By: Reo Botes - Managing Executive at Essential Employee Benefits

Many South African employees, particularly those in lower income brackets, are excluded from benefits like critical illness cover and disability insurance offered through company provident funds. Eligibility rules and minimum contribution levels make them inaccessible, and workers who do not qualify for these packages are left vulnerable. While the Compensation for Occupational Injuries and Diseases Act (COIDA) offers basic protection for work-related incidents, it does not cover health risks that occur outside of working hours. Without medical aid, these workers face long queues or delayed treatment at under-resourced public facilities. This is where health insurance becomes essential. While it is not a substitute for formal risk benefits, it offers a vital first layer of protection with access to primary healthcare that can help prevent many health issues from turning into complicated or chronic conditions.

Why traditional risk benefits fall short

Provident funds and group risk schemes are simply not designed for every income level. Many schemes require mandatory employee contributions, and even modest percentage-based contributions can be unaffordable for workers at the bottom end of the income spectrum. In addition to this, eligibility criteria, minimum premium requirements, and employer-specific contribution structures mean that many lower-income employees simply do not qualify or cannot realistically participate in these benefits.

In addition, the risk benefits associated with provident funds, including life cover, dread disease and disability, claims are only instituted after something goes wrong. They over no form of preventative care to assist employees to stay healthy and productive at work.

Health insurance, on the other hand, plays a preventative role by covering day-to-day medical expenses at private healthcare facilities. It enables workers to manage chronic conditions like high blood pressure or diabetes before they escalate into hospital admissions or critical illness. Health insurance generally covers GP visits, acute medication, and hospitalisation for listed conditions. This in turn helps prevent the very events that traditional risk benefits are meant to respond to. 

Rethinking employee benefits

Employees who do not qualify for formal risk cover often also face a lack of preventative care. This makes them more vulnerable to illness or injury, while at the same time less likely to get the treatment they need to recover and return to work. Employers can help address this challenge by offering affordable health insurance plans that are accessible to lower-income staff. Even entry-level products can provide day-to-day healthcare access and limited hospital cover. 

Employee benefits need to evolve to become more affordable, inclusive, and preventative. For workers who do not earn enough to participate in policies such as provident funds and medical aid schemes, health insurance can provide critical access to care. For employers, it is a tangible way to support employee well-being and wellness, while reducing absenteeism, which is a mutually beneficial result.