The health insurance sector is being urged to participate in HM Treasury’s workplace health consultation but “has a job on its hands” to convince the department that tax incentives are worthwhile.
However, insurer Equipsme said the consultations were an opportunity for the industry to make the case directly to government.
Axa Health, which has previously called for tax breaks, also confirmed to Health & Protection that it will be responding to the consultation and echoing the positive role health insurance can play.
Woolly and narrow
Equipsme founder and managing director Matthew Reed, who told Health & Protection last month that he has visited Downing Street three times to campaign for the removal of P11D tax on employee health benefits, said he was “absolutely delighted” to see the government consulting on tax incentives for occupational health.
But he added: “I am under no illusions that we have a job on our hands to convince the Treasury that some level of health insurance should be added to the scope.”
He explained: “The definition of occupational health is both woolly and narrow.
“The government’s objective is essentially to encourage companies to keep people well and working, or at least get them back to work as soon possible after illness or injury.
“Yet the top three reasons for sickness absence aren’t things that can be solved with ergonomic chairs, desk positioning, or even an annual medical assessment.
“Mental health, minor illnesses, and musculoskeletal aches and pains are issues that need practical and early intervention and support that itself is often outside the scope of occupational health.
“It is also increasingly not being quickly provided by the NHS. And it’s in that waiting period that those minor ailments or injuries can become more serious conditions.
“Which is precisely why more and more businesses are investing in group health insurance policies – providing instant pathways to things like GP consultations, physiotherapy sessions, mental health support, and early diagnosis.”
Done the maths
Reed added businesses have “done the maths” and it adds up.
“Our modelling for a recent client, for instance, showed that just a 1% reduction in sickness absences would create a £650,000 saving in productivity in year one of their policy,” he continued.
“With the UK slipping down the G7 productivity tables, it’s well worth listening to what businesses think is going to make the biggest difference to staff wellness and wellbeing.
“Tax breaks for PMI would help to achieve the government’s core goal, by making it easier and more attractive for more businesses to get more cover for more – or all – of their employees.”
But according to Reed, such tax breaks need not cost the Treasury as much as it thinks.
“We’ve long been calling for the abolition of P11D taxation for lower paid staff in the 0% and 20% tax brackets – I’ve been to Downing Street to meet three different administrations about this,” Reed said.
“Our figures suggest the cost of that could be at least partly offset by Insurance Premium Tax as more businesses take the opportunity to buy insurance.
“Certainly, it is worth a second glance. And this consultation gives us as an industry a new opening to make our case directly before government, and on behalf of our clients and customers. Let’s make the most of it.”
‘Most impact on health’
Another organisation which called for such tax breaks on PMI ahead of the Budget was Axa Health.
At a panel discussion hosted by the All Party Parliamentary Group (APPG) for Insurance and Financial Services in Westminster, Axa Health commercial director Fergus Craig championed the work the insurance industry does in keeping people at work.
And Craig revealed Axa Health would also be responding to the consultation.
“We have previously recommended broader incentives which include all private medical insurance and health and wellbeing support services, as we believe these will have the most impact on health and tackle the scale of economic inactivity,” Craig continued.
“For example, the businesses we support with over 250 employees contribute £442m to the economy and society each year.
“However, we understand the fiscal constraints the government is under, and we look forward to supporting measures which will take steps in the right direction for workforce health especially the additional preventative services within scope such as screening and behavioural change which help to prevent illness in the first place”.
At the APPG discussion Craig Tracey MP said as the UK strived towards achieving better public health outcomes, it was clear that it had to become more effective at delivering health and wellbeing support services to the public, “which we all have a responsibility to help achieve”.
“Employers can use their market power to introduce affordable and valuable benefits to employees, while insurers can use their expertise and experience to develop interventions that keep employees healthy and in work,” Tracey added.
“The Frontier Economics report, commissioned by Axa, provides some key practical steps that can be taken to improve the nation’s health and productivity.”
