Are your Group Risk benefits and insurance fit for the modern workforce?

Are your Group Risk benefits and insurance fit for the modern workforce?

Looking after your employees works both ways; staff can rest assured knowing that they’re supported, giving them peace of mind, and in turn, levels of presenteeism and absenteeism can be reduced.

However, organisations need to improve their communication of their benefits to their employees, not only to maximise the benefits spend but also to make sure all valid claims are paid.

Paul Avis, Group Marketing Director at Canada Life, spoke to HR Grapevine and elucidated and educated us on the specifics of Group Critical Illness and Group Risk benefits where communication is especially important.

“Group Critical Illness (GCI) provides a one off, lump sum payment to an employee once they

are diagnosed with and survive a serious condition, usually for 14 days,” he explains. “Unlike the individual market which can have literally hundreds of claims payment options, with partial payments specifically, the Group market recognises core conditions such as cancer, heart attack, stroke and MS, which represent around 90% of all claims, represent the majority of concerns an employee has. A simpler, more easily understandable contract is important where there is no personal or face to face advice as it is the employer buying the contract on behalf of the employee.

“Cancer is the biggest single cause, and whilst cancer-specific cover can now be purchased, the cost differential between that and a full GCI policy is often deemed not to be enough. As a result traditional policies dominate the market with the core conditions covered and additional ones as an option.”

He adds that there are two formats of the benefit: employer paid, which attracts a P11/benefit in kind charge, and employee paid. The benefit is paid to the employee in both cases and so it is who has paid for the premium that defines the tax treatment.

Some organisations will provide a core benefit amount and then an employee ‘tops up’ using a voluntary or flexible benefit platform approach. The latter employee paid option, represents 65% of all premiums paid and has seen a 12.1% increase in voluntary/flex arrangements in 2016 in contrast to a 1.6% growth in employer paid versions.

GCI is one of the most popular benefits in the online election world as not only does it appeal to single people, everyone knows someone who has had a cancer heart attack or stroke.

“‘Critical Illness’ illustrates the difference in underwriting approach between Group

and individual protection business, with individual business being medically underwritten at outset.” Avis elaborates. “It means that the majority of employees are offered full cover at standard rates but in individual protection some are loaded, have some conditions declined, have exclusions imposed or are declined cover.

“In contrast, Group business allows employees, and optionally their partners, into the scheme subject to a pre-existing condition clause, and a time limited ‘related conditions’ clause. In effect it would be impossible for us to medically underwrite all employees, and this would increase costs significantly, and so we do this job at the point of claim in effect. Children’s cover is also available which, as I am sure can be appreciated, is a very emotive but important area of the cover.”

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