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Staff Sickness Insurance - The Truth PDF Print E-mail

 

Local Authority Staff Sickness Funds

Feeling the pinch in these financially challenging times?

At last an opportunity to save up to £1,350,000* a year for schools in your local authority

 

The Inescapable Facts

  • If your authority does not operate a mutual staff sickness insurance fund then your schools will be paying commercial providers at least 35%* more a year to cover their supply staff costs than is necessary. That's simply from the profit the insurance companies have to make, broker fees and insurance premium tax.
  • As a result the authorities with the lowest cost per staff FTE currently run their own defined benefit schemes. If you already operate an insurance scheme for schools' supply staff costs and you are not controlling it using a bespoke system designed specifically to manage it effectively then you could be saving more. There is only one system available that has been developed with other authorites help to enable you to easily acheive this.
  • The Esphera Staff Absence and Claims Management System will optimise the running of your scheme and typically save you £450,000 of the fund value**.
  • Typical savings are 15%** of fund value. Approximate cost are 2-3% of fund value. Why wait to implement this self funding solution?
  • The system can be configured in a few weeks, has no impact on authority IT and can be saving you money from the outset.
  • The longer action is delayed the more public money is being wasted.

Choices and Costs

  • For any given expected claim volume external insurers will add in their administration costs, contingency, profit margins and IPT at 6% of the total which ends up costing the schools between 160 - 210% of the amount they can expect to see returned to them.
  • Running your own mutual scheme significantly reduces the overall cost to schools to approximately 116% of the expected claim volume.
  • Esphera's Absence and Claims Management System, if used to manage your fund, will reduce the overall costs even further. Even with all costs added in, because so many efficiencies are made, the general level of claims will be reduced and the schools only have to be charged 102% of the original expected cost of claims (on average). These are just the tangible financial benefits.
  • Intangible benefits include higher buy-in levels from schools, reduced volatility, easier administration, less hassle, greater satisfaction, employing staff in the public sector instead of funding employees in insurance companies.
  • Running a simplified or non-optimised scheme dramatically increases the chances of the scheme failing, as we see each year with more authorities schemes collapsing in the face of stiffer competition from commercial insurers. A failed scheme costs the schools significantly more and costs jobs at the local authority. Unless you can afford to run that risk, let us optimise your scheme and make running your scheme simpler?

To Summarise in Simple Terms

  1. For every school that insures against supply staff costs externally you could save at least 30%* of that cost by operating an internal mutual fund. Whilst this may have cost implications for you (they normally work out at about 6-8%) they are no way near the 30% extra they/you/the public are currently paying for not having a scheme in place.
  2. Once you have a scheme you can reduce the operating costs of that scheme by another 15%** by using our custom designed system.
  3. Together these two measures provide a framework which makes it impossible for commercial providers to offer anything that will give you and the schools better value, flexibility and control.

Free 3 month Trial

We offer you the opportunity to test our system with a free 3 month no obligation trial using your own data to see the benefits for yourself. Interestingly, everyone who has taken the trial now uses the system full time.

What to do next

1. Work out your approximate savings. If you already have a fund multiply the number of staff in schools by £60 and that's a rough estimate of what you should save. If you do not currently have a scheme multiply by £180 instead. (That's per annum!)

2. Pass this information to your Head of Schools Services or contact us so we can help you move forward with a solution.

3. Find out more about the Esphera Absence and Claims Management System.

Esphera Solutions recommends CAPITA SPECIALIST INSURANCE SOLUTIONS to provide complementary stoploss insurance for a complete solution.

Capita Best Capita Best AN ALARM PARTNER

The Esphera system is the only system recommended by Capita Specialist Insurance Solutions to effectively manage your fund and provide accurate information on the level of expected claims to set your schools annual premiums and their stoploss insurance premiums.

 

*Typical savings when you implement an in-house mutual fund based on supply staff costs of £3m per annum and fee provision of 130% incurred from external providers. This equates to £900,000 plus efficiency savings of another £450,000** as explained below.

**Typical savings of 15% when using the Esphera Absence and Claims Management System based on a £3m fund. This is based on averages from existing users and equates to Local Authority administration time savings of 75% giving cost savings of 4.5%, School administration time savings of 50% giving cost savings of 2%, Eradication of invalid claims of 1.5%, 15% reduction in long term absences giving cost savings of 6%, 50% reduction of retained and insured layer premiums giving costs savings of 2%.