said they were so because of their company's health benefits.

Importantly, as the cost of private health insurance rises, fewer people are able to access the substantial benefits for themselves and their families. If an employer can either provide some financial assistance towards this, or even take over the costs altogether, there is no reason why that wouldn't have a positive impact.

To discuss your company's health plan, no matter what the size, please contact HICA on 1300 44 22 01 for free and impartial advice.