A PMI plan that lets staff choose from a menu of health benefits has been launched by Western Provident Association (WPA).
Flexibility and choice are key to the Enterprise Flexible Benefits policy.
And to encourage the plan's growth, WPA is offering intermediaries an initial commission of 15% for the rest of 1999, after which it will revert to ten per cent.
The health plan's fundamental principle is that it allows small businesses, with a minimum of three staff, to build a package of health cover for their individual employees.
They can begin with a basic standard of cover centred on hospital-related expenses – for example consultation and treatment.
The insurer does not restrict its insured parties' choice of hospital.
Additional cover can then be built on to this platform, selected from the following five groups of benefits: out-patient care; therapy including, complementary treatments such as osteopathy and acupuncture; dental care; worldwide medical protection; and a cash plan option for eye tests and prescription charges.
Alternatively, staff can opt for a Stand Alone cash plan that covers the cost of a range of routine healthcare, ranging from accident and emergency admission to prescription bills. This presents a budget-priced package.
By allowing benefits to be tailored to the individual circumstances of staff and their family members, premiums – calculated using a stream-lined postcode system – are kept low.
For example, a 30-year-old in Leeds would pay around £18 for standard cover, rising to just over £21 in Oxford and more than £22 in the most expensive area, London.
The cover is aimed specifically at small businesses, of which there are more than one million in the UK.
They can suffer disproportionately if a key member of staff is kept away from work through illness or injury.
WPA envisages the plan could form an attractive employee benefit, useful in retaining staff. As an incentive, new small business clients are being offered a 25% discount spread over five years.
The not-for-profit health insurer has carried out extensive consultation with its existing customers and brokers to ensure the product would have widespread appeal.
"We went back to the drawing board when we designed this new package. We have consulted intermediaries and our customers over the plan's details and incorporated their demands.