It’s no secret that health insurance premiums around the world are rising above general inflation levels. And that is especially the case here in the United Arab Emirates.
In our Global Medical Trends Survey 2016, we shared our forecast that gross premiums in the United Arab Emirates are expected to increase 15 percent this year for the third year in a row.
In Dubai, the rule that mandatory health insurance for employees must include all previous illnesses contributed to an increase.
While the ever-evolving market can make it difficult to track health insurance inflation, it is likely to be well above the 9.5 percent in 2015.
Against this background, it is becoming more and more important that your employees understand how to handle your health insurance responsibly in order to avoid unnecessary cost increases.
This is how you avoid rising costs
For many companies, the rising cost of employee health insurance can prove unsustainable, leading some to cut their insurance coverage. But that’s probably a bogus economy.
Providing competitive advantage is an important factor in employee engagement. According to insurer MetLife, an improved benefit package would attract 53 percent of people in the UAE who are considering moving to another company to stay. Cutting a critical benefit like health insurance is likely to have the opposite effect; Demotivating employees and making them look elsewhere for opportunities.
There is also a risk that the health of employees will be affected by the restriction of their health care, resulting in a decrease in productivity.
Another option is to increase the percentage employees have to pay for every treatment they receive, but this is a potential minefield. If you are a Dubai resident, you can only request co-payments from employees that cover up to 20 percent of the cost of outpatient treatment, 30 percent of medication and 10 percent up to a maximum of Dhs 500 per visit and Dhs 1,000 per year for inpatient treatments. In particular, you face legal action if you deduct part of the premium for basic employee insurance from your wages.
The case for health insurance education
Training your employees on how to use their health insurance responsibly is therefore a positive – albeit less direct – way of reducing healthcare costs. Your bonus for the next year is calculated taking into account the demands of your employees in that year. So, if you can encourage your employees to make good use of their coverage, it should help keep the price down. But what’s the best way to do it?
If you have not yet received a detailed breakdown of your employees’ health insurance claims, I strongly recommend that you provide them to your advisor on a quarterly basis, depending on the scope of insurance. They may also be able to help you analyze the data to identify patterns of behavior that could lead to an increase in the premium over the next year. This information will help you plan tailored training courses, including practical guides on how to get the most out of the services available.
This could take the form of regular workshops for small groups of employees, perhaps on a team basis. In a smaller group, people are more likely to stay engaged and ask questions, which maximizes the chances that everyone will leave with full understanding. Training on how to use company health insurance during the onboarding process would also make sense for all new employees.
Some key points to include in any health insurance education:
1. Understand the financial implications of your health insurance: Employees should understand that increased usage leads to increased health premium costs, which affects the company’s bottom line and ultimately its competitiveness. While the health of the company has an indirect impact on its employees, it should be noted that there can also be a direct impact on any co-payments made by employees.
Some of the vendors currently operating in the UAE have invested in technology to improve claims management, particularly to combat overuse and abuse. Raising employees’ awareness is intended to encourage them to use their insurance cover wisely and to consult their doctor if the insurer does not consider a certain medical service or treatment to be medically indicated.
2. Ask about generics: Instruct your staff to ask about the generic version of any medication they are prescribed. According to the US Food and Drugs Administration (FDA), generics can be up to 85 percent cheaper and are equally effective. This is reflected in the high rate of generic prescribing in the US – at least 80 percent according to the FDA.
However, generic drug use is believed to be much less in the UAE as pharmaceutical company Ayva Pharma reports that only 5 percent of the drugs used in some hospitals are generic. This topic was discussed at the MENA Health Insurance Congress 2016. Experts concluded that a major overhaul was needed to convince doctors in the UAE to prescribe more generics, which could translate into estimated savings of 30 percent, equivalent to Dhs 2.3 billion a year.
Asking employees to specifically request generics can help promote this trend and keep costs down.
3. Do not use the emergency room as first aid: Make sure employees know they can only go to hospital for emergency treatment in a real emergency.
This not only relieves the emergency services for their proper purpose, but a visit to a basic care clinic will also be considerably cheaper than a trip to the emergency room.
4. Visit your family doctor first: In the United Arab Emirates, people are free to book an appointment directly with a specialist who they think is most relevant. However, this can be a costly mistake if it turns out to be the wrong specialist.
Make sure your employees know that the first point of contact should always be a family doctor. If the family doctor thinks a visit to a specialist is necessary, he can arrange a referral to a suitable specialist. In some cases you may not have to go to a specialist at all, and the costs for the family doctor are significantly lower than for the specialist.
5. If possible, use a virtual doctor service: Some health concerns may not require personal advice at all. A growing number of providers in the United Arab Emirates are now offering virtual consultations with qualified doctors, either by phone or online with video.
Your insurance advisor can help you set it up with a reliable service so that you can offer your employees the option of virtual advice in the office or from home.
6. Ask if tests are necessary: In a survey by the United Arab Emirates’ Ministry of the Interior, Magazine 999, around 28 percent of respondents said they thought doctors submitted them for diagnostic tests that they didn’t need to increase revenue.
Of course, we all like to believe that doctors care about our well-being, but with that in mind, it may be worthwhile to politely ask staff whether all of the tests recommended by doctors are actually necessary.
7. Use the wellness training: In addition to targeted training on how to use health insurance responsibly, it makes sense to train your employees to adopt a healthier lifestyle. This two-pronged approach is likely to have a greater impact on reducing your rewards.
If your analysis of previous claims reveals a prevalence of certain lifestyle-related health conditions, such as type 2 diabetes or cardiovascular disease, you may want to consider organizing targeted health awareness sessions or other interactive programs.
There is a great deal of truth in the old adage “prevention is better than cure”.
So wellness training would be a worthwhile investment. In the long term, it should help improve the well-being of your workforce, reduce sick days, increase work productivity – and ultimately lower health insurance claims.
Stephen MacLaren is Regional Head of Distribution, Human Capital & Benefits at Al Futtaim Willis