It’s all change, but will your staff benefits also have to change? ADVO’s Colin Boxall comments “The recent political realignments will reach into all our lives, but how will this affect the way UK employers offer benefits to their staff? The simple answer, in the short-term, is very little or nothing at all. In the longer term, its harder to give a more definitive answer. Adjustment in thinking is likely, but the need for protection and retirement provision remain unchanged”.
Colin continues “Agree or disagree, the result of the referendum is known, with our new Prime Minister confirming the course to leave is set. It is, however, generally accepted that it is unwise to make any changes until more is known, and certainly ‘don’t panic’ is the overwhelming message.
“There are likely to be mixed outcomes and results across all spectrums. For example, homeowners may see the value of their house fall but this could inversely have a positive impact across the economy by making housing more accessible with lower mortgages freeing up consumer spending. The pound has fallen dramatically, but this is already helping to increase exports.
“Employers’ HR departments will have an increased workload in the years ahead as changes start to occur in employment law as ties to Europe are unpicked and amended. Employment in regard to immigration rules and available job applicants and staff benefits including pension and wider protection will also likely be effected.
“Much of current UK pensions legislation is based on EU law. The underlying principles of equal gender, protection of members’ benefits on insolvency, and funding requirements have been part of UK legislation and are unlikely to be abandoned. With Pensions, I can also see no reason why auto-enrolment would be amended although we should expect lower returns on investments in the short-term as the markets re-settle, and also when Article 50 is finally triggered.
“If the economy dips in the short and medium term, pressure will continue on the NHS with less investment available and while EU membership dues continue to be paid.
“Stephen Dalton, NHS Confederation chief executive, stated: “The NHS has broadly benefitted from being in the EU and leaving it will undoubtedly have implications which are yet to be clearly understood. It is impossible to predict the full impact at this stage, but clearly it is vital that our government seeks a strong, nuanced agreement with the European Union that recognises how interwoven NHS and EU policies have become.”
“As pressures increase on the NHS, employers may find an increase in interest in medical, dental and cash plans from staff as well as their own renewed interest in their wider insurance policies that help with efficiency and absence.
“As pressures increase on the NHS, employers may find an increase in interest in medical, dental and cash plans”
Pictured above: Colin Boxall
“For those employers covering staff through international policies, there appears to be little concern from insurers over possible impacts. They are well versed in dealing with local legislation and will quickly adapt.
“This is confirmed by leading international insurer, Aetna who stated “Our operating model is global, and we have an extensive footprint and business interests across the Americas, Middle East, Asia, Africa and Europe. Our ability to support customers and their employees in accessing health care within the European Union is unaffected.”
“Those employers who are subsidising their overseas staff medical provision through reciprocal state healthcare arrangements will likely have to make new arrangements, but should, however, in my opinion review this now, as relatively small adjustments may only be needed to provide full independent protection outside of any state healthcare provision.
“A broader and richer benefit package could result as pressure on wages creates a renewed focus on retention of staff if necessary employee skills become scarcer.
“There might be benefits in the longer-term, however, as some of the unfavourable red-tape is repealed. One immediate financial impact the government should consider is the reversal of the recent increases in Insurance Premium Tax where it had been said that this was introduced to bring the UK into line with many other European countries.
“Although seen as an easy revenue raiser, one of the ill-considered effects of the IPT rise is the significant increase in cost for providing medical insurance and cash plan policies for both employers and individuals. Certainly for self-employed, older and retired individuals, seeing low returns on investments and on fixed incomes, this will likely increase policy cancellation pushing more care back onto the NHS from the private sector.
“One of the dangers will, however, be putting everything on hold. As James holder from The Expat Academy confirms “the biggest risk is that organisations put things on hold whilst we all work out the potential impact. This might include putting on hold projects or simply sending people overseas. Humans, on the whole, don’t like change, but we have to embrace it and move forwards”
“There is, however, one certainty… company benefits will continue to form a backbone for remuneration. Employers should continue to promote staff benefits. Without employers taking the lead, many employees would struggle relying on state support in time of need”.