HR Directors and Company owners are hugely aware that employee benefits can be viewed very positively by their work force, and Health in particular is an increasingly concerning issue with many employees very aware of the increasing demands on NHS waiting lists and quality of care.
Employers are acutely aware that attracting new talent to their business can in some Regions of the UK and business sectors be very challenging. The same can be said regarding employee retention. Loyalty from employees is no longer satisfied by just a pay packet, many employees are more inclined to choose and stay with an employer who cares for their work life balance.
For some employers, a robust Company Health Insurance scheme can be the pivotal difference in being able to manage staff absence or, face dire consequences to the performance of the business should members of staff or key people be taken out of the business for a lengthy period due to sickness or injury.
Key to reducing unplanned absence, is the ability of insured employees being able to choose a consultant, and when and where to have treatment. Medical Insurance also ensures the privacy of an en-suite room with TV and other home comforts, as opposed to shared or ward type arrangements.
Employees are aware that due to the bulk buying ability of their employer, the premiums for Company Private Medical Insurance are far lower than they could negotiate for themselves on a personal basis. When the offer is extended to the spouse/family of the employee, the company quite rightly will be seen as a caring employer who value their employees.
Applescott Insurance spoke to a specialist graduate recruitment company -The AssessmentPartnership in order to understand the implications of Medical Insurance benefits being offered by employers to graduates as part of the overall employment package:
Comments from Mandy Soule, Director: The Assessment Partnership(www.tapuk.biz)
The many advantages gained by offering private medical insurance to employees
The job market is still as active as ever, with the graduate recruitment market being no exception. Despite candidate numbers still outweighing job numbers,
company benefits can play a major role in the decision-making process. Candidates’ who are in the fortunate position of receiving multiple job offers
take time to consider the whole package being offered by employers including salary, health care, pension provisions and gym memberships.
Employers need to be aware that the recruitment process is ‘two-way’ and just providing a good salary isn’t sometimes enough to attract top quality employees for the future, and more accessible and usable benefits becoming more attractive.
Millennials and those born in the late 1990’s are generally taking more notice of their health and wellbeing with opportunities for keeping fit high on the agenda for many individuals, and so staying fit is important, therefore the ability to access quick and affordable treatment is high on the agenda for many.
What are the tax implications when setting up a company paid medical insurance scheme
When a company pays for a Private Medical Insurance(PMI) scheme for its employees, the premiums are usually eligible for corporation tax relief.
In most circumstances the Company Private Medical Insurance (PMI) scheme benefit is considered to be a benefit in kind for each employee who is receiving the benefit, and this will be included in their personal P11D tax schedule. The standard practice is that this taxation should be managed by the employers payroll department.
The Company Private Medical Insurance scheme(PMI) premium is paid by the employer direct to the chosen Insurer, and the employer will pay National Insurance contributions on the premiums as if they were part of an employee’s remuneration.
These premiums are a taxable benefit for employees and are therefore added to earnings and taxed as income.
In general terms, the benefits are calculated at the highest marginal tax rate, which is determined by the employees total earnings, including any other benefits provided by the employer.
Most payroll departments change a P11D benefit by changing the tax code of the employee in the following tax year, to take into consideration the tax that is required to be paid on the benefit that was received by the employee.