Employers Want Their Say On Sick Pay

Feb. 18, 2010 - PRLog -- •   35% would support a state disability provision opt-out for employers with a Group Income Protection policy
•   50% would be more likely to offer group risk benefits if incentivised

Employers are calling for more say in how the Government funds incapacity benefit and employment and support allowance (ESA) for the estimated 2.62* million UK claimants according to new research from Group Risk Development (GRiD), the trade organisation for the Group Risk industry.

Currently national insurance from UK businesses makes a sizeable contribution towards the estimated £100 billion** annual cost of working age ill health – they also provide a further £40 billion in long term sickness benefits over and above state provision.  But GRiD’s research indicates that employers are growing dissatisfied with putting money into state coffers and hints that they may feel better placed to manage workplace absence themselves.
According to the survey, 35% of businesses would actively support an opt-out of state disability provision for those with a Group Income Protection (GIP) policy in place.  In addition, when asked if a government incentive, such as an opt-out, would encourage them to look into providing GIP benefits for their employees, 50% agreed.    
Katharine Moxham, spokesperson for GRiD explains: “Findings from the new GRiD research suggest that employers are beginning to baulk at handing over responsibility for important funding decisions – like sick pay provision - to central Government.  They think they could do a better job themselves!”
The survey suggests that employers are already looking beyond state funded benefits to meet the specific protection needs of their workforce.  45% of our sample said they offered employees financial support over and above statutory sick pay.  Moreover, 22% of those questioned protected themselves and their employees using a GIP policy.  If properly harnessed, the opportunity for employers to provide employee protection geared to their workforce needs is phenomenal – and this can only be beneficial for the State.

Currently the State uses Work Capability Assessments to identify who could usefully return to work rather than qualify for ESA. However, GIP policies allow employers to have a much more sophisticated grasp of the situation and can maximise the chance of getting an employee back to work promptly.  Going forward it’s employers rather than Government who are tasked with ensuring goals of the Welfare Reform Act are met – so surely they should be given proper recognition for their achievements?
Katharine Moxham continues “We already know that implementing Group Income Protection has significantly reduced the UK’s protection gap.  So surely it’s in the Government’s interest to encourage more employers to invest in this benefit?  There’s certainly a strong argument for a reduction in NI as an incentive for offering a GIP scheme. And given the amount that employers potentially save the State in this area, perhaps there is even a case to be made for increasing NI contributions for employers that do not offer a GIP scheme – after all their employees will make far greater use of the State provided ESA.”  
“Broadly speaking, policymakers are in tune with the need to create a “supportive network” to replace the spoon fed nanny state.  So let’s hope this means that self investment in protection will feature in party manifestos during the run up to this Spring’s election campaign.” She concluded.
For further information about Group Risk Benefits visit www.grouprisk.org.uk
-Ends-
For more information, please contact
Ursula Delaney or James Terry
GRiD Press Office
Teamspirit Public Relations
78 Cowcross Street
London EC1M 6HE
T: 020 7360 7878
GRiD@teamspiritpr.com



About GRiD Employer Research
The Group Risk Employer Research study was undertaken in October 2009 among a sample of 500 UK businesses.  Research was conducted by Lightspeed Research for Group Risk Development (GRiD).  Alico, Aviva, BUPA, Canada Life, Enrich, Friends Provident, Legal & General, Munich Re, Portus, Swiss Re, Unum, Watson Wyatt and Zurich Corporate Risk sponsored the project.  
Additional Statistics:  
* DWP 2009
** Dame Carol Black’s report “Working for a healthier tomorrow”


About GRiD
Founded in 1998, Group Risk Development (GRiD) encourages awareness and uptake of corporate group protection benefits – income protection, group life insurance and critical illness cover – on behalf of its members which include insurers, reinsurers and intermediary businesses.
Under the chairmanship of David Cross, Head of Benefits, General Consulting, Towers Watson, GRiD aims to enhance the industry’s profile among media and stakeholder groups. The Group provides a collective voice to Government and participates in industry wide initiatives such as the qualification in Group Risk launched jointly with the Chartered Insurance Institute. In addition, in May 2009, the Group appointed its first dedicated spokesperson, Katharine Moxham, formerly Consulting Director, Health & Risk at Jardine Lloyd Thompson to provide expert media comment on a full range of group risk issues.