Investment in workers’ wellness pays healthy return
A surge in employer interest in creating a healthier workforce is pushing health insurance numbers higher, says Roger Styles, chief executive of the Health Funds Association of New Zealand.
The number of New Zealanders covered by health insurance jumped by 24,000 – or nearly two percent – in the past year, as more employers moved to offer it to their workers as part of group health plans.
The recent strong growth in employment has also played a part, with the ranks of those already in established group health plans swelled by new employees joining. This has been particularly noticeable in hot sectors, such as construction.
Of particular note, however, is the increased level of interest from employers who are new to providing subsidised health insurance for their staff. There appear to be several factors behind this.
Firstly, recent changes to health and safety legislation have seen greater prominence given to the health aspects of the workplace and workforce. In the past, the focus has largely been on safety. Now employers must think more about health. Initiatives focusing on wellness in the workplace are an important part of this, and private health insurance can play a useful role where employers look to include this as part of their overall health and safety policy.
Thinking more about healthcare, employers recognise that it is not just about the impacts of the workplace on employee health. The flip-side to this is thinking about the impacts of employee health on the workplace. Poor health can lead to higher levels of absenteeism and presenteeism – being physically present at work but not actually achieving anything – and lower levels of productivity and profitability.
These problems can be significantly reduced or avoided through a focus on wellness in the workplace, including the role of health insurance. The productivity benefits in particular have been well-documented. Recent research by TDB Advisory estimated a net productivity benefit to New Zealand of around $100 million per annum from health insurance. Repeated research on the impact of health insurance plans in the workplace by Southern Cross and BusinessNZ points to reduced absenteeism, faster access to treatment, and a boost to productivity.
It obviously makes no sense to have employees on sick leave, absent awaiting surgery on public wait lists, or unable to perform their job for long periods. Wellness in the workplace means keeping staff healthy, and if they fall ill or need treatment, helping to get them well again quickly and back into their role.
A further factor is increasing expectations of workers. Worker mobility and globalisation mean many employees have had previous roles where employer-subsidised health insurance was an established and expected part of the job. Many Kiwis returning home in recent years for work have had the benefits of health insurance during their time abroad, and have expectations about seeing that continue on their return to New Zealand.
The tightening labour market and low unemployment levels have also contributed. Those in the job market with skills in demand can more readily choose between employers on the basis of the work environment on offer and overall package – and things like the availability of health insurance for them and their families can be an important consideration.
Clearly, many employers are benefiting from providing health insurance cover for their workers, and choose to do this despite the imposition of fringe benefit tax (FBT). Put simply, it is an investment in their workforce and ongoing productivity. Sure, FBT is a financial imposition on companies, but this does not entirely negate the benefits to employers from investing in the health and wellness of their workforce. In the past some SMEs had considered but rejected providing health insurance for their staff due to the impost of FBT and its complexity. However, FBT compliance has become more simplified and rates have reduced, encouraging more SMEs to take another look. Insurers can also offer assistance and advice in tailoring a package which meets an employer’s needs.
Note: Many NZ health insurers offer tailored wellness packages to employers. These include Southern Cross, Unimed and Accuro.