Five considerations when going down the group risk benefits route Five considerations when going down the group risk benefits route

Five considerations when going down the group risk benefits route
14 Dec 2017

Group risk protection benefits such as employer-sponsored life assurance, income protection and critical illness cover are cost-effective and highly valued by employees, but research shows that employers do not always make the most of them. Here are some hints and tips to help you do just that:

1. Why introduce group risk benefits?

Group risk benefits provide employees with financial protection at a time when they or their families need it most. On the one hand, this enables employers to position themselves as caring organisations, while on the other, financial peace of mind means that personnel are more productive and engaged.

There is a huge range of options relating to these kinds of benefits that suit every budget, with support services included as part of the overall package.

2. Of what do support services consist?

Employers can, among other things, make use of advice relating to HR and employment law, telephone helplines to assist with difficult situations, mediation services and the like. For employees, meanwhile, offerings range from Employee Assistance Programmes and fast-track access to counselling to physiotherapy and early absence interventions.

But providers are also starting to encourage more positive health-related behaviour by making services such as health-tracking apps and mental health support available to staff in a bid to improve their general health and provide savings that can be used elsewhere.

3. What information do you need to provide to a potential group risk supplier?

The more information you can share about the business, the better that advisors and providers will be able to help you chose a costeffective product to meet your needs now and into the future. Such information includes your future growth strategy and how it is likely to affect recruitment and retention rates, a typical employee lifecycle, what health and safety programmes you have in place and what other benefits such as private medical insurance and health screening you provide.

It is also vital to ensure that the group risk products you opt for reflect your organisational policies. For example, the structure and focus of a group income protection policy should mirror how long the organisation is prepared to support employees who are unable to work.

4. What is the best way to ensure that personnel take up group risk benefits?

Although hard work, in order to ensure regular use of your group risk benefits and related support services, it is important to integrate them into your procedures, protocols, trigger points and communications. It also makes sense to partner with your group risk advisor and provider as doing so will make more innovative outcomes possible.

5. What are the key pitfalls and what do you need to look out for?

The best way to avoid expensive mistakes is to think ahead and plan. The insurance you choose should reflect the benefits you have promised and the audience to whom you have promised them.

But it is also crucial to give your provider the information they require in a diligent and timely manner, not least because you are now obliged to do so under the terms of the Insurance Act 2015, which came into force in August 2016.

For instance, if changes such as buying a new business or altering employment terms and conditions are afoot, inform your adviser and provider well in advance. Doing so means they can work out how such changes might affect the cost and terms of your current scheme. It is always easier to negotiate pre-rather than postevent.

Check too that your benefits comply with legislation. For example, in the UK, following the removal of the default retirement age, group risk insurance may legally cease for employees at the age of 65 or at the state pension age (SPA), which is scheduled to rise over the next few years - whichever is later.

Although the SPA has already increased to 66, 67 or 68 for many people (and could go beyond that in future), some policies still have a fixed age for cessation of 65 (or 60 in the case of women) and fail to define the cease date as “65 or SPA, if later”. This situation exposes employers to uninsured liability for benefits arising after that the point stated.

If you wish to continue providing benefits to employees after the local official retirement age, it will be necessary to think ahead. While providers can be flexible here, again it is always easier to negotiate terms in advance rather than when your first employee hits the required age threshold.

Also be sure that your group income protection policy reflects any recent changes to state benefits. In fact, reviewing the design of your group income protection benefits on a regular basis will ensure that it is fit for purpose and still meets your needs into the future.

 

Katharine Moxham is spokesperson for Group Risk Development (GRiD), a UKbased industry body for the group risk protection sector. She has previously worked for Towers Perrin, Aon Consulting and JLT Benefit Solutions as consulting director at its health & risk practice.

Group risk protection benefits such as employer-sponsored life assurance, income protection and critical illness cover are cost-effective and highly valued by employees, but research shows that employers do not always make the most of them. Here are some hints and tips to help you do just that:

1. Why introduce group risk benefits?

Group risk benefits provide employees with financial protection at a time when they or their families need it most. On the one hand, this enables employers to position themselves as caring organisations, while on the other, financial peace of mind means that personnel are more productive and engaged.

There is a huge range of options relating to these kinds of benefits that suit every budget, with support services included as part of the overall package.

2. Of what do support services consist?

Employers can, among other things, make use of advice relating to HR and employment law, telephone helplines to assist with difficult situations, mediation services and the like. For employees, meanwhile, offerings range from Employee Assistance Programmes and fast-track access to counselling to physiotherapy and early absence interventions.

But providers are also starting to encourage more positive health-related behaviour by making services such as health-tracking apps and mental health support available to staff in a bid to improve their general health and provide savings that can be used elsewhere.

3. What information do you need to provide to a potential group risk supplier?

The more information you can share about the business, the better that advisors and providers will be able to help you chose a costeffective product to meet your needs now and into the future. Such information includes your future growth strategy and how it is likely to affect recruitment and retention rates, a typical employee lifecycle, what health and safety programmes you have in place and what other benefits such as private medical insurance and health screening you provide.

It is also vital to ensure that the group risk products you opt for reflect your organisational policies. For example, the structure and focus of a group income protection policy should mirror how long the organisation is prepared to support employees who are unable to work.

4. What is the best way to ensure that personnel take up group risk benefits?

Although hard work, in order to ensure regular use of your group risk benefits and related support services, it is important to integrate them into your procedures, protocols, trigger points and communications. It also makes sense to partner with your group risk advisor and provider as doing so will make more innovative outcomes possible.

5. What are the key pitfalls and what do you need to look out for?

The best way to avoid expensive mistakes is to think ahead and plan. The insurance you choose should reflect the benefits you have promised and the audience to whom you have promised them.

But it is also crucial to give your provider the information they require in a diligent and timely manner, not least because you are now obliged to do so under the terms of the Insurance Act 2015, which came into force in August 2016.

For instance, if changes such as buying a new business or altering employment terms and conditions are afoot, inform your adviser and provider well in advance. Doing so means they can work out how such changes might affect the cost and terms of your current scheme. It is always easier to negotiate pre-rather than postevent.

Check too that your benefits comply with legislation. For example, in the UK, following the removal of the default retirement age, group risk insurance may legally cease for employees at the age of 65 or at the state pension age (SPA), which is scheduled to rise over the next few years - whichever is later.

Although the SPA has already increased to 66, 67 or 68 for many people (and could go beyond that in future), some policies still have a fixed age for cessation of 65 (or 60 in the case of women) and fail to define the cease date as “65 or SPA, if later”. This situation exposes employers to uninsured liability for benefits arising after that the point stated.

If you wish to continue providing benefits to employees after the local official retirement age, it will be necessary to think ahead. While providers can be flexible here, again it is always easier to negotiate terms in advance rather than when your first employee hits the required age threshold.

Also be sure that your group income protection policy reflects any recent changes to state benefits. In fact, reviewing the design of your group income protection benefits on a regular basis will ensure that it is fit for purpose and still meets your needs into the future.

 

Katharine Moxham is spokesperson for Group Risk Development (GRiD), a UKbased industry body for the group risk protection sector. She has previously worked for Towers Perrin, Aon Consulting and JLT Benefit Solutions as consulting director at its health & risk practice.

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