Workplace medical insurance

AndyPagin

My contract of employment (from 1994!) states that the company "will provide free medical cover".

Being young and healthy at the time I never gave this much thought, until recently.

The medical cover they provide is actually via medical insurance which costs me over £200 per month as a taxable benefit, and has a £500 excess which I have to pay.

There are no notes/clauses regarding the cover, just the statement above, plain clear and simple.

Does the scenario I describe constitute a breach of contract, if so can I claim back the tens of thousands the 'free' medical cover has in fact cost me?

QrizB

No.

The medical cover is free, as described.

However it's a taxable benefit, and you pay the tax on it.

(It's a bit like your salary; they pay that to you, but you're liable for the tax.)

Your employer might let you opt out of the benefit if you don't want it? Then you wouldn't need to pay tax on it.

Brie

Is it possible that there has been a change to the cover in the last 30 years?  It's possible that in 1994 it was a free benefit and not taxable and with no excess but that's changed since then.  

I know the last company I was employed by had medical cover that "didn't cost me anything" in that it was a free benefit but was always taxable.  I started with them in 2008 so that narrows looking for the start of a taxable benefit to between 1994 & 2008 at least.  Moving on from that then the fact that you have accepted to continue with the cover for the last 17 years means that you also accept the T&Cs that go with it.

I also suggest you check on the £500 excess.  For me it was less but that was per year, not per claim.  So if I had physio that was covered and then went on to need an operation in the same year there was only 1 excess that I needed to pay.  There was also a percentage of a claim that was excess so if it was 15% and I had a £100 claim the excess was £15.  And that continued until the £500 was finally exceeded on further treatments in that same year.  

Sounds like you haven't needed to make any claims so far so frankly I'd consider yourself quite lucky.

Hoenir

The company has paid the full cost of the medical cover. So it's free.

If they covered the cost of the tax due on the benefit. This would be taxable too. There's no escaping the tax legislation on employee benefits. Which is payable in the hands of the recipient.  As it's just another means of remunerating an employee. Other than in cash. 

Hoenir

Brie said:

It's possible that in 1994 it was a free benefit and not taxable and with no excess but that's changed since then.  

Nope. Been the case for many decades. P11d forms date back to the 60's.

Nomunnofun1

AndyPagin said:

My contract of employment (from 1994!) states that the company "will provide free medical cover".

Being young and healthy at the time I never gave this much thought, until recently.

The medical cover they provide is actually via medical insurance which costs me over £200 per month as a taxable benefit, and has a £500 excess which I have to pay.

There are no notes/clauses regarding the cover, just the statement above, plain clear and simple.

Does the scenario I describe constitute a breach of contract, if so can I claim back the tens of thousands the 'free' medical cover has in fact cost me?

Is the extra tax that you are paying £200 per month or is that the value of the benefit? 

£200 per month as a higher rate taxpayer means the benefit is £6000 per annum - £12000 if a basic rate taxpayer. 

silvercar

This is a contractual issue rather than a tax issue. Particularly for the excess, if they contracted to provide it for free, it’s debatable whether they should be covering the excess. It certainly won’t have been a £500 excess at the start, so that has increased along the way. They should have notified you of the increase.