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Send  Share  RSS  Twitter  19 Apr 2011

HEALTH: Survey Reveals Trends in South African Corporate Healthcare

 





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The Financial or Human Resources Directors of 150 South African organisations were recently polled on how they managed healthcare benefits within their organisations. Industries covered included resources, automotive, retail, industrial, health, financial services, chemicals, construction, leisure, government, telecommunications, technology, food and beverage and media. All were companies with whom Alexander Forbes Health works closely in developing appropriate healthcare strategies.

“While the results provide a truly interesting snapshot of current South African corporate healthcare benefit practice, the lack of historical data prevents us from identifying the direction of these trends over time” says Butši Tladi, Alexander Forbes Health (Pty) Ltd.

That said:

51% of organisations polled provided a company medical health subsidy while 37% did not. 75% of those that provided a subsidy did this as a percentage of medical aid contributions. 25% of companies provided a flat Rand value across the organisation regardless of the value of each employee’s medical aid spend.

Tladi was surprised that only 25% of companies provided a Rand value subsidy since the future increases on a Rand value based subsidy were far more manageable compared to a percentage based subsidy. “The percentage based subsidy tended to expose companies to medical aid inflation, which was generally much higher than CPI” added Tladi.

43% of companies surveyed offered only one medical aid to clients. 22% offered two, with the remainder, 35%, offering a broader selection. While over 19 medical aid providers were cited, the majority of companies offered their employees either Discovery or Bonitas, usually combined with one other. Only 4% of companies surveyed offered in-house schemes.

Tladi commented that “the tough medical aid environment has led some companies to close down their own restricted medical schemes in favour of participating in the open market.”

42% of the companies that responded reported that participation in the company medical aid was compulsory. In 37% of companies the medical aid was compulsory for selected groups. This means that, an overwhelming majority of companies, 79%, had some form of compulsory participation for a least a segment of employees. Membership of the company medical aid was voluntary in only 10% of respondent companies.

Interestingly, 58% of companies surveyed provided their staff with a gap cover product in the event of a shortfall on their existing medical aid. 42% did not. Certainly “the industry’s legal victory to continue offering gap cover products has lead to new products entering the market and one expects this trend to grow” says Tladi.

In addition, 52% of companies returning data provided post retirement medical cover while 25% did not. Either way, Tladi adds that “the majority of companies that had provided post retirement medical cover in the past are now moving towards limiting cover - with new employees generally not eligible for this benefit.”

31% of respondents reported that their companies had established wellness initiatives in place. 44% had no wellness initiatives while, surprisingly, 25% of respondents were unsure.

Alexander Forbes Health will use this data as a baseline benchmark to update trends annually from now on. For the meantime, findings confirm Alexander Forbes Health’s view that companies continue to view healthcare as a leading employee benefit.

As such, “a well structured health care benefit contributes immensely to the value proposition that an organisation offers it employees” concludes Tladi.


 
 
 
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