As well as removing the link to State benefits, getting scheme termination ages right and providing budget options, a further area to discuss is around pension and National Insurance contributions. 2016/17 National Insurance is 13.8% of salary plus a further contribution for pensions at, for example, 10%. Would you be happy to keep an employee in service who is costing your organisation almost a quarter of their salary while not working for you?
Retaining disabled employees is compliant with the Equality Act 2010. Continuous service means that they will still have access to other benefits such as death in service cover, private medical insurance or cash plans. These benefits can prove invaluable if an employee develops a long-term illness, when these benefits are most needed. Surely the best approach is to put the employee in a cost-free environment to the organisation while they are in claim, to enable them to continue to be employed? If their employer chooses to cease a contract after any sick pay period has finished due to the pension and NI costs, then staff can lose such benefits. What is the point in having other benefits if contracts end as soon as someone is sick?
On a positive note, GIP schemes which cover pension and NI contributions can help to protect employees’ income in working life and retirement. After all, where else can you get a waiver of contribution/premium for pension contributions these days?
Focus on benefits and quality – not just price
For advisers looking to get into the corporate space, the Group Risk market can be used to unlock doors not just on the prospect of competitive pricing, but on the quality aspect of the insurer proposition, which would make a refreshing change to most prospects. Across all products there are additional services, usually included within the premium paid, and both insurers and suppliers want them to be used.
For example, GIP providers are encouraging industry-wide increased usage and profile of Early Intervention Services (EIS), demonstrating the importance and value of accessing vocational rehabilitation early. Canada Life has quantified that 90% of EIS referrals do not result in a claim, leading to reduced claim incidences for employers and sustainable premiums. Of these, 80% of employees who are referred to EIS make a return to work before claiming. Simply put: we are offering outsourced vocational rehabilitation at no additional cost. What a “wow!” that will get!
As mental ill health is the cause of 28% of our claims and 19% are musculoskeletal, you can see why this service is important. Our research shows that over half (57%) of UK employees have suffered from mental health problems while in employment, with stress (43%) and depression (26%) the most commonly experienced problems. There is a clear need to support employers. Removing the evident challenge of complex mental health, management of subjective cases will genuinely delight managers and employees, let alone the HR team (if the organisation has one).
