As many as 76% of South African employees run out of money before the end of the month, and 89%  worry about being able to pay their monthly bills. With the cost of living climbing and the cost of healthcare, increasing, gap cover is coming to the fore as an inexpensive added protection against having to pay towards certain costs that are not covered by medical schemes.

Gap cover is an insurance product that aims to cover the shortall between what a medical scheme pays and what a healthcare provider charges for medical services. This coverage becomes essential when doctors and hospitals charge more than the amount paid by the medical scheme. Even though most medical schemes cover up to 100% of the scheme rate, with top-tier plans covering 200% or 300%, the actual costs often surpass these limits. Gary Feldman, Executive Head of Healthcare Consulting at advisory firm NMG Benefits, explains that while gap cover is not a replacement for medical aid cover, it has become an essential add-on.

Consumers who have gap cover speak for themselves; employers can amplify the advantages by offering it to all their employees as part of a group scheme cover.

“Gap cover is by no means new in the market, and many providers target individual consumers. However, group gap cover can mean preferential rates, reduced waiting periods, continuity of cover, and access to value-added services like trauma counselling, top-up cancer cover, and lump sum payouts for cancer diagnoses.

Employers can also play an important role in ensuring that employees’ gap cover policies do not lapse due to non-payment. Running the premiums via a payroll deduction will ensure that payments are always made on time and in full.

Offering group gap cover also offers many benefits to employers such as low absenteeism at work. It is estimated that absenteeism costs the South African economy between R12 and R16 billion annually, with businesses losing up to 17% of their payroll every year – possibly making absenteeism the most expensive challenge for local businesses.

“With worry-free access to the most appropriate medical care, employees can be treated, and recover, with the least-possible impact on their ability to be productive. Not only are they medically ‘fit’; they are also likely to take fewer sick days due to stress and anxiety relating to paying for medical treatments,” says Feldman.

Another significant advantage for employers offering group gap cover lies in how it enhances their ability to attract and retain top talent. A robust benefits package, including gap cover, makes an employer more attractive and improves overall job satisfaction.

However, when investigating group gap cover options, it is critical to look beyond just the cost; benefits should be compared on an ‘apples for apples’ basis to determine overall value. Feldman advises employers to work with specialists who can leverage expertise and a thorough understanding of the different products on the market.

“Navigating the gap cover market can be complex. However, working with an experienced employee wellness adviser, like NMG Benefits, will help to ensure that group gap cover solutions align with business needs.”