Group risk roundtable: Catering for an ageing workforce

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• Half of over-50s have a chronic health condition and, although this might not affect their ability to work, employers will need to consider making adjustments to accommodate them in the workplace.

• On average, older people take less short-term sickness absence than their younger colleagues, but may suffer more long-term absence.

• Group risk benefits’ exemption from the removal of the default retirement age (DRA) enables employers to stop providing insured group risk benefits at state pension age.

• Product features, such as early intervention, proportionate benefit and return-to-work programmes, can help to keep employees, whatever their age, in the workplace.

Abolition of the default retirement age may help employers to retain key talent, but an ageing workforce brings different health matters to consider, says Sam Barrett

The removal of the default retirement age (DRA) will change the face of the workplace as employees get set to work throughout, and maybe beyond, their sixties.

As much as the move has been welcomed, it sets employers a number of challenges. Group Risk Development’s (Grid) 2011 employer research has identified a number of benefits of allowing older employees to continue working beyond the state retirement age. The research, published in March 2012, found that 23% of employers thought that removing the DRA would enable them to retain the best talent in their business, and 12% felt it would increase diversity in the workplace.

Almost 20% of respondents claimed to have encouraged employees to work beyond retirement age before the DRA was abolished.

The trade-off for an older workforce is the need for employers to take a fresh look at health and wellbeing in the workplace because of the specific requirements of older employees. For example, older staff are entitled to request changes to working conditions, such as a move away from shift work, which can be difficult for employees aged over 55, says Sayeed Khan, chief medical adviser at EEF.

Employers will also have to be mindful of the potential for specific health issues among older staff, such as high blood pressure. Beta blockers may be taken to control the condition, but can cause cold fingers, which could have ramifications for staff who work outside or have a manual job in a factory.

Chronic disease

Khan says employers can expect half of their employees aged over 50 to have some form of chronic disease. “It might not impact on their ability to work, but there will be consequences that could affect them at work,” he warns.

Cancer is a common disease in an older workforce but, although serious, it is a condition Khan believes is now more manageable for employers. “Treatment for cancer has got better,” he says. “Nowadays, people are staying in work and are well enough to lead a normal life, whereas 20 years ago it was probably terminal. Because of this, a lot of employees will be keen to carry on working after a cancer diagnosis, but there is a bit of a cultural problem as people still expect you to go and lie down somewhere. Employers can be too paternalistic.”

Katharine Moxham, spokesperson for Grid, says people suffering heart attacks used to encounter the same response, but she adds: “Treatment has progressed so far that you can now get back to work relatively quickly and, with lifestyle changes, be better off than before, healthwise.”

There is also a distinct trend in absenteeism within older workforces, says Khan. “Older employees tend to have less short-term absence,” he explains. “A lot of short-term absence isn’t to do with illness, it’s to do with social circumstances, and this doesn’t tend to affect older employees as much as their younger colleagues. Instead, when older employees go off, they tend to go off big time with conditions such as heart disease, lung disease, arthritis and cancer.”

But although employers may have concerns about the implications of an older workforce, the problems that could have been created for group risk benefits by the removal of the DRA have been averted. When this was first proposed, there were concerns that making group risk products available to staff of all ages could result in increased premiums and employers cancelling cover.

After successfully lobbying the government, the group risk industry obtained an exemption that enables providers to offer policies that stop at the state retirement age, so affordable cover is available.

Prohibitive cost†

Chris Ford, director of group risk at Jelf Employee Benefits, says: “You can’t have a scenario where someone could be covered indefinitely. The cost could become prohibitive.”

Moxham adds: “This allows employers to take the same pragmatic approach as the state does with working age benefits. Jobseeker’s Allowance and Employment and Support Allowance, for example, will not be available beyond state pension age.

“No one wants to detract from the value of an older workforce, but at some point there needs to be recognition that a person is no longer looking to be at work. Employers don’t have to stop benefits at state pension age but we felt it was important to give them the choice.”

Ford also thinks premiums will not necessarily increase significantly. “With death in service, rates will increase if employers have an older workforce, but if they keeping a good spread of employees, the fact that they have some older employees won’t hit rates too detrimentally,” he says.

Although group risk products such as income protection and critical illness cover provide financial support for ill-health, they also focus on helping employees to stay in the workplace.

Income protection products increasingly include employee assistance programmes (EAPs), which can enable early intervention in staff absences, helping to improve employees’ chances of returning to work. These schemes can also pay an employee a proportionate benefit alongside a return-to-work programme, to support them back into the workplace.

Steve Bridger, head of group risk at Aviva UK Health, says: “Our focus is on capacity, not illness. Having a diagnosis doesn’t mean you can’t work. Work is good for people and, if you are able to work, why shouldn’t you, whatever age you are?”

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