In today’s Budget Jeremy Hunt is expected to introduce new incentives to encourage small business to provide health benefits for employees.
It is understood that the chancellor will announce subsidies for SME’s that introduce occupational health services. This is likely to be part of a series of Budget announcements designed to boost productivity, by encouraging people back to work or putting in place measures to help people stay active in the workforce.
Alongside these subsidies for SMEs, Hunt is also expected to change the role of GPs when it comes to managing long-term sickness. GPs will now have the option of referring people to a new service to assess what aspects of work an individual can do, rather than simply being signed off sick.
The health and benefits industry has for a number of years called for better incentives to help employers offer a broader range of health benefits. These changes could benefit employers, by reducing the cost of health benefits and ensuring staff get treatment more quickly particularly for chronic conditions, but should also provide cost effective for government if they can reduce pressure on NHS services, and ensure more people stay in work, boosting economic output and tax revenues.
In a recent roundtable event held by Corporate Adviser questions were raised about the fairness of employees paying tax, via a P11D statement, on the healthcare benefits paid for by employers. This can include payments for private medical insurance as well as occupational health and cash plan benefits.
Speaking at the event ,Healthcare RM CEO Pamela Gellatly said that these payments can be a disincentive for low earners to join a healthcare scheme. Gellatly said she had received feedback indicating a sense of unfairness that people on lower wages were having to pay the same P11D charge as higher earners.
Healthcare consultants also pointed out another potential unfairness with the way schemes are sometimes currently administered, with the P11D liability is often spread at a flat rate across the entire scheme, even though the value to older workers is significantly higher than it is to younger ones. Adopting age-related premiums can address this issue though, and ensure the cost is lower for younger workers.