EXCLUSIVE: William Grant and Sons has switched providers of its private medical insurance (PMI) scheme and made adjustments to the new scheme to produce cost savings which it will use to give higher pay rises to its UK staff.
The whisky distiller chose to enter into a tender process to switch providers as an exercise to improve the cost effectiveness of its PMI scheme.
Gary Brewer, head of reward and organisational development at William Grant and Sons, said: “The cost of private healthcare has been spiralling for us.
“This was one effort to try to recover the costs, which are influenced by a number of things: medical inflation, claims history, and the size of the population. We’ve seen growth in all of those categories over the past few years.”
The decision to switch PMI providers was made during the organisation’s pay review process in early 2013. Brewer added: “It raised a couple of possibilities: opting for a lower pay rise or a higher pay rise of 3.2% and a review of the operation of the PMI scheme, designed to introduce measures which would lower the cost of operating the scheme and thus offset the cost of the higher pay rise.
“We had the option of a 3% pay rise and revisiting the PMI scheme in January 2014 or 3.2% and introducing the new measures effective 1 July 2013.”
William Grant and Sons was able to offer the 3.2% pay rise, from 1 April, by introducing measures to the scheme, including an excess arrangement, exclusion of pre-existing conditions, an upper age limit of 18 years for dependent children and a three-month waiting period for new members.
“These measures will also help to halt the spiralling cost of the healthcare scheme for future years,” said Brewer.
The scheme, which is provided by Axa PPP Healthcare and went live on 1 July, is available to all 1,000 UK staff at single cover, with approximately 200 senior-level employees able to include spouses and children.