Millions of workers with private medical insurance are facing bumped-up excesses or premiums leaping by up to 50 per cent.
Hundreds of pounds could be snatched from pay packets when policies are renewed, as just one cancer claim at a company can cause premiums to skyrocket.
Alternatively, to keep premiums steady, companies will push up the excess to £250 to dissuade staff from making a claim. This is compared to a typical £50 a few years ago.
So, anyone who thinks they are covered by a company scheme should review it regularly to ensure it suits their needs.
The soaring cost of treating cancer is behind a rise in premiums, but costs could spiral further — by more than 60 per cent in a decade, according to health specialist Bupa. In one company scheme where a single cancer claim reached more than £300,000, premiums shot up by £300 per head.
Companies are now stripping back on expensive health-related employee benefits, leaving staff caught in a 'battleground' in the market.
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The most recent data available from industry analyst Laing & Buisson shows a 3.3 per cent fall in the number of private medical insurance policies paid for by companies, while cheaper, company-funded cash plans grew by 11.2 per cent.
Research by the policy provider Simplyhealth shows a fifth of employers removed health benefits altogether over the past year.
During the past four years the number of people covered by private medical insurance at work has fallen by 1.75 million. Many more will have seen their policies shoot up in cost.
More... Private health insurance: the essential guide Compare: Private medical insurance policiesPrivate medical cover is sometimes regarded as a luxury reserved for the rich, but policyholders argue that when serious illnesses strike, there should be no expense spared for treatment.
Furthermore, a huge number of employees view it as an affordable and integral workplace benefit.
What should you consider when taking out PMI?How much do you want to spend?Do you want to pay for part of your treatment?Do you want your cover to include seeing a specialist and having diagnostic tests (for example, X-rays and blood tests) as an outpatient?Do you want a choice of hospitals, or would you be happy to have any treatment that you might need, in a hospital available from a limited range chosen by your insurance company?What am I not covered for?Tim Johnson, an expert from consultancy Gallagher Employee Benefits, says: 'Firms are looking to control costs. The cost of medical cover continues to rise and there is a risk that one big claim within a scheme will drive up costs.
'It’s a battleground, so offering employees the chance to top up is essential.'
Companies are increasingly substituting policies with cheaper, more limited cash plans, which can cost just £1 per employee per week. But increasing the excess on private medical policies is also common.
Staff feeling the pinch might not be able to afford the fee and would save their claims for extreme cases, turning instead to the NHS for simple procedures, explains Howard Hughes, of Simplyhealth.
But the growing risk for employees is that excesses will continue to rise, leaving them priced out of the policy when they need it most.
It’s not just employees who are hit by the squeeze. Anyone recently made redundant who might have previously benefited from a healthcare plan at work will now have to sacrifice cover.
Those working on casual contracts or anyone who is self-employed will find they’re on their own when it comes to medical insurance.