6 things to consider when obtaining and managing small business health insurance
Did you know? 95% of businesses in Dubai are Small & Medium Enterprises (SMEs). In fact, over 135,000 enterprises in the Emirate have 100 or fewer employees; leading to a low average employee count of 9.1. And, as of the beginning of 2017, all these small enterprises, including startups, have since been required by law to obtain compliant small business health insurance.
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In this candidate-driven market, employers in Dubai are increasingly recognizing the importance of offering competitive group health cover that exceeds the minimum coverage requirements set out by Health Insurance Law. But here’s the rub: while that’s all well and good for large corporations with robust balance sheets, offering comprehensive health insurance perks becomes a tad more difficult for small businesses trying to compete for the best talent.
That said, small businesses can still compete effectively by offering employee benefits that are targeted and desired. Read on to learn the key factors small businesses in Dubai should consider when securing and managing group health insurance.
1. Secure small business health insurance from a stable insurer
Let’s face it: we all want to save money. This is particularly true for small businesses operating on razor thin margins, and in increasingly regulated environments. While it might be tempting to buy the cheapest small business health insurance, it’s likely not conducive to the best-fitting plan, or the most stable insurer.
This was discussed in one of our recent articles; we’ve witnessed situations in the past where less established insurers have tried to lure clients with enticingly low premiums, only to drastically increase premiums the following year to make up for their initial losses. With this in mind, it definitely pays to look for an insurer with a good reputation for steady premium increases.
2. Beware of the “pre-existing condition trap”
If you’ve secured small business health insurance in the past, you’re probably aware that such policies will require small groups (usually companies with an employee count of 10 or less people) to be underwritten differently compared to larger groups. In particular, plans for small groups will require all policy members to be underwritten; this is due to their relatively narrow risk pool.
Because of this, insurers will usually charge a higher rate to cover members with pre-existing conditions, which is mandatory by law. Related to the above point, less established insurers may lure clients with low premiums, only to increase premiums to unaffordable levels when a member develops an expensive condition during the policy period.
We call this a “pre-existing condition trap” because, in such a scenario, it would then be near impossible to switch insurers, as any serious conditions developed previously would be underwritten and charged by the insurer at a higher rate.
3. Evaluate your employees’ needs
As noted in the introduction, one must offer targeted and desired employee benefits to compete effectively with other employers. The makeup of employees is constantly changing; for example, more and more millennials are entering mid- and senior- management positions.
Several studies have found that this particular demographic has different expectations when it comes to group health insurance benefits. For example, millennials value flexibility, convenience, and the use of technologies, leading to a growing number of companies integrating online portals, mobile apps, and online diagnosis into their corporate health insurance offerings.
Offering plans that are not aligned with your employees can lead to very costly outcomes. For example, an employer might splash out on extensive wellness and international health coverage benefits, only to have them be underused and equate to money being flushed down the drain. One tip for understanding employees’ needs is to look at your company’s past claims data, which can shed light on the most commonly utilized benefits, the average number of claims by individual, etc.
4. How do I contain costs?
To ensure that your small business health insurance plan is sustainable in the long term, you’ll want to consider how to ensure it remains cost-effective amidst fast-rising health coverage costs in the region. As an expert in all things corporate insurance, Pacific Prime Dubai knows that there are a number of “levers” to pull to ensure the long term sustainability of small business health insurance. Such tactics may include:
- Liaising with insurers in regards to claims history,
- Altering or reducing benefits,
- Switching insurers or plans,
- Altering provider networks,
- And more
5. Communicating benefits
So, once you’ve implemented your small business health insurance plan, how can you ensure that your staff will use it properly? In our experience, communication is an essential component to any corporate health insurance plan’s success.
When your staff are kept in the loop and educated about the coverage benefits they have access to, you’ll find much better engagement with the solutions you’ve offered. Plan administration also becomes easier, and satisfaction will likely be elevated too.
There are many ways to keep your staff informed of the benefits available to them. Popular benefits communication channels include orientations, Q&A sessions, web portals, company intranets, e-mails, etc. Working with a leading broker, like Pacific Prime Dubai, can make communicating benefits much easier for you. Not only do we provide orientation sessions at no extra cost, we also assign an account manager for each client so staff members can have a dedicated point of contact that answers all their questions.
6. Partner with a broker
Given that small business health insurance plans are more varied than ever before, devising, implementing, and managing solutions have become more and more complex for HR practitioners and business owners; so much so that many businesses – especially smaller ones with limited resources – don’t even know where to begin. Fortunately for them, there are full-service brokers, like Pacific Prime Dubai, that specialize in small business employee benefits.
The Pacific Prime Dubai difference
Pacific Prime Dubai prides itself on its superior service, which goes far beyond simply finding the best plan for your company’s needs. As a full-service broker, we offer the following services at no extra cost vs going direct to the insurer:
- Premium negotiations
- Claims history analysis
- Ensuring your plan is compliant
- After-sales support (e.g. claims, answering enquiries, renewals)
- Communications assistance
- Assessing your company’s needs
- Ensuring your benefits are competitive against the market
- And many more
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