What are the most common types of employee benefits in Hong Kong?
Benefits are a standard part of most employee compensation packages these days. For businesses looking to attract and retain the best talent in their industry, offering things like leave allowances, flexible working arrangements, and fringe benefits are vital. Employee health benefits are one of the most common, and most important, perks for both employers and employees, but understanding what types of medical benefits to offer can be confusing.
This Pacific Prime Hong Kong article outlines some of the main types of employee health benefits that companies can use to support their talent management strategies.
Why should I offer health insurance to employees?
There’s no hard and fast rule that employers must offer group health insurance and medical benefits to their staff. However, most recognize the power employee health benefits have in talent acquisition and retention. According to an Accenture survey, over 70% of workers questioned stated that employee benefits health insurance was a primary or important factor for continuing to work with their current employer.
Many of those questioned who had had employers withdraw health coverage in their workplaces said that they were dissatisfied with the decision (64%), while others (15%) planned to leave their job immediately as a result. One third of those surveyed expressed less motivation to continue working hard for their employer when employee benefits insurance were ceased.
Similarly for Hong Kong, job seekers also place a high value in the types of employee health benefits attached to a remuneration package. HR in Asia reported that local and international employers in the city were increasingly expanding the group health insurance benefits offered to match the demand of talent. In particular, of the more than 180,000 employees and 650 companies surveyed:
- 59% of companies offered medical check-up benefits, an increase of 14% over the past three years;
- 25% of businesses offered maternity benefits to employees; and
- 70% were extending outpatient, inpatient, and dental coverage to the dependents of workers.
Of course, where your business is in terms of its size and needs has a big influence on whether or not you might need to offer staff medical coverage, and the types of employee health benefits you may want to offer to stay competitive.
Understanding the common types of employee health benefits
Whether you’re looking to design a new compensation and employee benefits insurance package or your company believes it’s time to review its existing arrangements, knowing what types of medical benefits are available can be a good first step. Like most consumer products and services, there are different levels of coverage (ranging from basic to comprehensive) that come with different price tags.
Here are some key types of employee health benefits that businesses across all industries offer:
Standard health coverage
Like health insurance for individuals, employee benefits can be extremely flexible. You can opt for basic inpatient care that covers hospitalization of employees, or extend it to an inpatient and outpatient plan that can cover the costs of things like GP visits and physiotherapy. In addition to this, there are a range of other options that can expand the usefulness of your employer-provided health plan:
- Benefit levels: Benefit levels determine how much coverage will be provided in monetary terms. Plans with higher levels come with higher costs, so finding the right balance for your company is key.
- Dependent coverage: Most benefit plans come with an option to extend equal or partial coverage to spouses and children. This usually comes with a significant increase in premium, but can be a vital part to securing and retaining the talent of high level expatriate executives.
- Area of coverage: Plans can be both local or international in coverage, with international plans offering health benefits outside of Hong Kong. A handy aspect to include if you have staff that travel frequently.
- Provider networks: As a way to control costs, providers can often secure a network of approved providers that group health insurance members can or must seek treatment from to be covered.
- Coverage for pre-existing conditions: One of the significant benefits to employee benefits plans is that it can be easier to include coverage for pre-existing conditions. While it may increase premiums, it can be vital to older staff or employees with ongoing health benefits.
Standard healthcare plans are made flexible to ensure that they’re relevant to businesses of all shapes and sizes, as well as to support different business needs.
Additional health benefits
On top of inpatient and outpatient coverage, additional types of employee benefits insurance can be used to provide more targeted medical support to your staff. All of these come with an increase to your premium but their inclusion can be vital to some companies looking to achieve various employee benefits objectives:
- Maternity insurance: In a city-state like Hong Kong where the cost of giving birth can be expensive, maternity coverage can be a welcome benefit for many – particularly where unforeseen complications arise.
