Age laws could spell the end of workplace health insurance


In their haste to stamp out anything that might hint at age discrimination in Britain's workplaces, politicians could well have sounded the death-knell for employer-funded private health insurance.

On the back of the EU-mandated Employment Equality (Age) Regulations which came into force on 1st October, campaign group the Employer's Forum on Age (EFA) has warned that the new regulations will threaten the provision of a wide range of insured employee benefits currently provided by employers and much valued by employees.

"As a direct result of the Age Regulations, employers are being forced to rethink their approach to benefits," said EFA Director, Sam Mercer.

"Unlike occupational pension schemes, these do not come under the broad range of exemptions built into the Regulations."

In particular, with the regulations stating that all staff should be offered the same benefits even if they work beyond age 65, Mercer said that firms would simply curtail or remove benefit programmes they provide to employees on a group basis.

"The Age Regulations, as they currently stand, fail to recognise the increased costs employers face in providing insured benefits, the availability of specific benefits to employees over 70 and the risk employers face in seeking to objectively justify the provision of different benefits to employees at different ages (which is current employer practice)," she said.

Another unintended consequence could be that employment opportunities for those aged over 65 are actually diminished as employers find out that the costs of continuing benefit coverage are disproportionately high - directly contradicting one of the main aims of the legislation.

"This is principally because employers are not at all convinced that they will be able to objectively justify the age discrimination necessary to continue to offer these benefits, especially where cost is the main reason," Mercer said.

"This has serious ramifications: if employers fail to provide many of these benefits, then the burden of providing for employees when they are unable to work and fall sick will fall on to the State."

The Department of Trade and Industry (DTI) told BBC News that firms that may be able to offer their older workers fewer benefits if they could show "objective justification".

"Objective justification is available to employers where the continued provision of insurance-based benefits to employees after a particular age results in significant extra costs.

"Although we do not believe that cost alone can be an objective justification, economic factors such as business needs and efficiency may be," the DTI said.

The question is, however, how many firms will be prepared to run the risk of costly litigation in order to prove them right?

Sam Mercer, meanwhile, called on the government to amend the regulations as soon as possible.

"We believe it is critical that the Government urgently consider amending the Age Regulations to add further exceptions in relation to insurance provision, specifically around the fixing of an upper age limit for coverage. This could be directly linked to the default retirement age of 65, and could, if necessary, increase over time," she said.