Kirwan says the Government is receptive to industry proposals that smaller employers be offered tax breaks if they adopt products that boost the productivity of their staff, whether by improving workplace health and engagement, reducing absence or helping staff getting back to work after illness.
He says products could be standalone or form add-ons to group private medical insurance, group income protection or employer liability policies.
But before formal proposals can be worked on the insurance industry must clean up its act on other, non-workplace issues, says Kirwan. He says Government expects movement on two key areas – non-disclosure and payment protection insurance.
Progress has been made on the non-disclosure issue in recent years, with guidance on clearer application forms in 2006, further guidance of telephone and online processes last year and an upswing in percentage of claims paid coupled with a downturn in claims to the ombudsman.
But Kirwan says the industry has to get over bad headlines on PPI in 2008 before substantive proposals can be worked on with the Government. The project will be dealt with as part of Department for Work and Pensions’ wider Pathways to Work agenda.
Kirwan says: “The Government is engaged in this debate around tax relief for SMEs taking health and wellness products and the industry is pushing against an open door. But we have got to sort the reputational issues on non-disclosure and PPI out first.
“This is a win-win situation for employers, the Government and UK plc in general.”
Dave Priestley, sales director at PruProtect, says: “This sounds like an exiting step because the effect of a tax break would give the sector a considerable boost. But the key to the success of this proposal is that the tax benefit is reflective of a genuine health and wellbeing impact on employers who are encouraged to do the right things for their employees rather than simply shifting products.”