As the only specialised schools’ staff absence mutual scheme facilitator Esphera has over 15 years of experience that allows us to recognise what makes a great mutual scheme and what causes them to fail or give poor value and below par service to schools. With this background we have introduced the concept of Esphera Certified Mutual Schemes to ensure schools know whether they are getting the best possible value. The aim of this is to let schools be reassured that they are getting a fantastic level of service for the lowest possible cost. In some of the Certified schemes we have helped to set up the schools pay as much as 50% less and receive back much more compared with their previous staff absence insurance policies. These schemes also tend to generate healthy reserves as they are optimally balanced which helps to ensure future net costs are reduced as far as possible.
In order to be classified as an Esphera Certified Mutual Scheme the following requirements need to be met
- Schools must not be discriminated against due to status e.g. academies should not be excluded.
- The scheme should be at least 85% efficient. That is the amount required to be returned to schools or retained for future returns. (Commercial absence insurance is less than 60% efficient.)
- The funds within the scheme should be ring-fenced and administration charges for running the scheme should be the only external cost to the scheme.
- Scheme organisers should not charge more than 15% for administration and other associated charges to achieve the 85%+ above. A well managed scheme should be charging around 10% and therefore approach 90% efficiency.
- Schools’ contributions should be calculated based on accurate records of historical absence patterns.
- Schools should be given the ability to flexibly select different levels of daily payments and non-payment days for different categories of staff.
- Schemes should have separate sickness and maternity funds to prevent one “poisoning” the other.
- Schemes should be controlled by systems that record the scheme rules and prevent human errors in calculating payment due to schools.
- Schemes should not have onerous conditions designed to purposely prevent payouts.
- Schemes should provide for a periodic “equaliser” process so that no school loses out more than any other. This should look at contributions from and payments made back to schools and will redress any imbalance in proportion of contributions returned to schools. Over time this will ensure that all schools contribute fairly and benefit equally and will lower the overall net costs for all members of the scheme.
If you already belong to a mutual scheme ask us if the scheme meets the above criteria. Many existing local authority mutual schemes sound good but fail to deliver equitable good value due to poor implementation. Contact us to find out if we can help improve it. If you do not currently belong to a mutual scheme, contact us to see how you can form or join a mutual that works in the optimal manner for your school and those around you and removes many of the headaches that come around each year at renewal time. If you are not sure what to do upon renewal read our Renewal Consideration Guide.