The response of the insurance industry to the impact of HIV/AIDS on employee risk benefits

Abstract

The impact of HIV/AIDS on employee risk benefits represents a threat to the social security of the majority of South African employees. The economic dimension of the disease is manifested in prohibitive cost increases and declining value of employee risk benefits. The key challenge is to balance the need for adequate and affordable insurance for HIV positive employees, against the need to protect other employees from unfair risk distribution policies. This paper evaluates existing literature and considers the response of the insurance industry by looking at theoretical principles, historical lessons, scientific evidence, and the changing social environment, from the perspectives of the different stakeholders. The consolidation of this work suggests that sustainable responses are best achieved by primarily exploring cost containment measures rather than cost shifting exercises. Secondly, looking beyond the traditional role of business as profit making enterprises to consider the social role of the insurance industry, as well as the role of government in the provision of what is arguably a public good.