The Future of Corporate Health Insurance: Trends and Predictions

As the healthcare industry undergoes exponential transformation, corporate health insurance has been reinvented to adapt to the changing landscape. Technological advancements, shifting demographics, globalisation, and rising costs in medical inflation are all factors that insurers must consider when designing plans. Understanding current trends is essential for businesses seeking competitive benefits that can withstand disruptions.

The Pressures of Rising Healthcare Costs

Healthcare costs have consistently outpaced general inflation globally, exacerbating financial pressures. The issue is expected to intensify in the coming years. According to Mercer Marsh Benefits’ Global Insurer Survey Report 2023, medical inflation in Asia forecasts are projected to hit 11.5% in 2023, driven by increased cost of medical care, greater healthcare utilisation, and late-stage diagnosis of illnesses.

Romain Di Meglio, the Regional Chief Executive Officer of APRIL International in Asia, emphasises businesses' financial challenges. Di Meglio states that "rising healthcare costs pose significant financial pressures for businesses, impacting their bottom lines over time. Some companies have implemented complex benefit changes to mitigate these challenges and shifted a portion of healthcare spending onto employees. Some employers may also feel forced to switch to lower-cost alternatives, which scale back coverage levels of benefits. The behavioural aspects are unfortunately often forgotten. We believe that raising awareness of the challenges which surround access to healthcare is a key part of a positive evolution for the industry. Acting when people are about to be hospitalised or focusing on fast-tracking claims is not enough. We have a bigger role to play in accompanying our clients throughout their healthcare journey. It starts when they consider their options for accessing care, sometimes before they even contact us or our distributors!”

Di Meglio continued, “As an insurance company, our mission is to collaborate closely with medical providers and policyholders to curtail inflation, ensuring premium stability in the years ahead. By working together across all sectors, we aim to make healthcare accessible and affordable for everyone in this community.”

At the employee level, medical inflation may translate as a downgrade in their health insurance plan or benefits, restrictions on their network of healthcare providers, or the introduction of cost-sharing options. With benefits failing to keep pace with escalating medical costs, households devote a growing share of income towards healthcare expenses.

A Technology Revolution in Corporate Health Insurance

Digital disruption is revolutionising corporate health benefits by expanding telehealth, AI applications, predictive analytics and more. The COVID-19 pandemic has accelerated telehealth adoption beyond expectations. A recent study by Harvard Business Review found that telehealth makes care more equitable and accessible to 78% of adults globally who own a smartphone, including those in medically underserved communities.

Telehealth has now become a prerequisite for many insurance offers. Insurers may opt to directly cover costs for telehealth provided by clinics or external partners. Alternatively, they can set up partnerships with telehealth providers to offer these services to employees.

APRIL International has experienced rapid telehealth growth since launching the service in 2020. Usage increased 86% between 2020-2022, and projections show a potential 418% rise from 2020 levels by the end of 2023. As seen through APRIL's experience, accessibility drives higher adoption and utilisation of telehealth over time.

In the realm of corporate health insurance, telehealth brings several advantages. Firstly, it offers convenience for employees by eliminating the need for travel and reducing wait times associated with in-person visits. Employees can easily connect with healthcare professionals, schedule call appointments at their convenience, and receive timely medical advice. For expatriates or employees living in more remote areas, telehealth provides access to medical experts they may not find in their local area or language. They can receive extra support when facing a medical situation abroad or in a foreign language. Secondly, telehealth consultations are often more cost-effective than traditional outpatient consultations, leading to potential cost savings for insurers and companies.

A Growing International Footprint

Globalisation and the growing mobility of multinational workforces are critical drivers of demand for international health insurance. As companies operate globally, ensuring consistent medical coverage worldwide becomes essential.

For employers with employees stationed across borders, an international plan streamlines administration compared to separate local plans and provides equal health benefits for all employees. Flexible working arrangements amplified by COVID-19 further increase mobility needs. Business travel, international assignments, and digital nomadism require portable overseas coverage.

International plans provide valuable benefits. They offer continuous protection when moving countries, simplified management through one policy and guaranteed care access abroad. For companies, global coverage supports recruiting and retaining top international talent by ensuring that health and well-being won't be disrupted if stationed overseas temporarily or permanently.

