Health screenings could be cut due to increasing costs
Employers may put an end to health screenings and medical check-ups due to new income tax regulations, according to Employee Benefits & Health Insurance Magazine.
The warning follows an amendment to the Income Tax (Exemption of Minor Benefits) Regulations 2002, introduced by HM Revenue and Customs (HMRC).
It states that health screenings will only be exempt from tax if they are available to all employees and medical check-ups must also be available to all staff, or those who are identified in a screening as requiring one.
Adrian Norris, managing director of Buck Consultants (Healthcare) told the industry publication, Health Insurance magazine, the amendment was a “bombshell”. He says extending screenings to all employees would create enormous costs for businesses.
He said: “Questions need to be asked about what the objective was behind the regulations, health screening is commonly described as executive screening because the majority of organisations only buy it for their senior staff as an executive benefit. HMRC seems to be operating in its own world and making its own judgments about how benefits and tax fit together.”
Chris Evans, head of health and risk development at PIFC Consulting, also told the magazine the regulations appear to be a “crude attempt” to encourage businesses to offer health screenings to all of their employees.
He suggested that the amendment could mean many employers will cut the services if they believe the tax burden outweighs the benefits.
But Dudley Lusted, head of corporate healthcare development at AXA PPP healthcare, said that it is not clear if all staff have to be given the same level of health screenings for them to be tax exempt.
He suggested that employers could offer cheaper screenings to all of their staff and more extensive screenings to their executive employees.
Furthermore, he said that not everyone would have to actually undergo the screening but it must be available to all staff or employers will face a tax charge.
He told Health Insurance magazine: “Unless the employer is willing to pay this tax, there will be a reduction in the number of employees taking up the benefit.”
The warning follows an amendment to the Income Tax (Exemption of Minor Benefits) Regulations 2002, introduced by HM Revenue and Customs (HMRC).
It states that health screenings will only be exempt from tax if they are available to all employees and medical check-ups must also be available to all staff, or those who are identified in a screening as requiring one.
Adrian Norris, managing director of Buck Consultants (Healthcare) told the industry publication, Health Insurance magazine, the amendment was a “bombshell”. He says extending screenings to all employees would create enormous costs for businesses.
He said: “Questions need to be asked about what the objective was behind the regulations, health screening is commonly described as executive screening because the majority of organisations only buy it for their senior staff as an executive benefit. HMRC seems to be operating in its own world and making its own judgments about how benefits and tax fit together.”
Chris Evans, head of health and risk development at PIFC Consulting, also told the magazine the regulations appear to be a “crude attempt” to encourage businesses to offer health screenings to all of their employees.
He suggested that the amendment could mean many employers will cut the services if they believe the tax burden outweighs the benefits.
But Dudley Lusted, head of corporate healthcare development at AXA PPP healthcare, said that it is not clear if all staff have to be given the same level of health screenings for them to be tax exempt.
He suggested that employers could offer cheaper screenings to all of their staff and more extensive screenings to their executive employees.
Furthermore, he said that not everyone would have to actually undergo the screening but it must be available to all staff or employers will face a tax charge.
He told Health Insurance magazine: “Unless the employer is willing to pay this tax, there will be a reduction in the number of employees taking up the benefit.”
Labels: Employee Health Benefits, Employee Medical Benefits, health news, private health insurance news
Posted by Health Insurance News at 13:26
