4th July 2006.
Leading disability insurer, UnumProvident, has recognised the changing patterns of employment with a new solution for the group income protection market, which offers employers flexibility and choice in the management of employee sickness absence. Pay Direct is an innovative new-to-market income protection solution which allows the continuation of income benefit to a claimant without the traditional requirement that the employee must remain on a company's payroll.
Wojciech Dochan, Head of Commercial Marketing at UnumProvident, said: "Once a claim has been accepted, UnumProvident's Vocational Rehabilitation Consultants work with the employee and the employer to help facilitate a return to work where appropriate and timely. However, should a return to work with the same company not be possible, Pay Direct enables the employer to instruct UnumProvident to continue to make benefit payments direct to the former employee.
"By comparison, traditional Group Income Protection (GIP) schemes pay a replacement income to an employee who is off work due to sickness or injury direct to the employer. The employer would then pass on this income to the employee, whilst keeping the employee on the payroll. Of course, employers still have this option available to them.
"However, for some companies, particularly those who have not previously included GIP in their benefits packages, Pay Direct can deliver benefits in terms of better HR management control, in addition to more effective resource management. In addition, it may be beneficial for companies that need to attract a highly skilled workforce, such as software technology companies, advertising agencies, engineering consultancies and training companies.
"There are instances where an incapacitated employee has felt obliged to stay with an employer in order to receive benefit payments when they would have been capable and actually wished to try moving on to another job. Pay Direct would make this possible for them."
Pay Direct has been developed with the aim of maximising value and relevance to the customer. In particular, those employers who have concerns over the long-term liability that GIP might imply for their businesses, and who have not currently or previously bought it.
Wojciech Dochan added: "Despite the clear benefits afforded by GIP, market growth has been static for years and only six per cent of the UK adult population is covered. This protection gap, added to the UK's ageing workforce and the current labour shortage in the UK, means that many employers will be competing for a limited and selective pool of workers, who are now more aware and discerning when it comes to benefits packages on offer.
"Continuing changes to the Disability Discrimination Act (DDA) give brokers the opportunity to approach their clients to discuss compliance and new payment options."
Changes to the DDA, which came into force on 1 October 2005, mean that all employers, except the armed forces, have a duty to make reasonable adjustments to premises and working practices if not doing so would put their employee at a substantial disadvantage. Despite this, the point may come where continued employment of an employee with an illness, which results in long-term or persistent short-term absences, is no longer feasible because there are no further reasonable adjustments that can be made to allow the employee to continue working. In these circumstances, and following the proper procedures, it may be fairer to the employer, as well as the employee, to request payment of income benefit directly to the former employee.
In these circumstances, and following the proper procedures, it may be fairer to the employer, as well as the employee, to, as is now possible under Pay Direct, request payment of income benefit directly to the former employee.
Under Pay Direct, premiums are paid by the employer and the income benefit can be provided for a limited benefit period of two, three or five years or, alternatively, to a benefit Termination Age up to a maximum age of 70.
Vocational rehabilitation remains an integral part of Pay Direct, and wherever possible medical and rehabilitation teams will work with the employee and the employer to bring about a successful return to work.
ENDS