HR Guide to Corporate Medical Insurance Sample

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With 40 years’ experience in the medical insurance industry, Blue Cross recognizes the various needs of employers and employees.

We can tailor our products to meet those needs by providing affordable healthcare benefits with flexibility to suit your business and that your employees will value. We offer: Health coverage solutions designed for companies ranging from 3 to thousands of employees, including comprehensive plans for senior executives and expatriates Prompt settlement of outpatient and inpatient claims within 7 and 10 working days No pre-payment for admission to and discharge from a local private hospital Extensive network with over 1,000 medical centres and clinics in Hong Kong Access to a network of over 200 hospitals and medical units in China without prior deposit Free professional advice on pre-hospitalisation fee assessment and arrangement by medical experts Optional voluntary “top-up” scheme for employees and their families at privilege rate

For more information, speak to one of our account managers, who will work with you for a tailor-made package that fits the needs of your company.

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Employee Benefits Hotline: 3608 2850/3608 2851

Website: www.bluecross.com.hk

Foreword |

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Employee benefits, if appropriately and effectively adopted, will be a powerful tool in motivating and engaging staff. Corporate medical insurance is one of the common measures introduced within organisations in Hong Kong. With an ageing population and escalating medical expenses, healthcare provision is expected to be a key matrix for employee benefits. The HR Guide to Corporate Medical Insurance jointly published by HR Magazine and Hewitt Associates is a practical guidebook for all HR practitioners. It provides a comprehensive overview on the current practices in the market and valuable insights on the future trend.

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Louis Pong

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CEO Employers’ Federation of Hong Kong

Publisher & Editor-in-Chief

Paul Arkwright

Enquiries

Editorial Enquiries

Marcel Chambers

Paul Arkwright Tel: (852) 2736 6318 Fax: (852) 2736 6369 paul@excelmediagroup.org

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Robert Blain, Rebecca Elder

Kollin Baskoro Tel: (852) 2736 6339 Fax: (852) 2736 6369 kollin@excelmediagroup.org

Consulting Partner

Hewitt Associates

Commissioning Editor

Layout Editor

Malou Ko Staff Writers

Byron Bain, Lily Heyland Contributors

Robert Allen, Paul Colley, Susan DeGregorio, Luzia Hung, Brock Judiesch, David Moo, Louis Pong, Mike Ramsay, Carl Redondo, Audrey Tsui

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Preamble |

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We found that according to the HR managers surveyed, private healthcare has gained increasing significance to achieving a company’s business goals. Also notable is that increasingly HR directors are choosing policies based on the coverage of claims as well as the size of the provider network as opposed to cost alone. The full survey is included in this publication in this complete guide and also on HR Magazine online.

We also cover the perspective of insurance providers. We interview two such providers and learn more details of the market and issues they are facing.

Many providers established in the US market are increasingly pooling resources in Asia as uncertainty continues in American healthcare reform. One trend in Hong Kong has been an increase in the size of medical provider panels and the collaboration of these networks with insurance providers.

Also important for HR is that there are many steps that can be taken to make coverage more efficient and cost effective.

Finally, we give a brief overview of the key group health insurance providers in Hong Kong to give HR practitioners an idea on what’s available and provide a guide to the most suitable medical insurance plan for your organisation.

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HR is usually the first area where such frustration is vented. Thus for companies, choosing the right plan is not to be undertaken without the proper research and consideration and should not simply be based on the cheapest option.

In light of these challenges, we have created the HR Magazine— Hewitt Associates: HR Guide to Corporate Medical Insurance, which provides important, practical, yet easy-to-use information that will help HR professionals choose the best medical policies to match their organisations.

As healthcare debates occur around the world HR Magazine and Hewitt Associates look at Group Medical Insurance in Hong Kong in a global perspective. In the following article, Susan DeGregorio notes, “The future of cost effective healthcare provision around the world is in doubt.”

Hong Kong is not immune to this debate, In the last week the Hong Kong government has proposed a public option. Employee health has a proven effect on morale, productivity, absence and business competitiveness. Hence the risk of ignoring it are increasingly being seen as a business risk.

From a Hong Kong perspective we give highlights from the most recent HR Magazine—Hewitt Associates survey on medical insurance plans.

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It is now widely accepted that HR professionals are being asked to master an ever growing number of skill sets and to possess a hyper specialised form of knowledge in a marketplace that is constantly shifting and changing. As a result, when it comes to choosing the best option for a company’s group medical insurance plan, HR directors and managers are finding it difficult to navigate the myriad of choices and challenges that such an environment creates.

