To understand what an employee benefits platform is, we need to understand how employee benefits are currently managed – starting off with the most important, medical benefits. Traditionally, there have been two dominant approaches to managing employee medical benefits: corporate health insurance and self-funded benefits by reimbursement.
Corporate health insurance
Corporate health insurance has been the status quo in ensuring that employees have the coverage they need. It’s almost seen as the golden standard for employees. It accomplishes what insurance does – providing a peace of mind. However, there are some drawbacks with this approach. Group health insurance always starts with inpatient General Hospitalisation and Surgical (GHS) policies. In order to provide outpatient medical benefits for GP visits, companies need to purchase an additional rider on top of their GHS plan.
Insurance – from the employee’s perspective:
Their corporate GHS plan may already be overlapping with their existing healthcare plans, which creates redundancy and wastage. For employees who tend to fall sick less, they may also never experience the true value of their benefits. Insurance plans can also be confusing, so they will need to seek HR support frequently and at times, submit claims directly to their insurance provider.
Insurance – from the employer’s perspective:
It’s no surprise that healthcare inflation is on the rise because employers are experiencing it directly in their high premiums. You might be asking: why are my premiums increasing year over year? Or, you may be used to this and see it as the status quo. And of course, you need to commit to the payment upfront. The challenge you face is, you know health insurance is important – but is there another way to better control costs without insurance? For employers who really struggle with providing insurance, they opt to self-fund benefits through a reimbursement model.
Self-funded benefits by reimbursement
Many companies who want to retain better cash-flow and flexibility with their benefits policies choose to self-fund by reimbursement. This method allows companies to have greater control over what they offer their employees, such as outpatient GP and dental coverage, along with wellness.
Reimbursement – from the employee’s perspective:
While this approach does offer more flexibility to employees, there is a high chance that employees will not know what they’re entitled to and therefore not make the claim. Also, since employees are required to pay for their health services upfront, a visit to the GP or dentist can affect their personal finances significantly. There is also the chance that an employee misses the deadline to submit their claims, which can cause a lot of frustration.
Reimbursement – from the employer’s perspective:
There’s no doubt that paying monthly employee healthcare expenses improves monthly cash flow. But guess who’s hurting the most? Your HR. On top of the never-ending list of administrative work for HRs, they also need to reimburse employees the traditional way: going from paper receipts to an excel spreadsheet and then to payroll (some HRs may be using an HR management system for all expenses).
What is an employee benefits platform?
An employee benefits platform is a way for corporations to self fund their employee benefits in an affordable and digitised way. It essentially adopts the flexibility of a reimbursement model within a digital ecosystem that enables cashless claims, real-time data on benefits usage, controlled spending, and makes it easier for employees to locate the care they need – all in one app.
Improvements to the employee’s experience:
Employees no longer need to pay upfront out of their own pocket, worry about adding another card into their wallet, or saving physical receipts. They won’t need to ask HR every time what their corporate benefits plan entails or where the nearest panel GP is from home. Instead, all the information they need is available digitally.
Improvements to the employer's experience:
Allowing employers to set aside a budget per employee has not only helped with controlling costs, but also in retaining cash flow. HRs are also able to use their time more wisely by automating health claims processes. This opens up opportunities for HRs to consider how to better improve employee experiences and engagements throughout the organisation. Understanding that employee benefits should not take a one-size-fits-all approach is key. The experience should enable a great degree of flexibility to allow a customised experience for all employees.
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