Healthcare tax break for employers is key to SAR success

The employee benefits consultancy called the Sickness Absence Review's current recommendations ‘ambiguous' and said they implied that employees would be the main beneficiaries.

This followed a poll of 168 businesses representing an estimated 30,000 UK private sector employees conducted by Jelf.

It revealed that 82% believed tax reliefs proposed in the SAR to provide private medical insurance or rehabilitation services to basic rate payers should benefit both the employer and employee.

The importance of the government's impending White Paper on the SAR was illustrated by 60% of employers saying tax breaks on healthcare were the most important recommendation made, followed by a further review of the fit-note system (21%) and a job brokering service (2%).

Jelf said that although both tax breaks would be beneficial, it strongly believed that the employer tax break is the real key to universal healthcare coverage.

‘The report's somewhat ambiguous recommendations implied that employees are likely to be the main beneficiaries for these tax breaks,' it said.

‘By reducing an employers' liability, organisations are much more likely to invest and better communicate their healthcare offering to staff.

‘In short, targeting employers could engender an entire culture shift and encourage healthcare benefits to become more mainstream,' it added.

Steve Herbert, head of benefits strategy at Jelf Employee Benefits, continued: "If this SAR recommendation is to have any teeth, we would encourage the government to think about incentivising tax breaks for the employer first, and then the employee, and not the other way around.

"The intention of the SAR was to reduce sickness absence, and clearly private healthcare has an important role to play here.

"The employer tax incentive could be funded by the resulting lower usage of the NHS by those covered.

"At a time when the NHS is undergoing significant reform, and charged with finding large cost savings, this must be worthy of consideration by central government as a method of both reducing NHS costs and long term sickness absence."

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• Topics
• Employee Benefits
• Group PMI
• Jelf
• Sickness Absence Review
• Workplace sickness