WSB's webinar panel looks at how employers can ensure they are getting full value from their group risk products and assesses the non-financial benefits on offer.
Jonathan Stapleton, editor-in-chief of Workplace Savings and Benefits
Paul Avis, marketing director at Canada Life
Jon Blackburn, clinical rehabilitation manager at Aviva
Steve Browning, group protection product manager at Aviva
Max Marchant, rehabilitation & EIS manager at Canada Life
Jonathan Stapleton: Are employers using the non-financial benefits offered by group risk policies to their full extent, in your view?
Paul Avis: Definitely not enough employers are using the support services group risk insurers provide. And you begin to question why that is. One of the theories we have is that, fundamentally, these are free to use, and with the word ‘free', come questions over quality.
What I would point out, however, is that we have leveraged our economies of scale as insurers to get you the very best quality suppliers.
We have, for example, the world's leading second medical opinion service. We have an EAP Association-approved employee assistance programme (EAP), a unique treatment sourcing service, and the UK's leading telephonic and online legal support service for employers.
We want to offer the very best quality of support, so should the worst happen to either an employee or a family member, we can provide much more than just a financial benefit. A genuine plea from this debate is please use them. They are not marketing gimmicks. They are great quality and are massively valuable to people who have had a significant change in their life circumstances.
Steve Browning: I agree. From our experience, the usage of these additional non-financial benefits is quite variable. Some employers will actually embed all of the services that are available to them, while others will, to be honest, not be aware of any of the additional services.
One of my key points is for employers to talk to their intermediaries/insurers, find out what these services are and how they can enhance what they are already doing or introduce new services.
Max Marchant: I would echo what Paul and Steve have said. As insurers, we provide a lot of these great services, but they are totally under-utilised from my perspective. To give you an example, I run our team of in-house nurses and rehabilitation specialists. They are all either registered general nurses or vocational specialists. And their sole job is to support employees back into the workplace - something that is not at all straightforward after someone has had quite a long period of time off.
But there are also financial aspects to this, and we intervene and support people back in the early stages - between zero to four weeks - and the average return to work is about five weeks. Because this support helps people return to work, nine out of 10 referrals do not result in a claim having to be made.
The outcomes of this are quite clearly seen from everyone's point of view - it helps to reduce occupational health costs and it can reduce sick pay. We want people to use these added-value services. Effectively they are a gift, free from day one and not enough people use them.
Paul Avis: To put that in context, return to work figures from Group Risk Development show that in 2015, 1,878 people returned to work and in 2016, 2,289. This is less than 0.1% of the insured population - and shows that rehabilitation is probably the most under-used service, even though we believe it is the most valuable benefit offered by the insurance companies providing group income protection.
Jon Blackburn: I agree. But we are definitely seeing change, and we are starting to promote group protection more as a support service for employees rather than just a financial safety net.
We are also starting to see a change from some employers. This year alone, 68% of referrals into our rehab team for early intervention have been for mental health issues, compared to 57% last year and 32% in 2015. So more employers are recognising we have early intervention services that are very effective at keeping employees in the workplace. And that's pre-claim - so this is prevention.
We are seeing a small change, but we are not seeing a wide enough spectrum of employers utilising the services.
Jonathan Stapleton: We have a few questions from listeners. First, do you think there are too many value-add services out there?
Paul Avis: There are myriad support services out there (about 32 from seven insurers). So as an employer, it is difficult to know what to do in the group risk market. But when you then align that with the private medical market, which has a raft of support services as well, I can fully appreciate that the buyer in this position (the employer) has a lot of work to do to figure out the best of the ones that are on offer.
However, advisers can help in this situation. It is a very complex area and one that advisers should embrace as a way to support the purchaser of the group insurance to come to a decision on.
Steve Browning: I think what we do as group insurers is to try to relate these services directly back to the financial product to which it is related. So, for example, an income protection policy will have an EAP attached to it; a life assurance scheme will have bereavement and counselling attached to it. What the employers need to do is actually look back at what their goals are, what their objectives are, what their culture is and ask what will work for them.
