Employer Medical Insurance - Opt-out rights 20 February at 6:25PM in Insurance & life assurance 4 replies 96 views

o0M4RC0o

I have previously opted into my employer's Bupa plan. I think I rather naively did not really think about the tax implications expecting to see this updated in my salary. My salary was never updated and I have now been notified that I have a tax bill I need to pay and will going forward for the year 22-23 also. As the benefit pushed me into the 40% bracket the amount is substantial.

I reached out to my employer as I wished to cancel my policy but they have told me I cannot update my policy (including leaving) until Jan 2024 as January is the only update period. I checked my employer enrolment form and it does say no changes can be made outside of Jan.

My question to the group is whether they can really deny my wish to leave the company plan, therefore, forcing my tax liability. They have stated it's both company & Bupa policy to deny changes but I have never agreed to anything directly with Bupa so can only assume it is a company-only policy. 

What are my rights here, can I push to have my name taken off the policy? 

Wonka_2

Presumably the decision to be part of this or not is not solely dictated by the tax implication - especially given the current NHS situation ?

Whilst you're right that you'll pay tax on the benefit you'll only be paying the 40% on the element above the 40% threshold, not necessarily on the whole value.

And for the annual sign up question then there may well be an agreement between your employer and Bupa that you're unaware of. With ours (albeit with a Bupa competitor) we can make additions (new family members etc) during the year but not reductions/cancellations.

 

lisyloo

I would say you opted in so you agreed to the terms and conditions.
I've worked for big companies before and they have restrictions on when you can make change to various things - holidays, pensions, insurance etc. because with a five figure number of employees it's impossible to cater for everyone making changes whenever they like.

How come the amount is substantial?

Usually these are massively subsidised and a very good benefit. If it's a big company they can be "gold plated" and exclude pre-existing medical conditions. 
You won't pay the full price for the subsidised benefit - only the tax.
The tax will be maximum 40% of the subsidised price. if part of it was in the lower tax band then part of it might be taxed at 20%.

Are you sure you've understood the figures correctly? That you're only paying max 40% on the part your employer pays for you (and part of it may be at 20%).
This is normally a very very good deal and an extremely good benefit to have.

Are you also able to top up your pension before April to reduce your 40% tax?
Check the blackout dates for changes there also.

dunstonh

I reached out to my employer as I wished to cancel my policy but they have told me I cannot update my policy (including leaving) until Jan 2024 as January is the only update period. I checked my employer enrolment form and it does say no changes can be made outside of Jan.

Annual Policies often have no ability to cancel mid policy year. Whilst retail individual plans will often allow the ability to cancel, it is not always the case with group schemes.

My question to the group is whether they can really deny my wish to leave the company plan, therefore, forcing my tax liability.

Yes they can. 

They have stated it's both company & Bupa policy to deny changes but I have never agreed to anything directly with Bupa so can only assume it is a company-only policy. 

You agreed the insurer terms when you joined.

What are my rights here, can I push to have my name taken off the policy? 

You have no rights for cancellation if the policy terms do not allow for it.

DullGreyGuy

Corporate policies tend to be much cheaper than personal policies and then you only pay 40% of it so if you want private medical cover there rarely is a cheaper way to get it.

Even on personal lines policies Bupa have a no cancellation terms outside of the statutory cooling off period and so given you are paying the full year you may as well have the full years cover.