4 November 2013 Performance and Resources Board 10 To consider Benefits Review Issue 1 At its meeting on 1 May 2012, the then Resources Committee agreed that we would review our staff benefits. We engaged Mercer Human Resource Consulting to support us with this work. 2 This paper is to provide the Performance and Resources Board with our proposed direction of travel for our staff benefits and to note the options relating to private medical insurance. Recommendation/s [amend for singular or plural] 3 The Performance and Resources Board is asked to: a Consider the options relating to private medical insurance. b Agree the proposed new benefits set out in paragraph 18(a c)
Benefits Review Issue 4 Our existing staff benefits package consists of private medical insurance, health screens, employee assistance programme, childcare vouchers, cycle to work scheme, season ticket loan, and annual leave. 5 As part of the benefits review we held a number of staff focus groups to talk to staff about their benefits and what they value. No significant changes were made to benefits during 2012, but it was agreed that further work would be carried out in 2013 with a view to looking at how we could provide a greater focus on wellbeing, more flexibility on benefit choice, and how we can communicate our benefits so that staff can make informed choices. 6 Directors have previously discussed and broadly endorsed the changes proposed in this paper. 7 One of the key themes to come through from the staff benefits focus groups, and also the staff survey, is wellbeing. This is an increasingly important aspect of staff benefits in many organisations. 8 We therefore propose a move forward to brand our benefits in a different way, with a focus on wellbeing. We have a number of benefits which directly link to wellbeing and we plan to promote them as part of our overall wellbeing package, but the exact structure would need to be determined following consideration by Council in 2014 of our private medical insurance benefits. The wellbeing work stream has recommended that we develop a wellbeing strategy and that during the course of 2014 we hold a wellbeing week where we raise awareness of some of our benefits that relate to this work. We will also be developing a toolkit and some training for managers on supporting health and wellbeing needs. Private Medical Insurance 9 We have had private medical insurance since 1997. Our current spend is 197,790. We have worked extensively with our provider, AXA Private Patients Plan Healthcare, over the last few years to contain costs and have seen significant reductions in our premium as a result. The most recent renewal terms resulted in a 30% reduction in the annual premium. 10 As an organisation we are able to offer staff a high quality private healthcare package at relatively low cost per employee (currently 347 per year). These costs would not be achieved if individual staff were to directly purchase a similar package with a medical insurer. The approximate cost of a comparable package as an individual would be between 3,180 and 5,479 per year depending on age. 2
11 The provision of private medical insurance is seen as a valuable benefit to provide staff, and links to supporting wellbeing. We continue to enjoy low levels of absence and private medical insurance has contributed to supporting key staff return to work more quickly. 12 There has however been some negative media coverage about our provision of this benefit, together with about a dozen letters or emails of complaint from doctors or members of the public. 13 These issues will be reported to Council for review at its meeting on 25 February 2014. 14 Options for the provision of private medical insurance are outlined below. Retain Private Medical Insurance 15 If Council decides to continue with private medical insurance we have several options: a Continue with the provision of private medical insurance on similar terms to those currently in place (i.e. as a core benefit, available to staff members only, with an excess in place and using the pathways model). b Similar terms to those currently in place, but with the option of extending the provision for staff to purchase additional cover for their partners or families. This poses a risk that our claims fund would increase and this could have an impact on our premiums moving forward. It is however something that came out of the focus groups on staff benefits. c Offer two levels of cover; one on similar terms to our current private medical insurance and one with a lower level of cover but a smaller or no excess. This could address feedback that we have had from staff about the excess being too high. Discontinue private medical insurance 16 We will need to consult with staff if private medical insurance is discontinued as it is a contractual benefit due to the length of time that we have had it in place. We would also need to issue sufficient notice of the benefit being removed and would need to compensate or provide an alternative benefit to staff. 17 If we were to discontinue private medical insurance, some of the options might include: a We buy out private medical insurance. This would be a cash payment which could be added to salary, be paid as a one-off sum, or used for alternative benefits. A cash figure would need to be determined and would be subject to consultation. There are no definitive guidelines to help determine this 3
sum, but a figure of 2 x current annual cost would be a sensible planning assumption at this early stage. It should be noted that the cost of the benefit is significantly below the value to many employees. An agreed buy out amount would be payable to those in the scheme at the time the decision is taken to remove the benefit. We currently have two-thirds of our staff as active members. b The provision of an alternative more targeted healthcare provision which focuses on the two most common health problems muscular/skeletal and mental health. As this is likely to be a cheaper option than our current provision of private medical insurance, we could supplement it with some other health related options including wellbeing days, which might include: mini health checks, flu jabs, stress, weight or stop smoking workshops. 18 Wellbeing is an area of growth which commercial organisations are responding to by providing sessions to focus individuals on their health. If we decided to withdraw private medical insurance and move to more targeted wellbeing days, we could investigate a range of options and seek feedback from staff around what they would find most valuable as part of any formal consultation process. New benefits 19 During the focus groups we had feedback from staff about some additional benefits they would value. We are therefore proposing to enhance our benefit provision with the following additional benefits: a Buying/selling annual leave. This would be a relatively straight forward option to offer which we could introduce for 2014. We are proposing introducing the option of buying or selling up to three days annual leave with a view to potentially moving to a maximum of five days if the scheme is successful after 12 months. b Career development loans: We would like to introduce the option of GMC career development loans to cover course fees up to a maximum of 2,500 in a given tax year. The loans would cover formal courses and would help support longer term career development and provide additional support beyond our current Study Support policy which would remain in place. c Affinity Scheme: Another relatively simple benefit option that we could introduce during 2014 is Affinity benefits. These consist of a range of discounts that suit individual lifestyle. These are currently available to staff that have signed up for childcare vouchers. We could extend this scheme, or introduce a similar scheme, to all staff relatively easily. This would enhance our benefits package at relatively little cost to us as an organisation. 4
Supporting information How this issue relates to the corporate strategy and business plan 20 Private medical insurance is one of our core benefits and is therefore budgeted for each year. If we discontinued private medical insurance and decided to buyout the benefit this may have budget implications in the first year. 21 If we replaced private medical insurance with alternative provisions there would be no additional resource implications as this would be covered by the money currently in the budget. 22 If we introduced the new benefits outlined in this paper there would be some additional costs, particularly around the Affinity benefits. Initial indication of costs is 3.00 per person, plus start-up costs of 2,500. What engagement approach has been used to inform the work (and what further communication and engagement is needed) 23 A number of focus group sessions have been held with staff to establish their views of the current arrangements. If we do not retain private medical insurance we will need to consult with staff. Any changes to the provision of staff benefits will need to be communicated effectively to staff. What equality and diversity considerations relate to this issue 24 Any changes to the provision of private medical insurance would be considered from an equality and diversity, with particular reference to staff with long term medical conditions. If you have any questions about this paper please contact Andrew Bratt, Assistant Director Human Resources, abratt@gmc-uk.org, 0161 923 6215. 5