Insuring against long term sickness

Mental-health-at-work

Employers and employees experience considerable disruption during long-term sickness. For absent employees it can be a stressful and worrying time.  For their colleagues, workloads may be stretched by taking on extra tasks, affecting morale. For employers, particularly SMEs, losing valuable staff can affect productivity levels and wasted time can be spent seeking temporary replacements.

The abolition of the Statutory Sick Pay (SSP) Percentage Threshold Scheme in 2014, stopping employers recovering SSP from the government, increased the burden on the employer. Reduction in longer term State benefits and the increasingly rigorous qualification process further diminishes the possibility of relying on the State during sickness absence.

Now seems like a good time for all companies, especially SMEs, to insure against these losses.

Benefits to employees

Group Income Protection (GIP) protects employees against one of the the main impacts of long-term sickness: loss of income. Financial strain is often an added and stressful symptom of long-term illness.

GIP can be invaluable in providing a long-term income. Traditionally the benefit is paid from a set time after absence commenced, until they recover or leave employment. Importantly, the employee remains in employment, continuing to contribute to workplace pensions and other such benefits. Any entitlement to other employee benefits is also protected.

The benefits are not only financial. Help and guidance from an experienced rehabilitation specialist can really make a difference to employees who have been away from the workplace for lengthy periods. Their support can help with feelings of isolation and ease the return to work, with the reassurance that any return to work plans will be prepared with full agreement from their General Practitioners.

Benefits to employers

The burden of sick pay can go far beyond financial costs for employers. In SMEs, where workplace relationships may be close, employers will be keen to do the best for their staff – yet this can be difficult to get right. Having GIP in place moves some of the responsibility of providing for an employee with a long-term illness to the insurer.

Engaging with rehabilitation services can successfully de-personalise the return to work, helping employers to ensure the most appropriate and suitable outcome for all involved.  Additionally, this can save on the cost of a diminished workforce or having to recruit a new staff member requiring training.

In some cases, having GIP in place could avoid long-term sickness altogether, removing the need to make statutory sick payments. A long-term absence from work may be preventable by using an embedded Employee Assistance Programme (EAP), often provided as part of a GIP policy. EAPs are a good way to support and maintain the health of employees, with many services that help to identify and resolve personal concerns that may affect job performance. The growing experience of Early Intervention Services is making excellent progress in keeping employees either in work, or absent for only a short duration.

Above and beyond protection

GIP is first and foremost a concrete layer of protection, able to withstand changes in legislation leaving State benefits falling increasingly short. This peace of mind for employees and employers cannot be understated. For SMEs in particular, the chance to boost protection against long-term illness may prove invaluable to small teams stretched by heavy workloads.

The short-term benefits of increased morale coupled with long-term betterment of health and productivity makes this a more than worthwhile investment. With only around 17,000 insured schemes in the UK, it can be a differentiating benefit to attract up-and-coming talent, or retain the experience you’ve worked hard to cultivate.

About Paul Avis

Paul Avis first joined Canada Life Group Insurance as a Sales and Marketing Director in 2009. He became Marketing Director in January 2013 in order to focus on proposition and market development initiatives. In an intermediated B2B marketing environment, the organisation is seen as a technical, thought leader in the complex arenas of employee health management and protection. Paul joined Canada Life from HR services organisation Ceridian, where he carried out the role of corporate development manager.

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