Buck Bond Group
Absence support and income protection claims

Absence support and income protection claims

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Income protection benefit provides financial security to employees in the event of long-term sickness absence. Beyond giving peace of mind, with enhanced financial stability in case of long-term illness, it can also provide access to other valuable wellbeing benefits, via the related insurance policies.

Many employees may not be aware of how beneficial this type of cover can be – nor the requirements which apply to them if they are absent from work due to sickness or injury for a prolonged period of time. To allow for maximum understanding, employers can review their employee communications, ensuring that they reference the following important key points:

  • Support through a group income protection insurer’s early intervention/vocational rehabilitation teams is available, with the aim (where possible) to help an absent employee return to work as soon as possible. Depending on the cause of absence, insurers may offer personalised support pathways, either in-house or through third-party partners. For example, such support pathways may be for mental health, musculoskeletal or menopause symptoms.
  • This early intervention/vocational rehabilitation support may be available from the insurer even before an employee has become absent from work. Discussions with the insurer may be beneficial once an employer is aware that an employee is struggling in the workplace. With the appropriate support in place, potential absences may be avoided or mitigated.
  • Other services, which may be available to an employee or their immediate family, may include a second medical opinion service, virtual GP, a wellbeing app, or counselling through an Employee Assistance Programme.
  • Support from an insurer’s early intervention/vocational rehabilitation team can dovetail with any occupational health support.
  • Where an income protection claim is submitted, it’s important this is done in line with an appropriate timescale – to allow the insurer time to assess the claim and gather any medical evidence.  Employees can maintain communication with their treating practitioners and let them know that a claim is being processed, to encourage efficient returns of any reports the insurer requests.
  • An employee’s engagement with any early intervention/vocational rehabilitation support is key to the best possible success in returning to work. Beyond assisting the employee on a personal level, engagement forms part of insurers’ policy terms and condition. If an employee is not engaging with a treatment plan recommended for them, this may also have an impact on the validity of an income protection claim.

Employees should also be made aware of the terms of acceptance of any income protection. Key points could include:

  • Once a claim is in payment, regular reviews will be carried out by the insurer to ensure that it remains valid. This will require submission of up-to-date medical reports.
  • If an employee were to return to work in a different role, or is working reduced hours, a claim may be paid on a proportionate basis. This would take the reduction of income being paid to the employee by the employer into account.
  • In the event that an employee returns to work and the claim ceases, but they then became absent again due to the same condition, it may be possible that the income protection is restarted without the completion of a new deferred period. This would be dependent on the time that has elapsed since the claim ceased (generally less than 12 months) and, as with the original claim assessment, would be subject to medical evidence supporting the claim being medically valid.
  • Income protection benefit payments are paid to the employee through payroll, with appropriate PAYE deductions.
  • The criteria for assessing an income protection claim is likely to be different from a DWP assessment for benefits, such as employment support allowance. Therefore, if an income protection claim were to be accepted, this would not then automatically mean that any benefit from the DWP would be accepted, and vice versa.
  • Having a medical practitioner advise that an employee is not fit for work does not automatically mean that an income protection claim would be accepted. There would need to be supporting medical evidence to show that the employee is medically unfit, to the extent they are unable to work in line with their insured definition of incapacity under the income protection policy.

Benefit promises should always be limited to the benefit provided by the insurer, to prevent a potential uninsured liability arising.  This is an important caveat to include on any employee benefit communications.

Effective communications are key to ensuring employees have a clear understanding of the income protection benefit, enabling them to make decisions and take action to protect their families and dependants. This not only provide financial security, but is part of establishing a supportive workplace culture in which holistic employee wellbeing is a priority.