The big question

Are the tax changes for rehabilitation proposed by the Frost / Black review of long term sickness a silver bullet for the PMI industry?

Charlie MacEwan, corporate communications director at WPA

No. Not as far as is clear so far, anyway. The devil will be in the detail, and my fear is that these tax changes will come with strings attached for those with low incomes, which undermines everything that private medical insurance is all about.

The change we need is for employers to appreciate the impact of healthcare in the workplace. When we get figures in the UK like those Johnson & Johnson figures in the US, showing positive returns for every pound spent on health, we will see it cease to be a cuddly thing that HR departments talk about and become something finance directors feel they need to know about.

The problem with tax breaks is they are tactical. They are given and they can be taken away. The experience of the removal of tax breaks for the over 60s was that taking them away was more painful than having them in the first place.

Alex Perry, director of healthcare provisioning, Bupa

They say silver bullets don’t exist. But if these proposals are introduced in full, it could lead to greater take-up of absence management and private medical insurance. If adopted, these proposals could drive developments of products that see more blending of absence management tools with private treatment access.

We think the adoption of these proposals will be a boon for the broader business community. Anything that delivers faster treatments when individuals need them will not only have an effect on return on investment but will also drive engagement and be good for the employees too. And anything that encourages businesses to pay for care has to be a good thing when you take into account the strains on the NHS.

Overall we welcome the package of recommendations in this report.

But we are very early in the process so it is too early to tell whether this will turn into action, and therefore into a benefit for the industry. But there is the potential for positives.

Karen Gamble, director, health & wellbeing, Gallagher Emp Bens

No. I think this report will end up being more damp squib than silver bullet for the wider PMI market although the potential for rehab only products is more exciting.

At the moment private medical insurance is so expensive that, whether you get tax breaks or not it is difficult to get new to PMI insurers to say this is a good idea and take out products.

It may be enough to keep schemes from being dropped, but then again, it is not clear whether it will be basic rate taxpayers only who get the tax break, or that everyone will get it at the lower rate.

Will these proposed tax changes ever see the light of day? It is hard to see. We have the Treasury saying No way, Jose on tax increases, and yet this report runs counter to that. But then this is just one report, like the Demos report on income protection.

Maybe if we get enough reports like this one day someone will finally actually put something into legislation.