Employers need to do more to communicate the value of private medical insurance (PMI) benefits as employees do not appreciate the true cost of the benefit, according to the Watson Wyatt 2005 Healthcare survey.
The results reveal one-in-three employees would not continue with PMI cover if their employer withdrew the benefit.
Some 42% of employees polled were found to have no idea or only a vague estimation of the cost to their employer. Employees currently provided with PMI by their employer estimated an average cost of £451 per year. However, figures from the Association of British Insurers (ABI) show corporate policies cost an average of £561 while personal policies can cost £1,000.
David Cross, head of healthcare and risk at Watson Wyatt, said employers should explore with staff the types of coverage available and the cost implications of not having the benefit.
Just 37% of employees polled in the survey said their employer communicated medical benefits well, compared to nearly 50% who were satisfied with the pensions communication they received.
Despite the low perception of PMI costs among staff, 74% of the 250 employers polled in the survey said they provide a PMI package to form part of a competitive benefits offer.
By contrast 32% of employers polled said the least important reason to provide the benefit was to reduce employee sickness absence.
For more information contact David Cross at Watson Wyatt on 020 7227 2415