Since 6 April, employers are no longer able to reclaim any Statutory Sick Pay (SSP) paid to workers off work ill for up to 28 weeks. Previously, the percentage threshold scheme (PTS) compensated employers if they had higher than average sickness absence. Then, an employer could recover some of the SSP paid to their employees if the total SSP paid in a tax month was greater than a set percentage of their gross Class 1 NICs (National Insurance contributions) liability for that month.
Responding to the change, MyRecovery Cheque has introduced SSPProtect as a low cost plan for employers to insure their SSP costs.
The plan pays the employer a fixed sum based on the normal maximum recovery time following an operation or medical procedure or for occupational injuries. The plan has four classifications, paying out £100, £300, £1,000 or £2,500 (higher benefits are available on other MyRecoveryCheque products). The four are:
(a) Recovery and return to light manual work in a few days
(b) Recovery and return to light manual work in up to two or three weeks.
(c) Recovery and return to light manual work in up to one to two months.
(d) Prolonged recovery.
For example, normal maximum recovery time to get back to work following a heart attack or chemotherapy is nine weeks. That may result in an employer paying £787.95 in SSP. The plan effectively rounds that up to £1,000.
Where an operation has a maximum recovery time of a week, the employer could pay SSP of £87.55, and the plan would pay £100.
By having a fixed plan benefit, the employer gains if the return to work is quicker than might be expected (or, conversely, the employer loses if the return to work is slower), so providing a small incentive to encourage early returning to work.
Pre-existing conditions in the previous 12 months plus cancer recurrence and some other exclusions are not covered by the plan. Any employee can be covered if they are resident in the UK for a minimum of 180 days a year. Up to three claims in any 12 month period can be made.
Cost, if the plan is purchased through an intermediary (it’s actually more expensive to buy direct) is £5 a month.
What They Say
Managing director Dr Tony Williams said: "The key point is that the payment is just a flat rate tailored to the time expected off work, rather than many sick pay schemes which go on and on paying as long as the employee stays off sick, often for six months or more. This supports the employee through recovery, but encourages a return to work at an appropriate time.
"Evidence clearly shows that it is much easier for an employee to return to work in the first two or three months; after this it gets harder because of loss of confidence and loss of skills. Paying just for the right amount of time off will help the employee focus on the right time to return, maintaining confidence and skills, rather than taking the apparently easy route of staying off sick as long as possible."
What We Say
"This plan is not an alternative to full group income protection, critical illness or private medical insurance cover, but then most employees are not covered by such plans anyway. Instead, the plan provides SSP cover only and costs just a fiver a month. That makes it attractive both to cover every suitable employee and/or as a supplement to other protection insurances.
"The plan does not cover SSP costs in all cases [the most notable exceptions being mental health and musculoskeletal conditions] but it does provide a good level of cover at a low cost and also creates a new talking point for intermediaries to discuss with group clients."