Occupational health has been used as a support for unwell employees and helps in speedier returns to work, but it has suffered from adverse tax conditions that continue to limit investment in human capital, says Richard Walsh, head of health, the Association of British Insurers
Group risk products range from those that provide only occupational health interventions, such as private medical insurance, through to those that provide occupational health interventions and financial benefits, such as liability and income protection insurance. There are also products that provide only financial benefits, such as life and critical illness insurance.
When it comes to the occupational health-end of group insurance, a wide range of services are provided to the employer and its covered employees. This starts with risk assessment and goes through to long-term rehabilitation. These types of cover also often provide assistance with health promotion and prevention, absence management and chronic disease.
Group risk occupational health products benefit a range of stakeholders, including the employer, the employee and their family, the state and even the insurers that provide access to such cover.
For employers, effective occupational health helps to prevent costly absence and ill health, and can also reduce retraining and recruitment costs. Providing occupational health can also establish a strong reputation in the labour market and help build loyalty.
Employees benefit from occupational health because it can prevent accidents and avoid unhealthy job design. In the event of an illness or accident, it can also help achieve an early return to work, protecting both physical and economic wellbeing.
Although perhaps not the biggest concern for employers, effective occupational health also reduces pressure on the National Health Service, helping to target resources to those who need them most. And, by making organisations more efficient in the labour market, it can make a big contribution to the UK’s productivity agenda.
When it comes to insurers, effective occupational health allows a quicker return to work, which can reduce costs by reducing the duration and severity of claims and, ultimately, reducing premiums for employers with effective schemes.
Since these benefits are generally agreed, it is hard to see why occupational health has been so slow to develop. Research launched by the Association of British Insurers (ABI) in October 2006, designed to investigate the attitudes of employers, found that organisations are increasingly aware of the benefits of occupational health. It also found that employers see it as a key tool in increasing productivity and managing sickness absence. In addition, the research found that occupational health benefits are no longer seen as a perk that should be available just to senior managers, but as a key means of fulfiling duty of care responsibilities to all employees.
Unfortunately, this is not universal, especially among smaller organisations. Some regard it as too costly, while others feel that the need for group risk occupational health products is a relatively low priority. Even those that feel positively about the benefit say that the current tax situation, which treats occupational health as a benefit rather than an investment in human capital, deters action.
Insurers want to see a step change in occupational health provision and the ABI believes that the evidence is gathering to justify removing some of the fiscal obstacles to employers of providing group risk occupational health cover.
In other parts of the economy the state recognises investment that has wider social benefits through some form of tax relief. But, in relation to occupational health, despite the productivity, public expenditure and broader public welfare gains, organisations that provide it are actively penalised. This makes no sense in policy and economic terms.
Another problem has been a lack of accredited training in vocational rehabilitation for professionals involved in helping employees return to work. The UnumProvident initiative with leading UK universities, launched last October, is a welcome step forward.
The ABI believes that the case for change is compelling and looks forward to working through how best to achieve it in order to help more employers provide valuable occupational health group risk benefits.
• Richard Walsh, head of health, the Association of British Insurers