With recent advances in medical technologies and an ageing population, the cost of medicine has been steadily rising, and employees’ medical visits are now more than ever coming under the umbrella of their company’s medical plan.

Moreover, company benefits, especially healthcare programmes are becoming an increasingly significant factor driving employee engagement. So it should come as no surprise to anyone that when it comes to attracting, retaining and motivating talented employees, selecting the right medical insurance package is absolutely crucial.

However, the frustration that can occur among employees after their employers choose the wrong company policy is all too familiar in many organisations.

Table of contents | Prevention better than cure: building a healthy workforce with corporate wellness

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Corporate wellness—building a resilient workforce Pandemic preparedness—too easily overlooked

Market overview and analysis

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Fighting fit—Hong Kong Government weighs in Private health initiatives in Hong Kong

Global business risks relating to employee health HR Magazine/Hewitt Associates Medical Insurance Survey—key findings Rise of staff medical insurance costs in Hong Kong—2010 Health insurance benchmark summary

Industry perspectives

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Healthy staff... healthy business Group health insurance—key trends

Advice for HR professionals

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Best practises: great governance of medical plans Sharing medical costs with employees through flex plans Global mobility strategies—health and wellness benefits a must Fit minds matter—understanding mental illness in the workplace

Insurance provider overview

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Aetna American International Assurance Company (Bermuda) Limited

Asia Insurance Company Limited AXA China Region Insurance Company Limited Bupa (Asia) Limited Blue Cross (Asia-Pacific) Insurance Limited CIGNA International Expatriate Benefits HSBC Insurance (Asia-Pacific) Holdings Limited Manulife (International) Limited MassMutual Asia Ltd The Prudential Assurance Company Limited

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Prevention and Building a Healthy Workforce with Corporate Wellness

health promotion and disease prevention strategies to improve their employees overall productivity and lower the cost of having an unhealthy workforce.

In this first section we feature two articles that deal with wellness promotion in the workplace and pandemic preparedness. In the first article Audrey Tsui argues that HR departments should not limit their wellness plans by only focusing on smoking cessation and alcohol abuse.

Tsui argues that wellness involves emotional, physical and intellectual components in what she terms ‘total

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Populations are ageing and increasingly living longer with chronic conditions. This trend undoubtedly has an effect in the workplace and increases the cost to companies as employee absence levels increase. The World Health Organisation (WHO) has proven that many of the costly and disabling diseases can be prevented yet individuals, organisations and healthcare systems do not make the best use of their available resources to support this process. HR departments are ideally placed to inform employees about workplace

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Introduction |

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Prevention better than cure: building a healthy workforce with corporate wellness

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wellness’. The risks of ignoring total wellness are all too common according to Tsui. She cites the Japanese phenomenon of Karoshi or sudden death from exhaustion as an example.

Wellness shouldn’t be seen as a cost but an investment.

In the second article the importance of pandemic preparedness by the business community is emphasised. According to Dr. Robert Allen, Regional Medical Director of International SOS pandemic preparedness plans are an essential element of contingency plans for organisations.

Prevention and Building a Healthy Workforce with Corporate Wellness

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Corporate wellness: building a resilient workforce | Audrey Tsui is a woman dedicated to spreading the notion of corporate wellness around Asia and into the wider international business community. She heads up the Corporate Wellness Management Unit in the business school at the Hong Kong Baptist University and uses seminars, publications and direct advisory contact with businesses to spread her point. Here she talks to HR Magazine about this topic, and in particular the idea of building resilience into your workforce to bounce back from the crisis.

Corporate wellness According to Tsui, the majority of the foreign companies in Hong Kong will follow the policies of their parent company for corporate wellness. The western idea of corporate wellness is based on tangible problems such as smoking cessation policies and employee assistance programmes for alcohol or emotional problems, but this is wrong says Tsui. “Why only pay attention to those employees with a problem now?�

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Market Overview and Analysis

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HR Magazine/Hewitt Medical Insurance Survey

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Analysis of key findings | leisure & entertainment, trading, construction & engineering and FMCG industries. Other industries polled included hi-tech, textile & apparel, education and telecom [see Chart 1].The size of respondent companies was quite evenly spread between different sizes of enterprises [see Chart 2].

Although corporate medical plans are provided in the name of the employer, most programmes are actually one-on-one relationships between the vendor—the medical provider, and the end user—the

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HR Magazine and Hewitt Associates surveyed HR managers and HR directors, in a series of HR Magazine Conferences, to gauge their opinion on medical insurance plans adopted by their organisations. The questionnaire focused on two key areas: • Top criteria in selecting medical plan providers • Predictions on spending on medical plans in the short and long term.

