AXA PPP healthcare has described the increase in insurance premium tax (IPT) as a ‘retrograde measure' that will not encourage individuals and employers to protect health and wellbeing.
Chris Horlick, distribution director for AXA PPP healthcare (pictured), said the increase in IPT was "unwelcome for individual subscribers" and that "[AXA PPP] will be working closely with their advisers to safeguard their healthcare cover."
He said: "While we fully appreciate the need to balance the country's books, imposing a higher cost is a retrograde measure that will do nothing to encourage individuals and employers to protect their health and wellbeing."
He said the reforms hit at a time when employers need their people to be healthier, more engaged and more productive than ever and when pressures on the NHS are increasing.
Private medical insurance is classed as a general insurance product and will be affected by this reform.
AXA PPP also said of the impact on SMEs: that provision of healthcare trusts as an alternative to traditional PMI (due to their not having IPT) need not be "intimidating to employers or their advisers."
Horlick said: "They are relatively straightforward to establish and we welcome the opportunity to work with all employers and their advisers in this area when seeking to make medical benefit provision more sustainable in the medium term.
"SMEs are the backbone to Britain's economic recovery and increased prosperity in the years ahead. Medical insurance is a valuable tool to many SMEs seeking to recruit and retain the very best talent in their sector and then keep them fit, healthy, engaged and in the workplace.
"Increasing the rate of IPT potentially makes this business critical health tool less affordable to many SME employers with a consequent impact on productivity, profitability and, ultimately, an increased burden for care that the NHS may be asked to pick up."
He added: "We will work closely with all our SME clients and advisers to ensure that we continue to offer them the very best value, yet most relevant, private medical benefits for both their business and their people to ensure we can help them alleviate the impact of the increase in IPT wherever possible."
Further reading
Summer Budget 2015: IPT to rise to 9.5
Summer Budget 2015: 'Our priority is the NHS' - Osborne
Adviser Clinic: AXA PPP: What is the role of healthcare in an adviser's portfolio
