Posted by Ms Laurie Davis (The Hyde Group)
04:35PM 29 Jul 2018
We are currently looking to review our Group Income Protection benefit, Has anyone previously removed this benefit or considered removing the benefit and would be willing to share their experience and any alternatives to GIP? Many thanks
If you're open to considering changes to the benefit in preference to removing it completely, you may want to explore a limited term policy. e.g. just offering cover up to 3 years or 5 years. Perhaps you could share the cost with the employees as well?
Mrs Amy Goodwin (Mundipharma International Ltd)
08:38AM 30 Jul 2018
I have experience in a re-design on our IPS in 2016 and 2018 as well as further changes and discussions on whether to continue with the policy at all.
We have a high claims history, which is great for our employees who are in a very difficult personal situation with their health, but over the years this, along with our 'platinum' policy terms has meant that we've seen very high renewal rates - one year as high as 40% increase. We had 66% salary coverage, own occupation, until state pension age with a deferral period of 6 months and the combination of this with the claims history caused the problem. There are significant HR issues to overcome as well where claimants retain the right to their original position but they have been off work for 2 years+.
In 2016 we moved to direct payment (the claimant is no longer employed but paid directly by the insurer), with an extended deferred period of 18 months so that we could do everything we possibly could to help individuals get back to work. In the first 18 months* (more of a 'self insurance' investment by the companies) but having done that we're still seeing quite a high rate of claims and not many of them are being accepted which leaves us in a very difficult position. I suspect that some of this is down to an ageing workforce and a masking of long term health issues that are now manifesting themselves.
A year ago we re-designed the scheme again, and reduced the benefit period down to 5 years for all employees but introduced the ability for people to choose to increase their benefit amounts and/or benefit term to state pension age by using their Flexible Benefits allowance. This has kept the 'core' costs of the insurance flat for us for the next two years.
We're not seeing very high take up of the flex up options, so it is likely that whilst employees seem to value IPS benefit when they have experience of a colleague or family member needing to access it, they don't see it as value to them personally when making their annual flex choices. Putting your money where your mouth is so to speak.
The difficulty is that the GIPS market is so small. I also find quite a variance in the behaviours and services of the main GIPS insurers which can be very frustrating. We've tried everyone! They are hard policies to work with and from my perspective I would like to think that we wouldn't continue with this insurance after the end of our two year rate hold, but communicate with our employees that we would remove it completely. I'm facing some concerns from colleagues in HR though (we have 5 federated HR teams) who are worried about benefits comparability with competitors though, but I don't see this insurance as continuing to offer value.
*the statistics for a successful return to work after 18 months drop off dramatically compared with 6 months. We were struggling to get clear diagnoses at 6 months so had people going on claim but sometimes coming back withing 3 months. It was very disruptive to the teams and a huge amount of work in HR.
I cant assist I'm afraid but would also be interested to hear of experiences with GIP or alternatives as it something we are going to consider next year.
If you're open to considering changes to the benefit in preference to removing it completely, you may want to explore a limited term policy. e.g. just offering cover up to 3 years or 5 years. Perhaps you could share the cost with the employees as well?
I have experience in a re-design on our IPS in 2016 and 2018 as well as further changes and discussions on whether to continue with the policy at all.
We have a high claims history, which is great for our employees who are in a very difficult personal situation with their health, but over the years this, along with our 'platinum' policy terms has meant that we've seen very high renewal rates - one year as high as 40% increase. We had 66% salary coverage, own occupation, until state pension age with a deferral period of 6 months and the combination of this with the claims history caused the problem. There are significant HR issues to overcome as well where claimants retain the right to their original position but they have been off work for 2 years+.
In 2016 we moved to direct payment (the claimant is no longer employed but paid directly by the insurer), with an extended deferred period of 18 months so that we could do everything we possibly could to help individuals get back to work. In the first 18 months* (more of a 'self insurance' investment by the companies) but having done that we're still seeing quite a high rate of claims and not many of them are being accepted which leaves us in a very difficult position. I suspect that some of this is down to an ageing workforce and a masking of long term health issues that are now manifesting themselves.
A year ago we re-designed the scheme again, and reduced the benefit period down to 5 years for all employees but introduced the ability for people to choose to increase their benefit amounts and/or benefit term to state pension age by using their Flexible Benefits allowance. This has kept the 'core' costs of the insurance flat for us for the next two years.
We're not seeing very high take up of the flex up options, so it is likely that whilst employees seem to value IPS benefit when they have experience of a colleague or family member needing to access it, they don't see it as value to them personally when making their annual flex choices. Putting your money where your mouth is so to speak.
The difficulty is that the GIPS market is so small. I also find quite a variance in the behaviours and services of the main GIPS insurers which can be very frustrating. We've tried everyone! They are hard policies to work with and from my perspective I would like to think that we wouldn't continue with this insurance after the end of our two year rate hold, but communicate with our employees that we would remove it completely. I'm facing some concerns from colleagues in HR though (we have 5 federated HR teams) who are worried about benefits comparability with competitors though, but I don't see this insurance as continuing to offer value.
*the statistics for a successful return to work after 18 months drop off dramatically compared with 6 months. We were struggling to get clear diagnoses at 6 months so had people going on claim but sometimes coming back withing 3 months. It was very disruptive to the teams and a huge amount of work in HR.
I cant assist I'm afraid but would also be interested to hear of experiences with GIP or alternatives as it something we are going to consider next year.