United Kingdom Employee Benefits: Ensuring Your Insurance Is Up To Date
This week sees the implementation of changes to insurance disclosures which, coupled with an upcoming increase in insurance premium tax, mean that the time is right to review your employee benefit insurance policies.
The Insurance Act 2015 comes into force on 12 August 2016 and applies to new policies as well as variations to existing policies. In the context of employee benefits, there are a number of areas where insured employee benefits are likely to be affected, for example medical / health insurance. The Act will have a significant impact on how policies are brokered, for example, by introducing a duty of ‘fair presentation’ on policyholders. Employers will need to understand their duties under the new legislation and change their practices accordingly.
This comes at a time when the standard rate of insurance premium tax will shortly rise to 10% – a significant increase on the 6% rate that was in place last year. The growing cost of insurance cover is encouraging some employers to consider corporate healthcare trusts as a cost-effective alternative.
Excepted Life Policies, which fall outside the registered pension scheme regime so have tax advantages particularly for higher earners, are also growing in use.
These changes are inspiring many companies to revisit their insured benefits to ensure that they continue to offer value for money and remain compliant.