What is Group Income Protection?
Group Income Protection is also know staff sick pay insurance, employee income protection or business long term disability cover.
It is provided so that should an employee be unable to work due to a sickness or injury then the policy would pay a monthly amount for the staff member covered under the policy.
How much of the staff’s monthly benefit they receive and add-on’s such as pension and national insurance contributions depend on the package chosen by you, the employer.
Why do I need Group Income Protection?
Employees benefit from Group Income Protection as staff sick pay insurance shows your employees that you genuinely care about their financial well-being and don’t just see them as another face in the corporate crowd.
Group Income Protection provides employees with peace of mind that you are providing them and their families financial protection when it’s needed the most.
It may be a benefit most valued by your staff, however, that doesn’t mean that there aren’t many positives for you as a business.
In the UK we have one of the fastest evolving and highly competitive job markets in the world.
Employers can often find their best talent are going to be regularly targeted by competitors. For businesses it’s vital to ensure you’re leading the way when it comes to providing staff benefit packages and providing your employees sick pay insurance cover.
As an employer, if a member of staff goes off sick, how do you manage the absence? Who do you turn to for advice? How much does the advice cost you?
With a Group Income Protection policy in place, you get access to rehabilitation and absence management specialists from day one, or as soon as you find out an employee is sick.
A provider will help you to take control of the situation, and mitigate any potential long and catastrophic long term damage to the productivity of your business, and depending on which cover you choose, even provide financial support to temporarily replace an employee.
Now isn’t that peace of mind? More on this below…
How much will Group Sick Pay Insurance Cost?
Our employee benefits industry trade magazine revealed in one of their recent buyer guides that group income protection comprehensive insurance can cost between 1% and 2% of a company’s gross payroll, however limited term plans (paying the benefit for 2 years or 5 years as an example) could cost a client as little as 0.25%.
We would suggest using these figures for illustrative calculations as depending on your industry, absence record, the average employee age, as well as many other variables, the cost could be significantly different.
If your company already has a group life insurance policy you may be able to get a discount placing the both with one insurer, Hooray Health & Protection’s team of experts can help negotiate these deals for you by leveraging our existing relationships.
Is Group Income Protection Taxable?
Employers can benefit from tax advantages when looking to set up group income protection. As they are paying for the employee benefit, employers will usually be entitled to get corporation tax relief on the premiums paid.
Employees can also benefit from the fact that the policy is not usually treated as a taxable P11D benefit in kind, so no additional tax is usually to be paid by employees for this superb benefit.
It is worth stating this is based on our experience in the industry and cases we have worked on. Hooray Health & Protection are at our heart employee benefit brokers, and not tax advisers, so we would also recommend liaising with your accountant or tax adviser for any queries – it’s a liability thing!
Does Group Income Protection have any added value services?
At Hooray Health & Protection, we feel the approach that all brokers should be taking when assisting their clients with group income protection policies is that the added value services are worth as much as, if not significantly more than, the insurance benefit itself.
We believe that early intervention an incredibly important tool in relation to absence management.
Getting help on day one of notification of absence is paramount to preventing longer-term preventable absence issues.
Let’s review the two main added value service that 80% of group sick pay insurers offer and, in our opinion, the two main services they should all be offering below.
Most insurers will look to provide early intervention services for group income protection to ensure they are helping support employees back to work.
On the first day an employer is notified an employee is off sick or injured, they are encouraged to contact their insurer to provide support, and seek guidance on how to manage the absence effectively.
Insurers can help provide support services at no extra cost to help with an employee’s return to work.
An example would be, an employee who has been in a serious road traffic accident and needs physiotherapy to walk again.
In this scenario the business sick pay insurer would look to fund private physio to ensure they are getting the best care available and don’t have to join the NHS waiting list.
Most employers are surprised when we inform them about early intervention services that insurers provide, but early intervention is actually in everyone’s best interest.
