What is an employer-sponsored PMI scheme funded on a performance share basis?

An employer-sponsored PMI (Private Medical Insurance) scheme funded on a performance share basis indicates that the financial arrangement is tied to the performance outcomes of the plan, particularly in relation to claims experience. This model means that if the claims made by employees are lower than anticipated, the employer benefits financially, often sharing in the surplus derived from these lower claims.

When claims experience is favorable, the costs to the insurer are reduced, and a portion of this surplus can be returned to the employer. This fosters a shared interest in managing health and wellness within the workforce because both the employer and insurer have incentives to maintain lower claim levels. This structure supports a collaborative approach to managing healthcare costs, which can lead to better health outcomes for employees and financial benefits for employers.

In the context of the other options, they do not accurately reflect the nature of a performance share scheme. Direct premium payments only would imply a straightforward payment approach without the performance-sharing aspect. An arrangement where the insurer bears all risks does not involve the performance-sharing dynamics central to this scheme, as that would negate the benefit-sharing element. Lastly, the employer controlling all aspects of claims would not align with a performance share basis since it emphasizes collaboration and shared interest rather than unilateral control of the process.