- Fertility treatment: A growing benefit around the world, some companies are beginning to provide support to staff looking to begin a family to foster greater loyalty and commitment in those employees they value most.
- Dental insurance: Dental is not a standard health benefit in either individual or group health insurance, but dental health itself is extremely important.
- Vision insurance: With long times spent in front of computer screens, offering vision benefits can be seen as a great way of recognizing workplace health and safety. Including vision and dental coverage together also means insurers will include additional benefits for hearing and health checks as well.
Again, it should be noted that which of these benefits you choose to include will depend on the needs of your staff and what your company is trying to achieve with its employee benefits insurance plan.
Types of employee health benefits beyond standard insurance
These types of benefits are, perhaps, currently less common than standard group health insurance – however, many businesses are showing a growing interest in the area of workplace wellness. Some of these benefits may be provided by your main insurer however, sometimes you’ll need to find a third-party provider to secure them:
- Health check/immunization: As a form of preventative health, offering check ups and immunizations can help keep your staff from needing to overuse your group health plan – and cut down on things like absenteeism.
- Health and wellness education: Providing wellbeing seminars or having educational resources available in the office can be a good way of empowering your staff to take better care of themselves.
- Wellness programs: Perhaps one of the most popular topics in employee benefits, wellness programs can include anything from gym memberships and dietary consultations to yoga and free fruit in the office.
- Mental health support: As part of the wellness discussion, mental health support and Employee Assistance Programs are part of the growing discussion around the role of businesses in keeping their staff both physically and mentally well.
Hong Kong, in general, may be considered a bit behind in terms of offering extended types of employee health benefits – but there are many well-known businesses leading the way locally. If you’re competing for talent against a company offering extended health and wellbeing benefits, it might pay to review your own package to ensure you can stay competitive.
Is offering employee benefits expensive?
The answer is both yes and no. The overall premium you pay will depend on the types of benefits and level of coverage you want to provide for your staff. The good news is that your employee benefits solution doesn’t need to be a simple case of paying for A and not paying for B. In particular, the option to self insure is something many companies consider in order to provide specific health and wellbeing benefits to those who wish to use it – without paying for access to staff that don’t.
There are also measures like co-pays that can be included in a plan to both influence staff to use their employee benefits and keep your own premium costs down. Instead of paying for a benefit outright, you can elect to have your staff pay an excess or deductible for care to help lower your premium. These can also be tiered to match your various organizational levels, in case you want to offer full coverage to high level executives but introduce co-pays to the general staff.
For many group health insurance plans, you can use a mix of different approaches, benefits, and levels to ensure that you’re offering the type of perks you need to, at a price that matches your budget. When it comes to negotiating these aspects of your plan, the best way of moving forward is to get support from a broker before meeting with insurance providers.
How will COVID-19 impact employee health benefits?
The COVID-19 pandemic will have a significant impact on the design and cost of employee health benefits. According to a recent report by Mercer Marsh Benefits, companies will have to restructure the range of benefits they provide their employees, as well as the ways they deliver them, if they want to keep up with the new challenges introduced by remote working – all while containing rising costs. Examples of employer-provided benefits that employees are looking for post-COVID-19 include:
- Mental health support
- Preventative care
As medical costs continue to increase, businesses will have to focus on the benefits that will have the biggest impact and provide the most value to their employees. If anything, the pandemic will offer companies the opportunity to restructure their employee benefits plan beyond purchasing group health insurance.
Need help structuring your company’s employee benefits?
You’re in luck! Pacific Prime Hong Kong is an established employee benefits specialist, with a 20 year track record for supporting both startups and small businesses, all the way through to multinational corporations and professional service firms. In fact, we’ve even produced a handy guide to Structuring an Employee Benefits Plan that you can download for free, along with our latest Global Employee Benefits Trends Report.
If you’re ready to start discussing how an employee benefits plan can help your company achieve its business goals, get in touch with our expert advisors at Pacific Prime Hong Kong for a free consultation or plan comparison today.