Pharmaceutical organisation Mundipharma updated its group risk benefits in April 2016, in order to afford its 1,000 employees more flexibility around their coverage while mitigating increasing costs.
Mundipharma provides two group risk benefits: group life insurance and group income protection. Both schemes were redesigned when the organisation introduced flexible benefits in April 2016.
Amy Goodwin, head of reward and wellbeing at Mundipharma, says: “We wanted more flexibility for our people. When we redesigned [group risk benefits] for flexible benefits, we took a look at how we could spend that premium more wisely. [We were] looking to protect the majority, but still maintain choice.”
Originally, the organisation’s group life insurance was linked with its workplace pension, offering staff three times their annual salary and a 25% spousal death-in-service pension. In April 2016, the benefits were separated and employees were provided with a core level of two times their salary, payable as a lump sum. Staff could choose to spend their flexible allowance on increasing their coverage up to a maximum of 10 times their salary.
“We wanted control of what those policies looked like and what they delivered to be more in the [organisation’s] hands, rather than to do with the way that the pension ran,” Goodwin explains. “We were spending money on premiums [that were] being driven by an element that didn’t apply to every single one of our employees.”
Mundipharma took a similar approach to group income protection. Initially, this provided 66.6% of pay, up to state pension age, payable after six months’ absence and provided against the employee’s own occupation.
This was changed to give employees a core 50% of pay, up until state pension age, against their own occupation, payable after 18 months, with the ability to use their allowance to increase the amount received to 60%, 70% or 80% of pay.
Prior to the policy taking effect, Mundipharma self-insures the employee’s first 18 months of absence, striving to help them return. After this time, the benefit adopts a direct insurance model, whereby the employee leaves the business and is paid directly by the provider.
As of April 2018, instead of being paid until state pension age, employees now receive the benefit for five years, with the further choice to increase either their level of pay, the payment term, or both.
To communicate these changes, Mundipharma created personas to demonstrate the available options. These were featured on on-site plasma screens, leaflets and employee websites.
Goodwin says: “I don’t want people spending their flex pot on something they don’t understand and that they don’t think they’re getting value from. That, to me, would be a failure. We probably do spend more time with that hand-holding, education piece. We constantly have to work at it.
“It has to be a mix, because we’ve got to get to the shift [employees], we’ve got to get to the remote-based salesforce and we’ve got to get to the corporate staff who are often travelling quite a lot, so we always have to do it multiple ways.”
As of October 2018, 41% of employees have flexed their group life insurance above the core level, and 29% have done so with their group income protection insurance.