The Pre-Existing Condition Clause Trap!

Imagine you have just been offered a great premium for your practice's group locum and you are just about to switch providers . Just before you do you notice something in the small print called a 'pre-existing condition clause'. Most companies now cover themselves with a pre-existing condition clause. This usually means that regardless of who is covered if they have been off work for 5-10 days (varies on provider) for a 'pre-existing condition' then they are not covered for a set period of time.

Now initially this doesn’t seem too bad (depending on time scales) but then let’s consider that recently a competitor has released a policy with a THREE year pre-existing condition clause! However what if you have a bunch of really healthy Doctors and Professionals who haven't been off for the last 3 years? What does it matter then? Well it does, and it’s something I call the pre-existing 'spin cycle'. Let me ask a question, who are the most expensive people to cover for?  I believe it is the individuals who are off with a recurring condition. This could be stress, back or even something like a trapped nerve. Those pesky reoccurring illness's that just won’t go away and makes it challenging for a practice manager to cover as you never know when they are going to strike! To illustrate my point let’s look at this example:

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Annual Allowance update for the NHS pension

The Annual Allowance, set by HM Revenue and Customs (HMRC), is the maximum amount of pension savings you can receive tax relief on each year. HMRC reduced the Annual Allowance from £255,000 to £50,000 from 6 April 2011, with the result that the total tax-free growth in the value of your NHS benefits and other pension arrangements you may have is capped at £50,000.

If the growth in your pension savings is more than the Annual Allowance then a tax charge may be payable on the amount over £50,000. This is the Annual Allowance charge.

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Top 5 Things to Look for in a Good Locum Insurance Policy.

Top 5 things to look for in a good Locum Insurance policy

1.) Premium.

I thought I would put the most obvious one first! Yes it is important to have a competitive premium but this should not be at the expense of the quality of cover especially as there are some policies out there we would NOT recommend as an independent advice company. The best way to find out if your premium is competitive is to get several premiums from different companies or go to an Independent Financial Advisor like ourselves.

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Why reviewing your locum insurance IS a priority.

Having worked with practice managers for nearly 9 years in reducing insurance costs I have to admit that I am not envious of the challenges they face running or managing a modern medical practice. I am fortunate to have a good relationship with many who explain to me the different challenges they face, often to meet their budgets in an organisation where the 'goal-posts' are forever changing. One wonders whether this profession is becoming specialist in its own right and I wonder how long it will be before a University recognises this and creates a degree around the vocation?

However the downside of paddling furiously in any organisation is often things that 'roll over' for another year are often the 'small fish' to slip through the net and this is where as a financial professional I am concerned. More often or not a review of Surgery and Locum Insurance is seen as a low priority. Often passed to a part time member of staff or a deputy in a wish to clear desks for the most important areas. However in my opinion this results in false economy for the practice and ultimately the patients.

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