Traditionally, group income protection (also known as long-term sick pay insurance) to cover an employee’s salary when they’ve been off work with a long-term condition, was seen as being solely an employee benefit. Now, the product provides just as much value to the employer as it does the employee.
Most policies now provide employee assistance programmes that include support for managers dealing with a range of business issues, some related to absence and some not. Also, most insurers provide support to employers dealing with the early stage of an absence and include funding treatments for the employee to get them back to work sooner.
This shift has come from an alignment of interests between employee, employer and insurer. Ultimately, they all want the same thing, for the employee to return to work as soon as possible. In the past, insurers have hoped this outcome would occur, but are now being much more proactive following increasing amounts of evidence showing that the earlier medical intervention is provided, the better the outcome.
At Ellipse, we are starting to take that one step further by helping employers manage their absence from day one. We do this by providing them with their own online absence management system. They can use this to record sickness absence as well as holidays, and while providing useful everyday value for employers, it also allows us to proactively intervene in certain circumstances, for example, when the employee reaches four weeks off work.
All of a sudden this employee benefit is now providing just as much value for employers too. There are now many more conditions where long spells of absence can be avoided with effective early treatments. So while the long-term financial support to the employee is still a crucial benefit of the product, it is just the backstop.
Two key implications
There are two simple implications for employers from this shift. First, those who have always considered income protection as a nice to have employee benefit should reconsider as the benefits to the business are much clearer now, providing a stronger business case for its introduction.
Second, those who already have a policy in place should ensure that they, as employers, are getting the most out of their policy. This is especially the case for SMEs, but also large employers too. Early intervention and case management services provided by the insurer should be fully integrated within the company’s absences practices to see real business benefits.
In a nutshell
The interests of employees, employers and income protection insurers are now closely aligned, as all have an interest in getting a person back to work as soon as possible. Therefore products now provide a greater range of employer benefits, especially those which help them manage everyday absence, in addition to providing core insurance to employees.
While all employee benefit products provide some indirect benefits to the business itself, none are quite as explicit as those offered by group income protection.