MPs discussed the effectiveness of group income protection during a debate in parliament this week focussing on 'Long-term Health Problems and Work Outcomes'
In a Parliamentary debate held on 18 April 2017, Penny Mordaunt, Minister of State for Department for Work and Pensions, discussed the Green Paper Improving Lives, and how employers can actively promote health and wellbeing and manage sickness absence including a reform of statutory sick pay to enable a phased return to work.
Discussing group income protection, she said: "We also know that group income protection insurance, which offers preventive programmes, wellbeing services and income protection elements, can offer benefits and has the potential to help employers retain disabled employees and those with health conditions."
She highlighted analysis by the Centre for Economics and Business Research which indicated long-term absences among employees who have access to and use early intervention and rehabilitation services tend to be nearly 17% shorter than those among employees who do not.
Mordaunt said the government was "actively considering" whether group income protection could be part of the answer in promoting the health and wellbeing of their workforce.
She added: "We welcomed the responses to the consultation, in which we asked questions about the role the insurance sector should play in supporting the recruitment and retention of disabled people and people with health conditions."
Mordaunt also discussed how the consultation had asked for feedback on the barriers and opportunities for employers of different sizes when adopting those insurance products for their staff.
She added: "In particular, we asked why larger employers are not making better use of such protection schemes, and how take-up among SMEs in particular can be encouraged.
"We are now reviewing the full range of opinions expressed in the consultation, and we look forward to continuing to work with the industry to consider how those barriers can be overcome.
"We will consider what role the Government might play in reducing those barriers to take-up, and what the industry might need to do.
"We welcome offers to continue to work with the Government on these issues to encourage wider employer action to help employees stay in or return to work."
Mordaunt's remarks came in answer to a question posed by Craig Tracey MP, head of the all-party parliamentary group on insurance and financial services, asking to what extent the government would focus on group income protection and incentives to encourage take-up among employers and employees.
He cited evidence that shows that "group income protection is highly effective" but discussed its low coverage among female workers and those working for SMEs.
He added that he had received feedback from across the insurance sector discussing tax incentives and other means to stimulate the insurance market.
He said: "In my role as chair of the all-party parliamentary group on insurance and financial services, I have received representations from across the sector that make the case for tax incentives for employers to invest in group income protection for their staff.
"Insurers, their trade bodies and employers, through EEF, make the case that a tax incentive for employers would be the most effective way to increase coverage.
"They argue it would raise awareness of the benefits of providing the insurance, would act as a signal from the Government that group income protection is something good that employers should consider investing in, and would stimulate demand for and supply of this insurance."
'Employers need more support'
John Letizia, Public Affairs and CSR at Unum said: "To enable more people with health problems to stay in work, the government knows employers need more support and it has pinpointed a swift expansion of group income protection as one potentially transformative way of achieving that.
"It is not a panacea but if we can get a real surge in the number of employers, especially SMEs, who invest in group income protection then that would be a huge stride towards the vision of inclusive, supportive workplaces set out so well in the Green Paper.
"The Green Paper has clearly captured people's imagination in insurance and beyond. Thousands responded to the consultation and Ministers have been determined to keep up that momentum by publishing a White Paper with their concrete plans in the autumn.
"We'll see what the election brings but the next government will face the same big questions about how employers can enable people with health problems to reach their potential at work. Incentivising them to invest in group income protection is the best option on the table.
"At Unum, we will keep making the case for how a tax incentive for employers would benefit working families, employers and taxpayers and I would encourage insurers, brokers and others to do the same.
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