The Trend Towards Personalisation and Customisation

Employee expectations are shifting, resulting in a growing demand for personalised and customisable health insurance options. Companies recognise the importance of offering personalised plans that allow employees to tailor their coverage to their specific requirements. This trend towards personalisation brings numerous benefits for both employers and employees.

Personalised health insurance plans may allow employees to choose coverage options that align with their circumstances. Customisation enables employees to add additional benefits, or tailor their plans to suit their needs. This may include offering a choice between different plan types or adding extra coverage as voluntary add-ons, such as additional overseas coverage or dental benefits. This level of flexibility increases employee satisfaction, engagement, and overall well-being by better addressing each individual's unique healthcare situations and priorities. Employees can sculpt a plan that most appropriately meets their families' evolving needs.

Moreover, personalised plans promote better health outcomes. Companies can support preventive care, early detection, and targeted treatments by offering coverage that addresses employees' specific health concerns. This also includes having personalised wellness programs as part of the health plans tailored to employees' needs and interests, such as fitness programs, smoking cessation assistance, or stress management resources. A proactive approach helps mitigate risks, reduce healthcare costs in the long run, and improve employee productivity.

Alistair Dickman, Head of Business Development of APRIL International, emphasises the significance of personalisation. Dickman states that "personalisation and customisation in health insurance options are essential to meet the diverse needs of employees while optimising company resources. Through consultation, we work with insurance brokers and their corporate clients to design tailored coverage plans within their budget that increase workforce satisfaction and outcomes. Whether individuals require additional overseas coverage, benefits or choice in plan types, APRIL aids in crafting options which demonstrate employer support for comprehensive care while efficiently allocating healthcare expenditures. This approach benefits both companies and employees."

Transparency is Paramount

Transparency is crucial for employers and employees to make well-informed healthcare decisions in today's complex insurance landscape. For employers, transparency allows more informed comparisons of options to identify the plan best meeting needs and budget. Transparent costs and benefit structures facilitate understanding trade-offs like lower premiums versus higher out-of-pocket responsibilities. Providing claims reports and future projections grant financial visibility to aid budget planning and management over time. Organisations gain a complete view of healthcare expenditure trends and costs.

For employees, readily accessible benefit illustrations presented in simple terms promote comprehension. Clear communication through onboarding assistance from brokers or insurers ensures optimised utilisation.

Further, educating employees on coverage terms and available network providers can prevent the overconsumption of expensive healthcare facilities. This avoids premium hikes employers may otherwise pass to members through mechanisms such as benefits downgrade or the addition of cost-sharing options.

The Continuing Value of Insurance Brokers and Consultants

Navigating the complex health insurance landscape requires specialised expertise. Brokers and consultants play a critical intermediary role between insurers and businesses. Their in-depth market knowledge and experience can help companies overcome administrative burdens and costs of researching, procuring and managing health plans in-house.

Brokers and consultants conduct thorough needs assessments to fully understand a company's requirements. This involves employee demographics, desired benefits, budget, and risk appetite.

Armed with needs profiles, they facilitate objective plan comparisons by illuminating key differences in pricing, coverage, networks, provider quality and customer service. Brokers help with cost-benefit trade-off analysis and policy selection optimisation.

Beyond the initial setup, ongoing support includes consulting on annual renewals, claims management assistance, and addressing employee queries. This valuable ecosystem of expert guidance supports clients seamlessly through industry shifts.

By leveraging broker competencies, companies access well-researched, fully compliant healthcare solutions aligned with dynamic business goals while minimising internal resource expenses long-term.

The Future of Corporate Health Insurance

An array of trends and opportunities shapes the future of corporate health insurance. Rising healthcare costs continue to exert financial pressure on businesses, resulting in benefit changes and increased out-of-pocket costs for employees. However, amidst these challenges, promising technological advancements such as telehealth and artificial intelligence offer cost-effective and personalised solutions.

The expanding international footprint of companies necessitates adopting global coverage to cater to a mobile workforce. Personalisation and customisation have emerged as critical factors in meeting the evolving expectations of employees and improving overall health outcomes. Additionally, transparency remains paramount, empowering employers and employees to make informed decisions about their healthcare options.

Insurance brokers and consultants are vital in navigating this evolving landscape, offering their expertise and support. By embracing these emerging trends and leveraging the knowledge and assistance of intermediaries, businesses can effectively adapt to the changing healthcare landscape. Through this approach, they can provide comprehensive and tailored health insurance options that meet the diverse needs of their employees.