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Update: Impacts and actions for group income protection

Update: Impacts and actions for group income protection

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What to do from our latest thoughts and observations?

  • Your Group Income Protection (GIP) policy will provide a proportion of an employee’s salary, in the event that they are unable to work due to illness or injury. The entitlement, eligibility and process of a claim will be laid out in your policy documentation – so make sure you understand them. It is likely your consultant is best placed to provide a summary of the cover in place.
  • We would encourage maintaining regular contact with line managers and those responsible for absence monitoring within your organisation, and perhaps reminding employees of any applicable sickness policies.

 
Organisations are going to be impacted by sickness in the workforce and the potential for increases income protection claims.

During a time of increased remote working, and social distancing, it can be challenging to monitor absence levels. Working from home has many benefits but can lead to increased “presenteeism” – being employees continuing to work in some capacity whilst unwell. So, sickness, absence and the potential for claims are harder and harder to monitor and manage.

We thought it might be useful to provide a guide on how to handle absence and income protection claims in this time of heightened urgency and uncertainty in workforce wellbeing.


Can I claim for employees unable to work due to COVID-19?

The GIP policy would apply where employees are unable to carry out their role due to symptoms of an illness, including COVID-19.

If an employee is unable to attend their place of work, or carry out their role, purely due to isolation and quarantine measures, then this would not be covered under a GIP policy.

Some insurers may have specific clauses which affect claims due to COVID-19 which will be covered in the policy documentation.


How long does an employee need to be absent before a claim becomes payable?

This is the “deferred period”. It is most usually: 13 weeks, 26 weeks, 28 weeks, 52 weeks.


When do I notify the insurer of an absence?

Do not delay – always best to provide notification sooner rather than later.

As a general rule notify of any absence exceeding 20 days in order to benefit from the rehabilitation and early intervention services available through your insurer.

A full claim should be submitted halfway through your deferred period. Any claims received after the deferred period ends may not be considered by the insurer.


What happens if we reached the end of the deferred period, but a decision has not been made by the insurer?

It is common for the length of the deferred period to dove-tail with the end of company sick pay ensuring a seamless transition with no total stoppage of income.

If sick pay ceases, and decision has not been made to admit the GIP claim, it is possible the employee will face a period of no income whilst the insurer completes their assessment. This means it is critical to provide as early as possible notification of absences and necessary forms and information for the insurer to make a decision.


Can we continue to pay an employee whose sick pay has been exhausted, but where a GIP claim decision has not been made?

In order to qualify for a claim, an employee must experience financial loss due to their incapacity.

If you maintain full pay, and a GIP claim is later accepted, the benefits would not usually be backdated and the insurer will not begin payments until you do reduce salary.

You may choose to pay the employee the equivalent of what they would receive if their GIP claim is accepted. If you do so, you should bear in mind that there is no guarantee the claim will be accepted, nor for how long you would need to sustain this arrangement.


When a claim decision is made, will the benefit be backdated?

Provided that the employee has not been in receipt of full pay beyond the end of the deferred period, any benefits payable will be backdated to the end of the deferred period upon acceptance of the claim.


What if an employee is unwell and cannot see their doctor?
The assessment and admittance of GIP claims relies upon the availability of medical evidence.

Under current guidance, the public are still permitted to attend medical appointments for routine care and complaints. Naturally, some may have reservations around doing so, and the availability of appointments may be limited.

Many GIP policies stipulate that the employee has some responsibility to ensure they are receiving adequate care and engaging with treatment recommendations. Failure to do so, can nullify a claim.

Your employee should be encouraged to continue to engage with their doctor(s) in a safe way, for example utilising telephonic consultations, both to ensure they are receiving appropriate care and to facilitate the assessment of a GIP claim.


What can we do to speed up the assessment process?

The claim assessment is dependent on the turnaround times of medical information. Your employees can encourage more timely responses from their doctors, and this is often very effective.

An insurer is limited to chasing doctors no more than once a fortnight, due to guidance set out by the British Medical Association and the Association of British Insurers. When contact is made, doctors will often and understandably prioritise their patients above requests from insurance companies.

When an employee – their patient –chases them with some frequency, the doctors often respond more proactively.

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