Attempting to save money on removing duplication of added value services from group risk products and employee benefits could actually increase an employer’s tax liabilities.
This is according to Ron Wheatcroft, technical manager of Swiss Re and co-author of Swiss Re’s Group Watch report 2025.
Presenting findings from this year’s report, Wheatcroft said that while added value benefits were seen as “very positive” among respondents, there were suggestions from respondents about duplication of these services, particularly when an employer has different insurances with different insurers, which could create a tax liability.
Asked by Health & Protection to clarify this issue, Wheatcroft said: “You could end up with four schemes all with major added value benefits.
“Within that, there is likely to be some duplication because they are providing ostensibly the same benefits.
“What’s happened particularly this year is that with the wider background of pressure on costs, it has led more employers to think about where can we save money then?”
Wheatcroft maintained that duplication is an area where an employer or an employee benefits consultant might look at to try and save money.
“They may ask do I need four EAPs? They are an extreme case – but do I need four? Do I need one? Could I have it on a menu basis?” he continued.
“The problem with a menu basis is it then can potentially create a tax liability as it becomes an optional benefit. That’s the other side of it.
“There is a logic to it in simple terms, but the tax issue is quite an important one for people to bear in mind.”