Jonathan Stapleton: I have another question from our audience. Do insurers have any tools and case studies to help demonstrate the return on investment and value that these services bring?
Paul Avis: Building a business case for an investment in health and wellbeing has always been a challenge. But there are advisers out there who have dashboards to quantify the size of the problems - things such as liability insurance, ill-health retirement, medical claims, work-based accidents and incidents, as well as the benefit spend that organisations have.
So advisers have some of the tools for that - and we are so committed to it at Canada Life that we have a chap who literally just goes round, building a business case to help employers make the case for expanding existing schemes or introducing schemes.
In terms of case studies, we have plenty of these, both on our website and on YouTube. We have a raft of those across our three products (group life, income protection and critical illness), so the evidence is there.
Jonathan Stapleton: How do employers engage their broader business around some of these services, ensuring that managers understand the benefits on offer and use them?
Steve Browning: One of the services we have for line managers is additional training and support to help equip those line managers to have better conversations with employees.
In addition, most of the insurers will also be able to communicate the benefits of any of the added-value services in a number of ways, using a number of mediums.
Jonathan Stapleton: Jon, could you tell me a little bit more about the training and support you provide for employers?
Jon Blackburn: Yes, we provide a number of different training modules. But it is all about getting the right fit for the right company and working with employers to understand what the key pillars of their wellbeing strategies are.
We run a range of training modules for line managers on how to manage sickness absence well - and that comes back to the issue of sickness absence triggers; identifying when to have conversations with employees; how to have difficult conversations with employees; how to have supportive conversations with employees and knowing when to bring the right services in for that individual.
We provide training on sickness absence management; mental health awareness in the workplace; resilience for line managers; mindful communication within the workplace; how to manage sickness absence or musculoskeletal sickness absence; and how to prevent musculoskeletal conditions occurring in the workplace.
One of the biggest condition types we see - certainly in the income protection world - is cancer, and obviously a growing concern within the workplace is how to support employees who are living and working with cancer.
Max Marchant: It is important that we get these messages out. It's all well and good providing all this literature, etc, but we need to be in there with human resources, with the employers, really talking to them and making sure that all the good stuff that is out there is embedded.
It is only through support from the intermediaries and the insurers - and the implementation of all these workshops and awareness sessions - that these things become embedded within an organisation.
We are also driven by the strategic information we get from an employer. The data needs to be looked at all the time as you are going through an experience with a customer.
So you are looking at spikes in the data, spikes in absence, spikes of different types of claims, etc, so you can identify where best to provide support.
For example, if you see a lot of workplace conflict going on, then we can guide mediation through ACAS and arrange training for that.
The various workshops we can provide (on areas such as mental health, building resilience and so on) are key to helping the line manager, and that's important as well.
We have actually been doing a lot of wellbeing pilots in our own organisation as well - both to help our own staff but also to understand how it can fit into other organisations.
So we have looked at healthy living, conducted walking campaigns and blood pressure read-ins among other things. From our experience with our own staff, we have learned the best way to try and implement these things.
One thing I'm very keen on is that we now have a mental health first aider, who is able to go out and train line managers to be mental health first aiders within the organisation.
We keep on talking about physical health, but mental health is a huge issue. And the more we can do to provide support on this for line managers and HR managers, the better.
Paul Avis: We have a range of tools on our app, including a change and resilience toolkit, a managing menopause toolkit, a managing stress toolkit, a mental health awareness toolkit, a mindfulness toolkit and a redundancy toolkit.
So as well as podcasts and the other things we offer, there are a raft of aids available through new technologies to begin to address some of the more strategic, rather than case management, needs of an employer.
Jonathan Stapleton: Time for another question. How can group risk insurers help employers change their own views and cultures with regard to employee sickness? Do you think that group risk providers can help change those sort of attitudes?
Paul Avis: This is a question which confronts one of the illusions about group income protection. Some employers do not communicate group income protection to employees because they believe they will try and get the benefit. But what you can be assured of is while insurers pay all valid claims for the period of their validity, we also actively manage people, whether they be pre-claim or post-claim.
