Industry experts have called on the chancellor to prioritise tax breaks to encourage greater uptake of private medical insurance (PMI) as well as laying out plans to effectively harness vocational rehabilitation ahead of today’s Autumn Statement.
As the nation awaits chancellor Jeremy Hunt’s speech in Parliament this afternoon, Health & Protection asked advisers about what he should be prioritising in today’s address.
Mike Hesch, head of UK employee benefits at Engage Health Group, told Health & Protection the advice firm would love to see more tax relief for employers to encourage more to take out PMI for their staff.
“There are still a lot of companies out there who would like to provide health coverage to their staff, but can’t always afford the premiums,” Hesch added.
“It would also bring more awareness to group health policies and the practical support they offer to workers.”
Meanwhile Joanna Streames, owner of Velvet Mortgage and Insure Services, echoed this call.
“I’m hoping for higher tax breaks from the government for better workplace provisions and hope this is part of their growth plans. I think most businesses would like to support their staff more but simply cannot afford to.
“There is no confidence currently with the general public for our healthcare system and a lot of people worry about what would happen if they did need to use the NHS.
“For employees just to know they have workplace cover in place, even if not using it, would give great peace of mind and help in attracting/recruiting and importantly retaining team members.
“Small businesses need an extra helping hand right now to create better opportunities which in turn would help relieve the benefits system and NHS and create a better work environment. With more support there would be less sick days and absenteeism.
“I hope any changes are significant enough to make a difference and take place quickly. I think there could be some improvements but fear it will fall short of what is really needed.”
For Marcia Reid, non-executive director at Sherwoood Healthcare, whatever measures the chancellor announces today, the compelling reasons for individuals and companies to invest in health and protection remain unchanged.
“One of the challenges our sector currently faces is sustainable pricing – affordability is key. High inflation, interest rate and corporation tax all impact the cost of delivery. And insurance premium tax is significant in increasing the cost of purchasing health and protection cover,” Reid told Health & Protection.
“Additionally, while National Insurance is an essential levy, it is a burden for employers and reduces the amount of disposable income for consumers. I believe that the most important thing the chancellor can do for businesses and individuals is to reduce the National Insurance and Corporation Tax.”
But Ron Wheatcroft, technical manager at Swiss Re, called on the chancellor to lay out plans to harness vocational rehabilitation– including where these services are provided through a third-party arrangement such as an employer-bought insurance policy.
Supporting his argument Wheatcroft pointed to five factors which need taken into consideration – the first of which is around defining what constitutes occupational health (OH) and vocational rehabilitation (VR).
“The definition of OH must be robust. In the context of the government’s aims, it should include the wider breadth of specialists who deliver VR services, in addition to the more traditional OH services (such as workplace immunisations).
“Definitions should cover how different OH and VR services compare based on the following principles: accessibility, proactivity, inclusivity, outcome-focused and targeted actions that tackle proven and known causes of absence. Importantly, there needs to be additional information where services are provided by insurers.
“We believe that ‘OH and rehabilitation services’ or ‘return to work services’ is a clear definition that would support better outcomes for employers and workers.”
The second factor Wheatcroft points to centres around greater incentives to push SMEs to implement support.
“Increasing the £50 benefit in kind (BiK) exemption could encourage more employers – and SMEs in particular – to provide OH and VR services without the disincentive of having to set up the administration for BiK payments.
“Increasing the limit would reduce administration and make it easier for all employers to support their whole workforce.
“Enhancing obligations relating to the ‘Written Statements of Employment Particulars’ – often known as the Day One Statement – could further support employees. While benefit statements are mandatory on ‘day one’, there is currently no requirement to update these when benefits change.
“The government should make it mandatory for all employers to issue an annual statement reminding employees about their benefit entitlements, with an additional communication being shared when benefits change.
“An example of this is where an employer elects to reduce its maximum benefit payment period from going through to 60, 65 or 70 to one where benefits cease after five years of disability.”
The next factor Wheatcroft details is building on the role of employee assistance programmes.
“There needs to be a greater focus on the role of Employee Assistance Programmes (EAPs) in supporting people in the workplace,” he added.
“There are similarities between the way an EAP supports employees and social prescribing models in terms of how they can offer practical support to help people with causes of stress which have a more non-medical root cause.
“However, the ability to support employees via an EAP can be limited by tax constraints on the scope of the benefit.
“EAP costs can start at £2-£25 per employee per annum, so applying any P11D/BiK charge on this low-cost but valued benefit seems extreme, particularly for supporting employees with mental health issues. Removing all P11D charges for EAPs would enable employers to support health and productivity in the workplace better.”
Wheatcroft said there also needs to be an emphasis on ensuring standards being implemented reflect the diversity of workers and businesses alike.
“Care needs to be taken to ensure that the government’s end-proposal reflects workplace diversity and different types of organisations, both by size and types of work carried out,” Wheatcroft said.
“A clear evidence-based approach based on the biopsychosocial (rather than medical) model, with a focus on psychosocial factors affecting recovery should be central.
“The nature of group insurance policies naturally supports businesses to comply with Equality Act requirements. More generally, the insurance industry recognises the need to be inclusive and to offer terms to as many people as possible.”
Finally, Wheatcroft pointed to the need for addressing barriers to take-up of relevant insurance products.
“The government should address the barriers to take-up of insurance products that provide OH and broader health and rehabilitation support,” Wheatcroft continued.
“For individuals who do not have disability income protection through their employer, there can be a disincentive to purchase an individual insurance policy as the payments on claim are treated as unearned income when entitlement to Universal Credit is assessed.
“The government should consider measures to reduce the impact on claimants whose circumstances may be very different from when they purchased the policy.”