Sept 2011, Q3 iv

[Geraldine]

The examiners report goes on about the possibility of writing the personal health plan (hospital treatment cover) on a group basis. However, the cover was potentially to be provided via funds invested and these funds would be based on contributions determined as a percentage of salary. Therefore there would be individual ownership of funds.

My question arises from the fact that the funds will be different and grow to different extents, meaning individuals will have different cover. How is this compatible with cover written on a group basis - my understanding or assumption was that the definition of group cover was to afford the group the same cover (perhaps with extra provisions for key staff, long serving employees and the like). It feels very much like individual cover given that there are individual funds being grown and used to pay for hospital treatments. Wondering if someone can explain how this can be seen as being written on a group basis?

 

[Sarah Byrne]

There is no reason this couldn't be offered on a group basis in a similar way to a group pension scheme. The 'individual' members have separate funds but the money is taken directly from salary and the members benefit from lower charges etc as a result of taking cover through the group. All the usual benefits of group cover like reduced anti-selection etc would apply. It could then be up for members to decide whether to purchase insurance with their fund, or pay directly for treatment costs