The first thing an organisation needs to do is to communicate what is available as part of its absence management. Line managers need to be trained in the procedures for this - and know when to use the early intervention service, the EAP and the other benefits around private medical, cash plan or group risk benefits.
It is really about taking hold of the issue, not hiding away from it, and being confident you have managers that can enforce the policy procedure and use the services and benefits at the optimum time.
Jonathan Stapleton: Moving on to another question: how can employers effectively communicate group risk benefits to their employees?
Jon Blackburn: One of the key things for me is that you engage every layer of the organisation and utilise a number of different strategies so you do not rely on one medium, but a range of things.
It is huddles with teams; social media, such as LinkedIn pages and WhatsApp groups for teams; it is short-clip videos on your intranet, and so on. The apps, as we have touched on before, are really important, so employees can utilise these services very quickly and readily.
It is also about engaging in team discussions, all the way up through the organisation. It is promotional material done by the chief executive of the organisation. It has to be a number of different strategies and it has to be every person within the organisation.
Paul Avis: There is something to avoid: the demographic cliché. Sending out emails to everyone probably does not work because we all get too many emails.
Doing an intranet announcement may pique some people's interest because they like to know what is going on. But if you send a 25-year-old a hard copy flyer, customised to them, on a Friday and it arrives on their doormat on a Saturday, they will love you because they probably never had a piece of post before.
The second cliché is the smart thing: there is plenty of information out there. We are probably all subject to information overload, so where you put things matters. For instance, where do people go when they are upset? The toilet - so why not put EAP posters on the back of the toilet doors?
There are also more proactive stances. For example, under the EAP, you can do formal and informal managerial referrals - if you see someone is upset or someone tells you they have an issue, you can support them by getting them to call the EAP. Communication to employees has to be multi-dimensional and, most importantly, not clichéd.
Max Marchant: I agree. It is important we understand the needs of different organisations and tailor how we communicate. I am a strong believer in fully understanding the culture of an organisation and sending people into that organisation to try and understand the best way. As Paul alluded to, what might suit one part of an organisation will not always suit other parts of the same business. So it is key to make sure we deliver the right form of information at the right time. Otherwise, we are wasting our time with the message and the important things people need to understand will not be understood.
Jonathan Stapleton: To what extent can technology help engage employers, managers and individuals with these non-financial benefits?
Steve Browning: Technology can play a huge role in communicating and simplifying the administration of some of these additional services. We have already mentioned apps - webinars, video clips, etc.
But when employees are using this technology, it also allows analysis to be done - allowing that technology to also provide a benefit back to the employer. We can see what is utilised.
We can see what trends there are and ask, for instance, if there are particular concerns that are coming up from the EAP, for example, at particular times of year. The employer is then able to utilise that data and run campaigns or awareness in advance of those spikes, in advance of those trends. So it actually has a huge role.
But the use of an app is not a panacea and you have to deploy technology in a way that actually fits and works for your workforce and your employees.
Paul Avis: We are spending a lot of time now with video. We look to produce videos about all of our support services and they are quite short - normally no more than two to three minutes in length. It is really important that we make what we do accessible and easy to understand because, for an individual, you do not want a long presentation on what a support service is. You just need to know it is there and how to access it as quickly as possible.
And just reflecting on Steve's point on management information (MI), one of the things we find for the employer is that the MI generated from this data can drive an organisation's health and wellbeing strategy. From our perspective, we find that the production of MI on both our second medical opinion and EAPs, when aligned with the group income protection data, gives people a really good insight into what's going on in their organisation.
Jonathan Stapleton: How have salary sacrifice changes impacted group risk?
Steve Browning: Salary sacrifice is one of those areas where we are all waiting for clarification. Both HM Revenue & Customs (HMRC) and the government have come out and said what they want to apply and how they want to tax group income protection products.
But I think it is fair to say that all insurers and a large number of intermediaries are going back to HMRC asking for clarification because at the moment, what they have publicly said will apply is actually at odds with the legislation as it stands at this particular moment in time. This is not helpful to employers or insurers.
