Advisers have backed government plans for tax breaks for firms that provide occupational health benefits to their staff as a “long overdue” means of reducing pressure on the NHS.
They suggested the most practical or economical results could be achieved by encouraging take-up for new adopters or by reducing penalties on lower paid employees accessing schemes.
As Health & Protection reported yesterday, the Independent Healthcare Providers Network (IHPN) welcomed reports in The Times that companies providing such benefits could in future be handed tax breaks under plans being considered by ministers.
The paper claimed this was an early conclusion of a review into why 630,000 people have left the UK workforce since 2019 which found employers providing extensive occupational health support had better retention rates as they lost fewer staff to ill health or related problems.
The report could indicate government is following up its Health is everyone’s business consultation process, led by the Department for Work and Pensions (DWP) and Department for Health and Social Care (DHSC), which in July 2021 praised insurers for the support they offer and role they play in supporting workers’ health.
Tax breaks have been a key demand of advisers in the health and protection markets to prime ministers last year to help encourage firms to support their staff and ease the burden on the NHS.
One of these advisers was Isaac Feiner, owner of Lifepoint Healthcare, who told Health & Protection today that the measure would be a great incentive for something he believes businesses should be doing anyway.
“We are all aware of the benefits of what a robust employee wellbeing proposition can bring,” Feiner continued.
“Data clearly indicates the benefits and how even if not used, just the knowledge that team members have support in place can have a direct impact on their life and work and reduce stress or illness related absence.
“I’m hoping that one day the government make it mandatory. This I believe will have a huge impact on relieving the NHS burdens and also ensure a healthier workforce which will in turn boost the economy.”
Encouraging new schemes and lower paid staff
But Steve Herbert, wellbeing and benefits director at Partners&, told Health & Protection his biggest concern would be that tax incentives are sometimes a little difficult to explain to employers.
“They often go to those that are already committed to funding private healthcare provision, and can be too expensive for the Treasury to sustain over time, Herbert said.
“So perhaps some overt state support for new year-one premiums would be a better way to encourage more employers to the table, while capping the long-term cost to the state?
“Either way, it’s good news that this is now being actively considered. Let us hope that any proposal is wide-ranging enough to capture a number of health-related benefits, and that any change happens quickly.”
Meanwhile, Brian Walters, managing director of Regency Health, said the industry’s realistic aim should be to argue that lower paid employees in particular can take up their employer’s offer of health insurance without penalty.
“This would help to alleviate pressure on the NHS and would be economically sound given that the additional premiums would attract insurance premium tax at 12%,” he added.
Something has to change
Joanna Streames, managing director at Velvet, told Health & Protection that something has to change with the way the NHS is run currently, adding people were not getting the care they needed, citing the example of her own sister who’s care has been severely disrupted and extended.
“The trouble is that this builds to a crescendo because there’s delays in getting seen on a normal routine basis. People are very reticent to call the doctor unless it’s really urgent,” she said.
“People are put off day to day care until it gets to the point where it’s more urgent, so having private healthcare alleviates a lot of that.
“We’re getting more PMI enquiries now – a marked increase because everyone out there is feeling this. If half the country had private medical insurance it would not be a problem but that’s not practical because it’s an expensive product.
“But if it can be given with tax breaks through the company, then government is aiding offering this to people and in my mind can only be a good thing because half the problem is fast diagnosis which you get with private medical insurance.”
Labour shortages
For Claire Ginnelly, vice chairwoman of the Association of Medical Insurers and Intermediaries, (pictured) any help that can be given to employers to enable them to provide more health related benefits to employees has to be seen as a positive.
“I know that this is focussed on occupational health with a view to get more people back into the workplace, and follows on from reports on the high number of people who have left and taken early retirement,” Ginnelly continued.
“This is in the government’s interest as we currently have a labour shortage in this country and they need to raise more tax. More people working equals more paying tax. It could be achieved via the corporation tax system.
“Any sort of tax incentive for employers is long overdue. However, it would be beneficial for the government to look at wider tax breaks for employers for health-related products which would ease the burden on our over stretched NHS. This would be more difficult as the NHS is so politicised.”
