Do some tweaks to employer obligations, buried in legislative small print and due in April, pave the way to improved communication and utilisation of the benefits embedded in Group Protection products?
In December 2018, government published its proposals to take forward some of the recommendations in the Taylor Review of Modern Working Practices (the Good Work Plan). The proposals came from Matthew Taylor’s July 2017 report which looked into the issues in our labour market. These included the implications of new forms of work, the rise of digital platforms and the impacts of new working models.
The review made 53 recommendations. Government published a full response in February 2018 accepting the majority of the recommendations and started work to implement them the following December. Legislation was introduced in 2019 which contained provisions for implementing some of the proposals, including:
- Agency Workers (Amendment) Regulations 2019
- Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018
- Employment Rights (Miscellaneous Amendments) Regulations 2019
One area which is being extended is employees’ right to a written statement. From 6th April 2020, the statement must be provided on day one of employment instead of within two months of starting work. A current exemption for employment lasting less than one month will be abolished. The statement will need to cover many areas, but there are opportunities for group risk advisers. Amongst the terms and conditions of employment, details of eligibility for sick leave and pay, and remuneration and benefits are also needed. So what are these opportunities?
Firstly, we could encourage employers to communicate to all employees, perhaps suggest this as an annual process to remind people of their employment package? The work to produce the statements has to be done, after all!
Additionally, why not suggest it is an opportunity to extend the compliance brief and show benefit differentiation versus competing employers? Perhaps this is an opportunity to communicate the real value of the employment package? For example, organisations could remind people of their insurance coverage and the existence of their insurer’s support services.
Most insurers offer employee communications, health and wellbeing calendars, benefit fair attendance, webinars and more. Can this legislation be used to help advisers persuade their customer to better engage with benefits, ideally on an agreed communications plan? One idea would be to augment Total Reward Statements (TRS), where available, with information beyond the statutory requirements.
A TRS can provide positive messages on the value of support services too, but the focus tends to be on the financial benefit and cost of the insurance premium to the employer. For example, our second medical opinion service would retail at £95 for family membership; our EmployeeCare Employee Assistance programme would cost £25 per employee per year; our personal nurse service £75. Not to mention they are not all available in a retail environment and group insurance cover is the only way many people will realistically be able to gain access to these services.
Advisers in the TRS space should challenge themselves. What would good look like to a customer? Thinking through the totality of the offering to employees, elements of the written statement could encourage improved employee understanding and appreciation of the value. A great consulting opportunity!
This kind of benefit communication tends to be in place in larger organisations, albeit more likely to be in induction packs or once a year flex election windows. For small organisations, the introduction of a written statement could be an intimidating exercise. There are services which provide legally compliant online document creation and telephonic legal support, such as BusinessCare which can produce much of the material.
These services are included within many group risk insurers’ policies and are a great, free tool for SME organisations to ensure they are compliant with the law from day one. And with this legislative need coming in April 2020, is this a chance to get employers to engage with another support service, further enhancing the value of group risk policies in their minds?
SMEs often struggle to keep up with legislative changes. Advisers might also want to draw attention to the Business Legal Healthcheck, which is often useful for SMEs to ensure they are up to date and compliant. Regular use, providing consistent value to customers, will ensure they retain their group risk benefits when many budgets are under scrutiny.
As well as increased benefits education and communication and legal compliance through the online production of the written statements, the new legislation could be a great way for those with Group Income Protection (GIP) to make sure it is communicated. We are aware many employers are unwilling to promote GIP as they think employees will try to take advantage once they know the benefit is there for them. This is an illusion. Insurers aim to pay all valid claims for as long as they are valid, but also limits the value to employers who don’t communicate, including staff attraction and retention and visibility of the support services.
It also, perhaps more importantly, limits the use of Early Intervention Services (EIS). These are effective return to work services, provided at no additional charge to the employer. 95% of service users do not become a claimant and 80% return within the deferred period (averaging four to seven weeks, depending on how early we are involved). Promoting GIP should be aligned with the introduction of EIS as a further employee benefit.
The group risk industry has often wondered why GIP is not growing in the face of significant reductions in the amount payable in State benefits and the difficulty of the process by which people access these benefits. Initiatives such as “Percy”, the ABI benefits calculator, have helped move things forward, but people continue to believe that long term absence will not happen to them and that the State will provide for them if ill.
Can advisers help their customers exceed the minimum legal requirements and use these written statements as an opportunity to raise the profile of all the great things that we do as an industry? They can help with ensuring their customers are compliant at no cost, help them maximise the value of their benefits spend and support services value and, most importantly for me, ensure that GIP and EIS get properly communicated as being really valuable benefits. We do not get many such opportunities to show off what we do so well!
Paul Avis is marketing director of Canada Life Group Insurance
 Canada Life MI