Setting up Permanent Health Insurance for Charity employees

BrainWars

Hi, I'm asking on behalf of my friend. 

My friend has started a small charity and is looking to arrange permanent health insurance/income protection insurance for the few employees (probably one or two only) that they may have in the future. Does anyone have any experience with this as an employer and can suggest which insurance companies to go with?

Savvy_Sue

It might be the kind of question an insurance broker could help with - there's going to be quite a variety on the cover you can get. There are various companies who offer 'wellbeing' or Employee Assistance programmes which might be another option to consider. 

silvercar

Best to use a private health insurance broker.

With only a few employees I expect it will work out expensive, which means in turn the benefit in kind tax costs to the employees will be higher than some may be prepared  to spend. The consequence of which is that the number of employees who decide to take up the scheme reduces to those who perceive they will gain the most benefit. These being high claimers, it forces the premiums up, which increases the benefit in kind. This is a vicious circle which ends up with the scheme being so expensive that people are better off taking out their own scheme privately and then the company ends up with a situation where the employees expect a pay increase to compensate not getting this benefit, which of course then applies to all employees and costs the company more.

I've been involved in this loop twice, and would suggest it may not be the best approach.

Savvy_Sue

I'll add to the above that I've spent much of my working life working for or involved with charities,and it's not something I recall being on offer. 

BrainWars

Thanks for the responses. My understanding is that it's a faith-based charity, so they want to provide more than just the basic statutory benefits to ensure that employees aren't left struggling financially if they need to take long term sick leave.

Statutory benefits provide only minimal support which isn't ideal, but offering enhanced sick leave and pay or income protection can place a heavy financial burden on a small charity too..

What do people suggest as a more sustainable or balanced approach then?

Savvy_Sue

Well, our sickness policy was up to 3 months full pay followed by 3 months half pay, I think gradually increasing to that once you'd been there 3 years. These days, that seems generous.

silvercar suggested a broker specialising in this area. You could also look at what other charities offer. Networking is very useful!