In Ireland, the theme of double-digit year on year health insurance price increases has continued, as Vhi, Laya, and Irish Life Health have all announced two price increases in 2024. The effect of these increases has left employers facing increases of up to 20% in their health insurance premium, putting a strain on benefit budget management. These increases are driven by the rising cost of claims particularly from the private hospital sector. A recent report from the Health Insurance Authority (HIA) in Ireland has confirmed that claims have increased by up to 15% so it’s not surprising that insurers are keen to pass on this cost to members.
These increases have a direct impact on employees, as higher benefit in-kind reduces take home pay. For employers, many will have only budgeted for medical inflation. This means the rises are up to three times higher than originally budgeted for.
Dealing with the cuts to benefits plans
In addition to the spiralling premium costs, benefits offered on certain plans are being cut. This is forcing employers who would traditionally have automatically rolled over their plan at renewal to take a closer look at their health insurance benefits. Employers are reevaluating their health insurance programmes to ensure value for money and meet employee needs.
Below are some considerations to help ease the pressure of rising health insurance premiums:
Benefit design – Is the chosen plan meeting your employee needs? Should you consider switching certain employees, such as new recruits, or dependent children to different plans? Not all employees need to be on the same plan and may not gain cover from some plans, particularly in the event of emergency treatments. You should put defined eligibility rules in place for your plan and make sure your insurer applies them.
Funding model review – historically the cost of health insurance may have been fully funded by the employer. However, with the costs of health insurance skyrocketing, and no end in sight, you should re-assess this. You may want to set a monetary limit on health insurance premiums through an allowance model for some or all employees.
Assess your health insurance claims – request a claims report from your insurer to review which benefits are being used most and what’s most important to your people. This can help assessing how appropriate your current plan is.
Apply for discounts and waivers – seek maximum discounts and waivers from the insurers to see if this delivers savings or improved benefits.
Switch plan or insurer – with over 350 plans on the market, not all have been hit with the same price increases. Consider the most up-to-date corporate plans as these will make it easier to avoid increases. For those with dated corporate schemes, you may be able to secure better overall coverage at a lower cost and sometimes with the same insurer.
Benefit audit – check that you are not double paying for benefits, such as health screening, employee assistance programmes and company/digital doctors – benefits which often are fully or partially included in health insurance plans.
Seek independent advice – prior to each renewal speak to an adviser who deals with Vhi, Laya, and Irish Life Health to ensure you’re on the most up-to-date corporate plans. This in turn will help you to better manage your healthcare costs.
Lastly, it’s important to note that once you have agreed your approach to renewal it’s important to communicate the benefit to employees to ensure they are getting maximum value and appreciation of plan.
For more information, please visit our People Solutions (opens a new window) page or contact your local Lockton representative.
