Group risk protection policies that attract a P11D charge may not be excluded from the impacts of the EU gender directive, Ellipse is warning.
As a result of fears raised to it, the insurer has announced it will be adopting unisex rates to protect employers, advisers and itself from the risk of potential legal action.
Although group policies were originally felt to be exempt from the terms of the directive, this could draw benefits such as employer-funded critical illness and others such as flexible and voluntary benefits within its remit, depending on how courts interpret the directive.
Ellipse communications manager Peter Fenner told WSB there was a risk that employers, providers and advisers could face court action over failing to offer gender neutral pricing.
"Everyone thought there was an exemption and as it turns out that may not be the case - and that's what's driving our stance on this," he said.
"We'd rather put people in a position where they will be confident they will be ok rather than where they should be ok but there's a chance they might not - depending on what the courts say.
"There's a risk and that could impact the adviser, client and provider.
"In a lot of ways it seems more logical to follow the individual market too as it's going to look a bit weird if these rates don't matter in people's private life but then the options are different for men and women when it comes to flexible benefits."
The insurance industry's exemption from the legislation expires on 21 December and Ellipse aims to have its unisex model fully operational by mid-September.
Many flex schemes already work on this basis and Fenner noted it was important to be ahead of any potential legal problems.
"It just seems to make sense and it doesn't hurt to be ahead of the curve.
"Originally insurance contracts weren't covered, now they are although group business is exempt - how long will it be before someone takes it to court and judges say you can't have an exclusion for group benefits?"
The provider also clarified that it was not using the move to hide a premium rate increase or that employers would face any significant administrative burden.
"What we're collecting across our portfolio we don't expect to change and we don't expect the changes to be very great on individual schemes unless there's a great preponderance of men or women involved.
"We're not using it as a cover or blind to increase premiums - we're expecting it to be pretty neutral across the portfolio," Fenner concluded.
