Procedure for Administration of Staff Insurance Schemes

Employees are literally the life of the business. Losing employees as a result of death, disability or certain illness can significantly impact business operations. Thus, organizations purchase employee insurance as part of their risk management strategy. Others offer insurance as part of their benefits package. In some countries, employee insurance is mandatory. Although insurance is considered an expense, it is necessary to attract good employees and avoid unforeseen expenses which could ultimately be higher than the premiums you paid for.

There are basically three types of insurance employers can provide their employees: life insurance, disability insurance and health insurance.

Life Insurance

Life insurance provides life protection for employees. This insurance plan will pay a lump sum amount (sum insured) when any of the following events happen to the insured employee during the period of the insurance: death due to any case; total and permanent disability; or terminal illness. Life insurance can be purchased on the group with a set limit for the group or set limits by job or class. The coverage is term, is reasonably priced and is available while the individual is employed by the company.

Health Insurance

Health insurance is an important part of an employee benefit package. Sickness can be emotionally draining for workers, especially if they do not have enough funds to pay for medical bills. Even after he recovers, a worker may worry about how to settle hospital bills. Anxiety may just get them sick again. Health insurance avoids those costly employee sick days. In Kenya, health insurance under the National Hospital insurance Fund (NHIF) is mandatory.

Health insurance is the most common of all employee insurance packages that employers create for their staff. Human resource managers need to understand the fact that motivated employees are naturally more productive than their less motivated counterparts. Accordingly, employee benefits such as health insurance are critical to the success of any organization, particularly because such benefits make the staff members to feel that their efforts and contributions in the company are being recognized and rewarded. This comes with various advantages for both the employees and the company offering the said reimbursements.

Travel Insurance

If an organization has employees that travel a lot, then consider getting a travel insurance plan. Business owners should make sure that they and their employees are covered by a comprehensive travel insurance policy that will cover medical and evacuation expenses. Such costs could cripple an employee’s finances and he or she may look to the employer to cover these medical costs, especially if they are on company business. If employees are traveling more than one time per year, a multi-trip travel insurance plan may be the most cost effective travel insurance plan.

Because of rising insurance premiums, some companies have asked employees to co-share the cost with employees. There are many insurance companies with many different types of plans and options, hence it is important to research on the best insurance company for your organization and employee’s needs.

Benefits of Employee Insurance

There is no doubt that health insurance, along with other forms of employee incentives, plays a key role in motivating employees, which in turn translates to more productivity.

When employees feel that their contributions to the growth of their employer are being appreciated, they derive job satisfaction. This is critical to their performance and increases their probability of continuing to offer their services to the employers, without harboring thoughts of leaving for greener pastures.

Besides, employee insurance means that workers have access to affordable and readily available, high quality preventive healthcare. This implies that employees wellness is maintained, and that they are healthy hence able to attend to their roles in the company. Cases of absenteeism due to health-related issues are thus reduced.

A company which invests in insurance among other employee benefits positions itself to attract quality employees, resulting in an enviable workforce that translates to increased productivity and profitability. Quality employees are also associated to efficiency within any organization.

It is always a good idea to afford employees a set of benefits which will motivate them. This is because the workers feel that they are appreciated as a part of the organization. This results in motivation on the part of employees. This way, the staff members invest their efforts towards the success of their organization.

Employee retention is another benefit associated with employee insurance. When workers are afforded a reliable health insurance among other benefits, they develop a positive attitude towards their employers and are motivated to continue offering their services. This eliminates chances of employees leaving the firm for other employers who could be having more attractive employee benefits. This is especially essential since it helps the company to avoid brain-drain and retain its talented and experienced workers.

Another benefit that a company can derive from insuring its workers is tax advantages. In some states, companies can offer their employees’ health insurance benefits and profit from tax cuts, which reduce their out-of-pocket costs per se.

Leave a Reply