The majority of respondents were from finance, securities & banking, transportation & logistics,

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The overwhelming majority of companies surveyed are providing medical benefits to maintain market competitiveness with over half stating that such benefits are essential to keep employees at work and productive [see Table 1 below].

Table 1 | Reasons companies provide medical benefits

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Advice for HR Professionals

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Best practises:

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By Carl Redondo, Regional Benefits Consulting Leader, Hewitt Associates, Hong Kong

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great governance of medical plans |

Introduction

The employee benefits market in Hong Kong is straightforward when compared with most other countries in Asia. Employers typically only provide pension benefits, via an MPR of ORSO plan, life insurance and medical insurance as the main benefit programmes. Pension is normally the most expensive benefit but medical is usually the most valued by employees. The pension plan, ORSO or MPF, has a whole regulatory structure to ensure minimum governance standards but no such regulations apply for medical plans.

The cost of providing medical coverage is rising rapidly as the population ages in Hong Kong and more expensive treatments come onto the market.

These rising costs combined with the perceived value to employees are encouraging employers to make sure they are extracting maximum value from their

medical providers. Hewitt is working with a number of companies in Hong Kong who are now looking to build a governance framework around their medical plan to ensure it is both cost effective and providing the most value to employees.

As premiums continue to rise from year to year, the first question that employers are asking is around value for money. What is justifying the premium increase? Does the premium rise adequately reflect the claims experience of the employee population or just general medical inflation trends?

The other major question employers are looking at is around the policy design. Does the coverage provide value to employees? Are the covered illnesses and diseases appropriate for the employee population? Do the policy limits and co-sharing arrangements ensure the policy is effective?

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Appendix

AXA China Region Insurance Company Limited Company Information

Key Features

Member Hotline (852) 2828-8393 Fax (852) 2598-6502 Address 20/F., AXA Centre, 151 Gloucester Road, Wanchai, Hong Kong Website www.axa.com.hk Email employee.benefits@axa.com.hk

Products

Company Profile

Healthcare Network

• 80 million customers worldwide, with 214,000 employees worldwide • Over one million customers in Hong Kong and Macau • AXA is a leading Group Medical Insurer in Hong Kong and it ranked 3rd in this market based on premium revenues in 2009

• Hong Kong: Health Link Cards are accepted by over 1,200 panel doctors and AXA Care cards are accepted by 12 private hospitals in HK.

• Hospitalisation, Major Medical, Clinical, Dental, Maternity, Emergency Evacuation & Repatriation, ASO Plans

Main Distribution Channels

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• Broker • Agent • Salaried Agent • Direct

• New Policies Issuance Turnaround Time: Between 7 to 14 working days depending on level of complexity • Renewed Policies Issuance Turnaround Time: Between 5 to 10 working days depending on level of complexity • Renewal Dates: Generally, group plans will be renewed annually and renewal dates are normally the anniversary date of the original date of policy inception.

Mid-year reviews may be available on a case-by-case basis.

• Payment Methods: Premiums are normally paid by cheque • Payment Frequency: Annual, semi-annual, quarterly, or monthly

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Background

Policy Administration

Claims Process

• Required Documents: The insured member should submits a completed claim form with original doctor receipts containing patient name, expenses, diagnosis, date of consultation, doctor signature and referral letter (if necessary).

• Averaged Processing Turnaround Time: Outpatient claims - around 7 to 10 working days. Inpatient claims - around 15 to 20 working days.

• Reimbursement Method: By autopay or by cheque • Average Percentage of Claims Disputed: Less than 1%

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AXA China Region, a part of AXA Asia Pacific Holdings Limited, is a member of the AXA Group and commenced business in Hong Kong in 1986. As well as financial protection services, AXA is also a provider of a wide range of investment-linked and savings protection plans.

Conditions of Cover • Pre-Existing Conditions: Generally, pre-existing conditions may be waived for a client provided that the latest 9-month claim report issued by the current insurer can be submitted for reference, and that these conditions are also covered by the current insurer.

• Other Terms and Exclusions: Chronic, congenital and hereditary conditions are generally not covered.

• Infants and Newborns: Will be covered with effect from the 14th day after birth.

• Age Limits: The upper insurable age limit is 65. Extension of coverage will be considered in accordance with AXA’s underwriting requirements.

Member Servicing • Members can enquire about their claims transaction record and payment status via AXA’s website.

• Members can enquire about their claims transaction record and payment status via member hotline during office hours. All enquiries are handled by experienced customer service representatives.

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Appendix

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