COVID-19 – Guidance for employers
- Group risk, healthcare and international health & risk insurances
- Voluntary travel insurance
- Furloughing your employees
- Our Road Map to help you respond to the global crisis
- Guides for employers
- COVID-19 Benefits Survey Report – UK
Group risk, healthcare and international health & risk insurances
The following information was last validated on 15 May 2020.
In terms of your employee group risk, healthcare and international health and risk insurances, the insurance providers have been extremely quick to react, updating and amending their terms, ways of working and standard approach to help with the challenges we face with COVID-19.
The insurances, in most scenarios, remain broadly unaffected; however, it should be noted that some insurances, such as, dental, critical illness and travel would either not feature in this situation or have an exclusion as part of the standard terms. Please check your policy terms, and your specific insurer’s website here, for their latest updates on COVID-19.
Each applicable policy of insurance must be reviewed to determine the extent, if any, of coverage for COVID-19. Coverage may vary depending on the jurisdiction and circumstances. For global client programs it is critical to consider all local operations and how policies may or may not include COVID-19 coverage.
Voluntary travel insurance
The following information was last validated on 15 May 2020.
This advice relates to travel insurance as part of employer flexible benefit arrangements, and how coronavirus (COVID-19) impacts the terms offered. With many employees considering the purchase of such insurance and potentially thinking about their travel plans at this time, there are some important points to note.
The policies will typically be annual policies which are employee funded through flexible benefit programmes set up by their employers. In the flexible benefit market, the majority of employer plans will be set up through Crispin Speers & Partners (CSP) or Pen Underwriting (PEN) and insured through Lloyd’s of London. These travel insurance plans, offered by both CSP and Pen, will have an exclusion relating to pandemics in respect of cancellation cover. This is relevant because coronavirus (COVID-19) was officially classed as a pandemic by the WHO on 11 March 2020.
We are aware this may differ to the approaches of some insurers in the individual retail market, as these may not have a pandemic exclusion, and this could lead to questions from your employees.
However, this is not straightforward as there are many different types of travel policy available in the individual retail market. Some insurers offer base plans with different modules to ‘buy up’ to comprehensive cover, so coverage will be dependent on what modules an individual has purchased. It is unclear at this stage how insurers will apply some of the other exclusions included in the plans. For example, some insurers have exclusions relating to the cancellation of cover in the event of ‘government action’ or ‘an order of regulation’.
Clearly the insurers are regularly reviewing their terms at this time and you may have seen in the press recently that several have updated their position in the individual market, for example, Aviva and the Post Office have both removed cover for coronavirus related claims from their consumer travel plans and LV announced they are suspending sales of travel insurance.
What to do, and further information
The general advice from at the moment is for employees to understand what cover is available through their current travel insurance provider.
For those employees who are thinking of changing their travel plans, they should contact their travel company provider or credit card company to progress any refunds through the schemes these organisations are likely to have in place. For those insured through CSP, there is a useful FAQ section on their website here: http://www.eb.cspinsurance.com/index.php/324-coronavirus-faq-update
There is also further information available from CSP here: http://www.eb.cspinsurance.com/index.php/newsmain/323-coronavirus
If you have specific queries relating to the terms of your policy which are not covered here, or any other aspect regarding your employee benefits programmes, please contact us
Furloughing your employees
Update from HM Treasury on 12 May 2020:
- The Coronavirus Job Retention Scheme will be extended to 31 October 2020.
- From the start of August, furloughed workers will be able to return to work part-time with employers being asked to pay a percentage towards the salaries of their furloughed staff – detail around the application and implementation of this will be published by the Government at the end of May.
Clearly we are not legal advisers, but listed below are employer considerations we have seen and heard in the market in relation to furloughed workers and these may be points you wish to consult your legal team on:
- The Coronavirus Job Retention Scheme is open to all UK employers with a PAYE scheme and a UK bank account to support employers and their employees who would have otherwise potentially been laid off, made redundant and lost their jobs.
- Employees, who have been asked to stop working, but who are kept on the employers payroll, will be able to benefit from the Government’s Scheme and receive 80% of their pay up to £2,500 per month (this is pay only and will not cover bonus or commission or other such variables). Employers will also be able to claim for their National Insurance Contributions and auto-enrolment pension contributions based on the furloughed pay from the Government.
- The HMRC guidance states that reference salary should not include the cost of non-monetary benefits provided to employees, including taxable Benefits in Kind and the guidance states that benefits should be in addition to the wages that must be paid under the terms of the Job Retention Scheme. Elsewhere the guidance states the cost of benefits or salary sacrifice schemes cannot be taken from the government grant that is received to cover an employee’s subsidised furlough pay. This clearly needs further consideration as regards the provision of salary sacrificed and other employee funded benefits provided through flexible benefit arrangements.
- It will be for employees on PAYE as at 28th February and be effective from 1st March initially for a period of three months – this isn’t law yet, and is currently based on HMRC guidance, but this will be law in the near future.
- It is important to note that employees can’t work while furloughed by their employer (they can take part in training), but all other employment rights continue.
- Employees who may have initially been made redundant as a result of the pandemic could be re-hired and benefit from this Scheme, as could those on unpaid leave, but any employee who has had their contract changed already to reduce pay would need to have this re-visited to benefit fully from the Scheme, we understand.
- There is the need for employers to consider a ‘furlough agreement’ with their employees so that the reduction in pay will not be considered ‘an unlawful deduction from pay’ and so all parties clearly understand what is and what is not being provided, for example, this could include details around an employer topping up the Government amount to full pay.
- While an employee is furloughed it will be possible to take part in volunteering or to work for another entity (if allowed within their contract of employment), it may also be possible to rotate furlough periods, for example, full pay and work for a period of time followed by a period of furlough and no work. The minimum period for furlough is three weeks.
This information is for general interest and guidance. Action should not be taken on the basis of any of the above information without seeking specific advice.
Global Crisis: Human Capital Road Map
Our advice to organisations and their leaders on how to respond to and manage the COVID-19 pandemic.