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We all wish to support our employees in times of need.
However, businesses also need to be able to make commercial decisions regarding employees who are unable to work over the long and short term. They cannot afford to fund the support for an indefinite number of employees for an indefinite period of time.
Group insurance is available to employee groups or formal associations of 15 people or more.
A group plan enables employers (or associations) to offer significant financial support to employees if an accident or illness prevents them from working for an extended period of time, or in fact, ever again.
The most common group insurance is Group Salary Continuance (GSC), a group version of income protection. Life and Total Permanent Disability insurance is also available as group cover.
A GSC policy can provide a replacement monthly income (of up to 75% of current income plus superannuation contribution) for as long as the employee needs it (up to age 65), after the waiting period (usually 90 days) has been served.
With a group plan in place, should a long term illness or injury befall an employee, the cost to the business will be limited to the accrued sick leave, and a discretionary payment of replacement salary up to the 90 day waiting period.
The benefits of group cover are twofold:
- Certainty for employees, and the significant goodwill that will come from that understanding, and
- Certainty for employers – limited financial liability and significant, definable, corporate benevolence
Depending on the number of employees and their occupations, many plans will include an Automatic Acceptance Level (AAL). Providing an AAL means that employees will be automatically covered up to a predetermined level. This saves a considerable amount of time in medical underwriting and provides certainty of outcome, as all eligible employees will be offered cover up to the AAL.
The right group plan may also include ancillary benefits which can provide benefits payments inside the waiting period.
If you already offer a Group Plan within your business:
If your business already offers a GSC policy to your people then it is important that it is promoted well within the staff group, as well as ensuring that the administration of the plan runs efficiently.
The real effectiveness of a scheme is highlighted at claim time and it is essential that the impacted employee is assisted throughout what is usually a traumatic time. By appointing an adviser to the scheme, the employer delegates responsibility to an expert in this field and ensures the best result for both the employee and employer.
Grant Thornton administers and advises on several large group plans and is very proud that we have been able to assist employers deliver some excellent financial outcomes for injured and or sick employees.
Our Group Risk advice department can assist an employer with the following aspects of their group arrangements:
- Provide advice and illustrations regarding the implementation of a new scheme
- Carry out a tender to review the pricing of an existing policy
- Review the internal promotion/marketing of the existing scheme
- Carry out an efficiency audit to streamline the administration responsibilities of the payroll and finance departments in running the scheme
- Create a claims process to ensure optimum outcome for both claimant and employer
- Introduce an additional executive wealth protection and accumulation advice offering to the business’ executives to discuss their overall financial goals and objectives