Many employers offer private medical insurance (PMI) in their employee benefits package, which is popular with staff. Traditionally, this has often been regarded as a benefit solely for the convenience of the employee and, as such, attracts tax.
However, with the increasing importance of attendance management on operational performance and the role of work in keeping employees healthy, it seems an appropriate time to reconsider this.
That the new £500 tax exemption for employer-funded occupational health treatments, announced in the Chancellor’s 2013 Autumn Statement, will be expanded to cover treatments recommended by employer-funded occupational health services is very welcome and very timely.
There is no doubt this is a sensible approach. But it does raise the question: why are treatments recommended by occupational health alone tax-exempt? Why not other treatments?
There has been improvement in NHS waiting times over the past few years, but privately delivered investigations into medical conditions are often quicker than NHS waiting lists.
As well as being a benefit to the individual, privately delivered treatments are also a benefit to the employer, allowing an employee to be investigated, treated and back to work more quickly than if they had had to wait.
There is a further added advantage to private treatments: as well as being swift, they can be arranged in advance and so are easier to plan.
This being the case, surely the advantages of speedy return to work with minimal disruption, causing less pressure on profitability, would make it advantageous to stop considering PMI as a benefit and more as a recognisable tool of running and managing a business, hence attracting tax relief?
Dr Lucy Wright is chief medical officer of OH Assist and a member of the Commerical Occupational Health Providers Association (COHPA)
