More UK employers will see health care cash plans as an attractive staff benefit due to the introduction of compulsory pension contributions, says Sovereign Health Care.
The cash plan provider believes that the expense of automatically enrolling British staff into pension plans will mean businesses start seeking lower cost benefits for staff.
Russ Piper, chief executive at Sovereign Health Care, said:
“Benefit packages are often crucial for employers to attract and retain the best staff available. This is particularly important now, as the improving economic climate means competition among businesses for good quality labour is already heating-up and looks certain to intensify in the next few years.
“We saw further evidence of this in the recent figures covering the final quarter of 2014, which showed UK employment was close to 31 million, the largest figure since records began in 1971, with over 73 percent of people in work, the joint highest ever rate.”
Employer-paid cash plans have risen by almost 150 percent since 2007, according to a report from market researchers Mintel in October 2014. The report also revealed that Sovereign Health Care’s view might be accurate, with more employers pushed by the costs of auto-enrolment to offer cash plans as an alternative to private medical insurance.
Auto-enrolment is being implemented in waves, beginning with the largest businesses in 2012. By 1st February 2018, all UK employers will have placed their current workers into contributory pension schemes.
Employers that are impacted must contribute at least one per cent of an eligible employee’s qualifying earnings until September 2017. The minimum employer contribution then rises to two per cent from October 2017 and three per cent a year later.
