Ellipse is dropping its ‘actively at work’ conditions in favour of a four-week absence condition in a bid to improve certainty of cover for employers, advisers and scheme members.
The insurer says the move has been prompted by requests from advisers concerned at the potential uninsured risks their clients were facing.
Actively at work conditions are used widely by insurers to protect them from taking on individuals who are absent from work due to sickness absence. Such employees are seen as presenting a higher risk of becoming a claim than their colleagues who are working, and are not normally provided with cover until they return to work. But where cover is provided on the basis of a quote obtained some time earlier, an employee can be absent at the time cover starts, leading to them not having cover without them or their employer realising.
Ellipse CEO John Ritchie says: “This is especially alarming if it involves members who have up until that point been covered in schemes switching from one insurer to another. There’s no problem if they return to work soon afterwards but if their absence is due to a serious condition that turns out to be terminal, the gap in their cover only becomes apparent when a claim is submitted. The employer is not always aware of which employees are affected and, even if they are, their choices for preventing gaps in cover are very limited. often, their only option is to stick with their existing insurer, even if the terms are otherwise are ones they were trying to move away from.
“As a result, what we will do instead is ask employers to tell us who has had a history of taking off significant chunks of time – at least four or more whole weeks, whether in one go or in weeks at a time – in the year prior to the cover starting. This is data they should have on file as absences in excess of whole weeks need to be supported by GP notes.”
Lark Life and Pensions technical consultant Richard Birch says: “I am delighted that Ellipse has responded so positively to our feedback and recognised the potential difficulties surrounding ‘actively at work’.”