Employers 'must do more' to merit tax breaks for health benefits

Workplace health expert says Treasury will remain unconvinced unless employers themselves demonstrate ROI

The Treasury is unlikely to give the green light to tax breaks for health benefits unless employers do more to record their positive impact on employee absence, according to one of the country's leading workplace health experts.

Professor Stephen Bevan, director of the Centre for Workforce Effectiveness at The Work Foundation, said too many employers use health benefits purely as a way to attract new employees and fail to record their results adequately.

He was speaking at a debate on the Sickness Absence Review, which last year recommended that employer-funded private medical insurance for lower-paid employees should attract tax relief.

The review, which was co-authored by Dame Carol Black and David Frost of the British Chambers of Commerce, was presented to the Government in November 2011 and its proposals are currently being considered.

It said the tax break would help lower-paid employees – who it argues are at greater risk of long-term absence and of flowing onto state benefits – to return to work more quickly after a period of absence.

But Bevan said that both he and the Treasury have concerns about the effectiveness of such an incentive.

Addressing last night's debate, hosted by Cigna, he said: “I meet too many employers who do not know what impact their health benefits system has on their employees’ wellbeing.

“My concern, and the concern of the Treasury, is that providing this incentive could be a dead weight. We need to have a debate on the impact these benefits can have on employees.”

Frost added: “You have to look pretty hard for convincing evidence of the benefits of wellbeing initiatives and it can therefore be very hard to convince chief executives that they are worth the investment.”

Earlier this year, Dr Bill Gunnyeon, chief medical adviser at the Department for Work and Pensions, told an Association of British Insurers conference that much work needs to be done to analyse the implications of a potential tax break before it could be given the go-ahead.

comments powered by Disqus