Analysis: Benefit duplication

The growing trend for added value benefits means that employers with cash plan, PMI and group risk schemes in place can often find themselves paying twice for the same service, as Sam Barrett reports

With health insurance providers keen to stand out from the competition, added value benefits such as online health information and employee assistance programmes (EAPs) are fast becoming the norm. Add to this the benefit overlap between products, and employers can soon find themselves paying two, three and even four times for some elements of cover.

“It’s not good,” says Wayne Pontin, director of Jelf Employee Benefits, the intermediary. “This can be fairly common with EAPs in particular. A lot of the income protection [IP] providers have built them into their plans and you’ll also find them on cash plans and medical insurance. It does make duplication an issue.”

For example, among the group IP insurers that include an EAP as a standard part of the package are Aviva UK Health, Canada Life, Friends Life and Unum. Including an EAP is also common among the medical insurers, for instance Aviva has a stress counselling helpline as standard on its plans. EAPs are also included on corporate cash plans, including those provided by Westfield Health and Health Shield.


The inclusion of all these "free" benefits is something that irritates Mike Izzard, managing director of Premier Choice Group.

“They’re window dressing: you won’t get a reduced premium if you ask a provider to remove its EAP,” he says. “The providers bundle them in to make the product look better and this can cause confusion for clients. Rather than add these freebies they should really focus on the core benefits that employers want.”

For Pontin, part of the problem arises from the silo mentality that exists around advice.

“Duplication can easily occur when you have one adviser looking at medical insurance and related benefits and another looking at group risk," Pontin says. "Employee benefits consultancies can take a more holistic view.”

He blames the Financial Services Authority (FSA) for creating the divide, and in particular the classification of medical insurance as general insurance rather than a financial services product.

“There should be a separate healthcare classification that incorporates all of these products," Pontin argues. "That would make it much less likely that an employer would end up with two ‘free’ EAPs, one recommended by a medical insurance adviser and the other by a group risk adviser. The regulator has created this problem.”  

Some providers do recognise the frustration that duplication can cause. For instance PruHealth offers an EAP as an option on its group medical insurance scheme as does Simplyhealth on its Simply cash plan.

Howard Hughes, head of employer marketing at Simplyhealth explains: “Companies can have EAPs independently or through other products so we made it an optional module rather than part of our core cover. We also separated out other benefits including hospital benefit and a new child payment as they could be included within other products.”


But while Simplyhealth has taken steps to avoid some duplication, cash plans are probably the number one offender when it comes to offering benefits that can be found on other products.

Take Simplyhealth’s core cover as an example. This includes consultations, scans and therapies such as physiotherapy, which are available on medical insurance, as well as dental benefit, which could be included on medical insurance or a stand-alone dental insurance scheme.

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