So back to the original question, how have salary sacrifice changes impacted group risk? Once we get that clarification, we may see further change. If it is right that these benefits remain taxed at both ends of the product, then we may not see much product innovation. If the benefits are no longer paid through PAYE and are paid tax-free, then you will see different benefits being developed by insurers in order to meet the differing needs and the change in environment.
Paul Avis: The two benefits affected by the changes were excepted group life and group income protection. And what we have found with group income protection is that we are basically being taxed on both the premiums and the benefits, which does not feel fair or aligned in any way, shape or form with the HMRC approach to taxation.
You cannot be taxed on both premiums and benefits. So I would expect a challenge coming from the industry over the dual taxation of salary sacrifice for income protection.
What the debate over salary sacrifice changes has flushed out, however, is a couple of important points. The first is that employees, when they pay for their own benefits, are in theory entitled to those benefits tax-free; whereas if the employer pays, it is subject to pay-as-you-earn and is, in effect, salary continuance.
But while insurers pay an employer the group income protection benefit on a claim, they are actually then paying the entire amount out to the employee as salary continuance, even though the employee is, in theory, entitled to tax-free benefits for the proportion they have paid.
So if you had a 50% employer paid, and a 25% employee paid, basically one-third of that benefit should be tax-free but that has not been happening.
The other thing here is by making it dual taxation, HMRC is completely at odds with the Department for Work and Pensions (DWP), which is currently consulting as part of its Improving Working Lives initiative- part of which looks at how to keep people in the workplace and help return them to the workplace. HMRC and the DWP seem at odds with each other here.
Steve Browning: One of the other things here is for employers to understand the make-up of their workforce. As Paul has correctly said, registered life assurance schemes are unaffected. But they are not necessarily suitable for all employees. So employers should just be aware that the choices made for the benefit design may have implications for employees.
And the tax implications can be far greater than an employee paying a benefit in kind charge. So don't look at the few and design a benefit structure. Look across your workforce and look at the financial implications in all areas, both the benefit-in-kind and additional taxation should people start exceeding lifetime allowances.
Jonathan Stapleton: One final question from our audience: how do you see group risk providers developing value-add services over the next five years?
Steve Browning: I think insurers will continue to look at the added-value services that they offer and make sure that they remain applicable to the products to which they are related. Wellbeing is very much a buzzword, and plenty more work will be done on wellbeing services - perhaps trying to make it easier to integrate them with the employer, so that the employer can utilise those services far more easily.
Jon Blackburn: I think it is really about looking at how we support employers and employees with end-to-end wellbeing solutions. Yes, we offer a financial safety net through group protection products. But how do you provide you, as an employer, with something that will hopefully mean those employees do not need those financial safety nets?
Jonathan Stapleton: My final question: what are your key takeaways from this discussion?
Steve Browning: Simple, really. All the way throughout the process, when you are looking at implementing or purchasing a group income protection policy, talk to people about what additional services are available. Quite often you will find the insurer's processes are not prescriptive, and they are able to work with you to make all of these added-value services fit your culture and your processes and regime.
Paul Avis: I'll go back to what I said at the beginning: please use these services. They are of great quality and they can have a massive impact on the user. You do not have to claim to use them, there are no costs to users and there are massive business benefits of using them.
Specifically, I'd like to focus on early intervention services. It is an amazingly rounded service to support employees back to the workplace. The business case for it is simple: you get five weeks average duration of absence where early intervention is used.
Some 93% of those using the service do not go on to be claims and it is both an employer and an employee benefit, reducing both occupational and statutory sick pay, helping employers comply with the Equality Act and delighting employees who have got support for their return to work.
Jon Blackburn: The key point for me is make sure your intermediary (your protection specialist) is telling you, or can explain to you, what those added-value benefits are and how they work for you as a business.
Max Marchant: The simple message from me is to use these services, to understand them and if you do not understand, ask your adviser or your insurer. At the heart of all of this, we are talking about human beings and it is important that everything we provide here helps people out. And I think in the world we are in these days, we all need a bit of support and guidance - these add-on services provide that.
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers