4 ways to use health cash plans to mitigate rising PMI premiums

Health cash plans have become strategic tools for employers to manage the increase in PMI.

With private medical insurance (PMI) premiums continuing to rise significantly as a direct result of an increased utilisation of PMI benefits, employers are under growing pressure to offer comprehensive health and wellbeing support while keeping costs under control.

As a result, finding innovative and cost-effective ways to maintain quality care has become a top priority to ensure premiums are sustainable.

One solution gaining real traction in the employee benefits market is the smarter, more strategic use of health cash plans. Traditionally associated with routine expenses like dental check-ups and eye tests, these plans are now being used more creatively to reduce reliance on high-cost PMI, improve employee wellbeing, and deliver greater value from benefits budgets.

Today’s workforce expects holistic and personalised support that offers quick access to treatment with an emphasis on prevention and everyday wellbeing.

Employers who respond to this shift are therefore better equipped to boost employee engagement, reduce absence, and build a healthier, more resilient workforce.

1. Strategic signposting and education: Maximising cash plan use

One of the most persistent challenges in employee benefits management isn’t access to health cash plans, it’s awareness. Many employees often default to using private medical insurance (PMI) for treatments that could be managed more efficiently and affordably through a cash plan.

As specialists in employee benefits, we see first-hand how vital effective communication is in bridging this gap.

Leading employers are proactively addressing this through targeted education strategies such as onboarding videos, digital nudges, benefit walkthroughs, and personalised reminders to encourage employees to use their cash plans for appropriate, non-acute treatments like physiotherapy, chiropractic care, counselling, and diagnostic scans.

By positioning the cash plan as the first point of contact for routine and preventative care, organisations can significantly reduce lower-cost claims being routed through PMI.

This not only preserves PMI capacity for more serious or complex medical needs but also strengthens the long-term sustainability and cost-efficiency of the overall benefits offering.

Small shifts in communication can lead to substantial savings and better outcomes such as reduced PMI claims volumes, increased cash plan utilisation rates, improved employee understanding of available benefits, and even shorter waiting times for more urgent medical needs.

Effective signposting not only drives smarter benefit use but also helps foster a culture of proactive, informed healthcare improving both employee wellbeing and organisational value.

2. Redefining wellbeing: A holistic approach that supports people and purpose

Alternative therapies once viewed as ‘nice-to-haves’ such as acupuncture, osteopathy, reflexology, and sports massage are now becoming recognised as essential components of a modern, preventative health strategy.

In response, progressive employers are broadening their cash plan offerings to include these services, reflecting a shift towards a more holistic and inclusive approach to employee wellbeing.

This change aligns with evolving employee expectations. Today’s workforce, particularly younger generations place greater value on bespoke, preventative care that addresses both physical and mental health needs.

Employees increasingly expect and demand that their benefits support all aspects of their health and wellbeing, not just acute treatment. From managing daily stress to preventing longer-term conditions, there’s a growing demand for accessible options that reflect real, everyday health concerns.

Holistic therapies are particularly effective in addressing musculoskeletal (MSK) pain, which is one of the leading causes of workplace absence.

Recent Bupa statistics show a 14.5% year-on-year increase in MSK incidence among corporate businesses, and a 9.4% rise in SMEs, highlighting the growing burden of physical health issues across all sectors. Mental health concerns are rising, particularly among younger workers.

In 2024, claims from employees aged 45 and under increased by 13%, driven by higher demand for mental health support.

Mental health challenges also extend beyond the individual employee. Two-thirds of UK parents are concerned about their children’s mental wellbeing, and nearly half report that this affects their ability to focus at work.

These pressures not only affect performance and productivity but also speak to a wider need for family-inclusive support.

All of this reinforces the importance of proactive, holistic wellbeing strategies. Health cash plans when used effectively can meet this need by offering access to a wide range of services that support both physical and mental health, as well as optional family cover that extends care beyond the employee.

3. Making benefits work: Awareness, family cover, and engagement

Awareness remains one of the most critical yet often underestimated factors in maximising the value of health cash plans. Despite having access to comprehensive cover, many employees are simply unaware of the full scope of services available through their cash plan.

As a result, they may default to using private medical insurance (PMI) for treatments that could be more appropriately funnelled through their cash plan offering cost efficiencies.

This lack of awareness often stems from over complicated benefit communications, poor onboarding experiences, or minimal ongoing engagement. To combat this, employers are increasingly investing in clearer, more engaging communications that bring cash plan benefits to life.

These include welcome packs, short explainer videos, digital reminders at key health moments (such as dental check-ups or physio referrals), and user-friendly benefit portals. The aim is to simplify the employee experience and encourage smarter healthcare decisions.

Additionally, employers are highlighting the often-overlooked value of family cover, which allows employees to include partners and children under the same plan. This is a particularly powerful engagement tool for working parents and carers offering tangible, day-to-day health support for their household, not just themselves.

As two-thirds of UK parents express concern about their children’s mental health, and nearly 50% report that it impacts their own productivity at work, this family-inclusive approach is more important than ever.

By raising awareness of the full extent of what’s available including services such as physiotherapy, counselling, diagnostic scans and more, organisations can significantly improve employee utilisation rates, reduce pressure on PMI schemes, and demonstrate a more inclusive approach to wellbeing. It also plays a crucial role in boosting retention and loyalty, as employees who feel well-supported are more likely to stay with their employer long-term.

Ultimately, increasing awareness isn’t just about driving usage it’s about empowering employees to make informed, confident healthcare decisions, and getting maximum value from existing benefits investment.

4. ESG: Embedding social responsibility through health benefits

Beyond cost savings and employee engagement, we see that the strategic use of health cash plans also aligns strongly with environmental, social and governance (ESG) commitments.

Particularly under the ‘social’ pillar, offering accessible, inclusive health benefits including family cover and holistic wellbeing services, demonstrates a genuine commitment to supporting workforce health and reducing inequalities.

Looking ahead, there’s a growing sense that employers may need to take an even more active role in addressing broader health challenges. With estimates suggesting that by 2040, one in five people in the UK will be living with a chronic condition such as cancer, and heart disease and with increasing pressure on NHS services, questions around corporate social responsibility are becoming more relevant.

When considering an approach to offering affordable healthcare for all employees it poses the question should employers take action to provide affordable, preventative healthcare for all?

Encouraging health screenings for all employees could be a powerful next step both in reducing late diagnoses and in alleviating future strain on private and public healthcare systems.

This preventative, socially responsible approach not only benefits employees and their families but also enhances an organisation’s standing as a responsible employer and trusted corporate partner.

Leading on preventative health

Health cash plans have evolved from simple perks to strategic tools that help employers manage rising PMI costs while supporting a healthier, more engaged workforce.

Through targeted education, expanded wellbeing options, and inclusive family benefits, organisations can deliver modern, impactful health solutions that meet employee needs and ESG ambitions, building a resilient and productive workplace for the future.

Looking ahead, with the growing burden of chronic conditions and increased pressure on the NHS, there’s also a clear opportunity for employers to lead on preventative health. Initiatives like health screenings and broader access to affordable care can strengthen a company’s social responsibility while supporting long-term wellbeing across the workforce.