HIV/AIDS: Oppertunity for brokers to fill a need in the market

In March this year the government adopted a five-year national strategic plan to fight the HIV/AIDS crisis. Nevertheless, HIV/AIDS continues to pose serious challenges to employers, creating an opportunity for brokers to offer employee benefit solutions to support employers and contribute to the national fight against HIV/AIDS.

The national strategic plan includes a straightforward commitment to providing antiretroviral (ARV) medicine to patients, reaching 80% by 2011 and meeting 95% of the costs; a better overall approach to prevention strategies; and a serious commitment to implementing mother-to-child prevention programmes. In short, the document is sound, takes into account what is happening on the ground and focuses on what needs to be done to get on top of the disease.

According to the Actuarial Society of SA an estimated 2.5 million South Africans will have contracted the virus between now and 2011, if the new plan was not implemented. Halving the number of new infections will therefore save at least 1.25 million people from being infected with HIV.

HIV/AIDS costs companies money

HIV/AIDS affects every sphere of our lives. It is not just a government problem that can be seen in isolation. A fair number of big businesses in South Africa, especially in the mining sector, have put programmes and strategies together to deal with the pandemic. It is however a sad fact that a vast number of small and medium sized businesses have failed to develop their own HIV/AIDS strategies. Dealing with AIDS is the right thing to do, as well as a good investment. Infected or affected staff means higher absenteeism, training, recruitment and insurance costs, and lower morale and productivity.

Addressing the problem

The first step in dealing with this issue could be for companies to provide employee benefits, comprising a retirement fund, insurance cover and a medical scheme, to their employees. The employer can then address issues such as education and awareness and testing programmes and condom provision.

The average employer spends 20% of payroll on employee benefits, with approximately 10% being contributed to retirement funding, 3% on insurance benefits and 7% on medical schemes. The cost of the insurance benefits has increased substantially in the last few years, however, it has not become unaffordable as was predicted 10 years ago. The insurance benefits provided typically include cover in the case of the employee dying or becoming disabled or contracting a dread disease such as cancer or a heart attack. Funeral cover is particularly popular and provides a payment of a relatively small amount usually up to R10 000, to cover the funeral expenses when an employee or someone in his or her immediate family dies.

Market gap for brokers

The expertise of most employers does not lie in HIV/AIDS strategies or employee benefits. This opens up an opportunity for brokers to fill a need in the market. Reputable financial advisers who have the appropriate technical knowledge will be able to offer corporate clients guidance and advice regarding the employee benefits products that are most suitable to them and their employees.

In the past the majority of the employers were apathetic about HIV/AIDS as they saw the disease as a death sentence. Studies now show that patients who remain compliant with antiretroviral regimens can live an extra 30 to 40 years, therefore a full and productive life. With the right guidance from a financial adviser and the correct employee benefit products, employers can make this happen!