Employers want to make better use of strategic potential of group and hospitalisation insurance plans

Fringe benefits are becoming increasingly commonplace in the labour market. But employers still see ample opportunities for leveraging this popularity in their HR policy by means of better communication, especially as regards the package of supplementary pension and health care plans. More and more employers also want to be able to arrange these types of fringe benefits more flexibly in the future. These are the main conclusions from a study that AG Insurance carried out in cooperation with Vlerick Business School in which more than 100 Belgian employers participated1.

Strengthening the strategic potential of group and hospitalisation insurance plans by having more and better communication

Employees have never before been able to get such an extensive range of fringe benefits, the 'Jobat Pay Guide 2016' recently showed2. Within this wide offering, no fewer than 75% of all employees have a supplementary pension plan, while 45% take advantage of hospitalisation insurance through their work3.

In the study conducted by AG Insurance and Vlerick Business School, employers nevertheless indicated that their employees sometimes fail or are unable to estimate the value of these facilities correctly. Reasons for the undervaluation include insufficient means of communication within the company and a lack of knowledge on the part of the personnel. With a company car or smart phone, for example, the benefit is very 'tangible' and immediately noticeable, but the situation is different when it comes to group or hospitalisation insurance plans.

So for many employers the key matter is to have more and better communication about such benefits, confirms Jean-Michel Kupper, Director of Employee Benefits & Health Care at AG Insurance. ‘The study revealed that almost three-quarters (73%) of Belgian employers reckon that the strategic importance of a supplementary pension and health care plan will increase in the future, among other things as a way of attracting and retaining talented people. Almost nine out of ten (86%) also believe that employees will themselves attach more and more importance to these two fringe benefits. Transparency, digital and comprehensible communication about group and hospitalisation insurance is therefore more crucial than ever before.’

Belgian employers regard it as their responsibility to make fringe benefits understandable for their personnel, even though more than half (56%) say this will require considerable efforts. More than six out of ten companies (63%) use their own means of communication for this purpose, usually conventional channels (e-mail, telephone and word-of-mouth). But companies do appear to be clearly aware of the growing importance of digital communication and one out of two (46%) want to move in step with this development. More than four out of ten (43%) companies agree with the proposition that digitalisation will impact significantly on communication on supplementary pensions and health care plans.

The study further showed that employers are responding insufficiently to important moments in life - such as when a person joins the company or gets married - in order to underscore the value of fringe benefits for their personnel. Similarly, when a salary increase is awarded or promotion occurs, only a minority (8.7%) of companies communicate about the impact of this on the pension or hospitalisation plan, for example regarding a higher employer’s contribution.

Employers want to offer more choices within the package of supplementary pension and health care plans

Besides communication, the flexible arrangement of the package of supplementary pension and health care plans offers opportunities to Belgian employers. Multiple choice  plans will gain in popularity, according to Xavier Baeten, professor at Vlerick Business School: 'At present only two out of ten employers offer choices concerning one or more benefits within the package of supplementary pension and health care plans, while almost seven out of ten (68%) say they want to do so in the future. As caring employers they want to increase the involvement of their personnel in arranging the remuneration package, and allow them to make the choices that most closely fit their specific needs.'

Nevertheless, this kind of freedom of choice also has disadvantages, he warns: ‘Supplementary benefits in pension accrual and health care are fairly complex matters and most employees have insufficient knowledge to be able to make the right choices. To avoid an even greater workload for the HR department, many employers suggest simplifying the products and communication. They also expect a lot from clear and simple digital tools that inform employees and that guide them through their choice, for example by means of simulations.’

1 Total response of more than 100 Belgian employers representing companies of different sizes.
2 Jobat Pay Guide 2016, a study conducted among almost 30,000 working Belgians. More info: 
AG Insurance figures.

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