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COVID-19 is challenging us all like never before. For leaders, balancing the interests of their people with long term business viability is a major challenge, and one bringing considerable disruption to daily operations.
Through times like the present, a robust employee benefits program truly comes into its own. Not only do employee benefits packages offer financial security to businesses and their people, but peace of mind. To this rings true, the particulars of benefits programs must be clearly communicated to all employees through COVID-19.
In the following article, we step through common cornerstones of employee benefit packages (EBP), and how they’re likely to be impacted through COVID-19.
Firstly - there is no specific pandemic exclusion for private health insurance in Australia. This is a major win, which should be communicated upfront to all employees with private health insurance included in their EBP.
As usual, waiting periods may apply for employees who have taken out private health for the first time in the last 12 months - be sure to alert any program ‘newbies’ accordingly.
Health insurance premiums in Australia are typically reviewed each year on 1 April, however major local health insurers such as BUPA, GU Health and NIB have announced that rises initially slated for 1 April 2020 rollout will now be delayed for six months. No action is required from existing policy holders on this front.
The Federal Government has also announced increased capacity of Telehealth Services as a means to connect more Australians to essential health services (doctors, nurses, midwives and allied health professionals including mental health), and in turn, greater protection for those most vulnerable in our community. This service is funded by Medicare - Australia’s Government funded public health system.
Further information on Telehealth services can be downloaded from the Department of Health website.
General speaking, company-funded Life and Group Income Protection Insurance policies do not have a specific pandemic exclusion. The Financial Services Council of Australia has announced that no specific pandemic exclusion exists on life insurance policies taken out prior to 11 March 2020. Thus, any claims from pre-existing customers will be treated in accordance with their policy terms and conditions.
For new policies purchased post March 11, some underwriting implications may arise for Life and Disability Cover, especially for those employee groups who are considered high risk.
In addition to the above, Group Income Protection policies generally have a waiting period of 30 days or more. With COVID-19 patients typically recovering within 14 days, a policy holder is therefore unlikely to have a COVID-19 related claim paid under Group Income Protection if they return to work within the standard 30 day waiting period. However, the claimant may be eligible if they are still unwell and unable to return to work once they have satisfied their relevant waiting period. We recommend contacting your insurance broker and provider to clarify the semantics of your policy through COVID-19.
The Australian Government has confirmed that employees facing financial hardship due to loss of employment or reduced income may be able to withdraw up to $20,000 over the next two financial years without any tax implications. Employees will need to meet certain eligibility criteria as stipulated by the Australian Taxation Office, in order to qualify for such drawdowns.
Employees should be encouraged to utilise company sponsored EAPs to guide and support them through COVID-19 and beyond. With the vast majority of employees experiencing changes to working hours, income levels, places of work and business operations at large, stress and anxiety is high. EAP programs offer invaluable access to qualified professional counsellors for work and personal matters alike. Consultations can be carried out via phone or video calls in line with social distancing protocols during this time.
At Honan, we understand the power of holistic employee benefit schemes, and the exceptional value they can offer your organisation during this global pandemic and broader economic crisis.
With deep expertise in employee benefits solutions, we’re well versed in collaborating with clients to navigate the ever-changing complexities of today’s workplace. Attracting and retaining top quality talent should be one of your company’s most competitive edges, and we love nothing more than supporting organisations - of all shapes, specialities and locations - to ensure this is so.
We’d love to hear from you.