If we consider the fact that employee is receiving the best care available, the employer will have their employee back to work sooner as they aren’t waiting on the NHS which in turn allows them mitigate damage to productivity as well as other costs such as overtime or temporary cover whilst the employee is off work (replacement staff costs can also be insured as an additional business benefit).
Helping an employer with getting an employee back to work is in the insurer’s interest, so businesses can rest assured that everyone wins.
Employee Assistance Programme
EAP’s are provided for no extra cost with most sick pay insurances however it is worth mentioning these are usually outsourced to workplace health and well being providers.
Employee Assistance Programs are a 24/7 confidential helplines for employees to discuss matter such as:
- Mental health
- Financial well-being
- Legal Support
- Medical helpline
- Workplace support
EAP’s will also usually cover face to face sessions up to an average of five sessions with a trained counsellor within 15 minutes of your home or work address.
It is worth noting all employees of the company (not just those covered under the business sick pay insurance) will have access to this benefit but will have to complete an initial telephone assessment with a trained counsellor first.
Employee Assistance Programs are completely confidential for employees who use them, and anything disclosed in the sessions will not be reported back to their employers.
It is one of the reasons that insurers will look to outsource these services; to help the employee build a trusting relationship with a workplace well-being provider instead of having the daunting task of discussing traumatic issues with the insurance company assessing your claim.
How can I arrange an Employee Sick Pay Insurance Policy?
We would need an initial fact find call to discuss your business, understand your requirements and establish which variations would be suitable for you and your employees.
Once that has been established, we will reach out to our insurance partners and negotiate the right price for your business’s unique nature of risk.
Your consultant will then arrange a call and talk through the group income protection findings and provide our recommendation for your business.
We are paid a commission from our insurer partners for placing business with them- so you can be assured there will be no surprise costs.
Can Small Businesses buy Group Income Protection?
If you are a small business owner where the company has at least two employees (including yourself) we can help provide Group Income Protection Insurance.
Most of the insurers in the UK market will provide cover to companies with ten employees, but we work with insurance providers that can provide cover for two employees and still charge no fee!
If I leave my employer can I continue my Group Income Protection?
None of the insurers in the UK market currently offer a continuation option when employees leave a ‘Employer Paid’ Group Income Protection scheme.
Hooray Health & Protection do work in the individual Income Protection insurance market and we can provide anyone with a free quote.
Why choose Hooray Health and Protection for Group Income Protection?
We are a team of experts at Hooray Health and Protection who most importantly, understand our industry.
Our company is founded by passionate individuals, all of whom are dedicated to making sure that every single client or customer that we work with has the very best results.
Our experience working for some of the largest employee benefit insurers in the world has provided a priceless insight into how these insurers calculate the price of group income replacement schemes.
We also know how claims managers assess which sick pay insurance claims are valid and the knowledge we have gained from what our direct clients have told us they want from their group income replacement schemes.
If you want to review your existing group income protection scheme or are considering applying for a new policy, feel free to contact us on the details below as we guarantee that we won’t charge you anything for providing a price and a general chat.
Frequently Asked Questions about Group Income Protection
✓ Is Group Income Protection available for companies with two employees?
Most insurers have ten as their minimum number of employees but we work with insurers who can provide cover for businesses with two staff.
✓ When does cover start if an employee goes off sick?
Every scheme has a deferred period which has to be reached before the policy will start to pay. We ask employees/employers to notify us from the first day of absence however as insurers provide early intervention services to help support staff back to work.
✓ Which Company is the best for Employee Sick Pay Insurance?
Every company is different and before making a choice we need to asses the company size, scheme design and risk requirements.
✓ Will it cover any pre-existing medical conditions my staff have?
Pre-existing health conditions are usually covered under ther policy if all employees are actively at work. Depending on how many employees are to be covered, some of the highest earners may be required to complete a health questionnaire.
✓ Does Business Sick Pay Insurance cover Unemployment?
As the policies provided are in place to cover accident and sickness cover we can’t add unemployment cover to the policy. Some schemes provide cover after redundancy for a set period of time however.