Covid-19 – The Impact on Employee Benefit Insurances
As we enter another week of lockdown, the statistics surrounding Covid-19 become more concerning and the impact upon business takes a stronger grip, a number of questions arise as to how the virus, and the actions being taken by business in the face of the challenges it raises, can impact on the insurance policies companies have in place for their employees.
These questions are most pressing where companies are just implementing plans, perhaps to provide some support to employees, or are reaching their annual renewals. We have tried to answer a number the more frequent of these questions below. They are primarily applicable to Group Life Insurance Schemes, Group Income Protection and Group Critical Illness Cover. Ultimately, policies will be governed by each insurer’s specific terms and conditions and our comments are, therefore, generic. If you would like a more comprehensive response on a particular insurer’s stance please feel free to contact us.
Group Life, Income Protection and Critical illness
Q. How is self-isolating/shielding treated with regard to an employee being actively at work?
A. If a member is self-isolating/shielding (and remains an employee), but is otherwise capable of work as defined by the policy and has not been instructed to refrain from work for medical reasons they are actively at work for the purposes of insurance.
Q. The company is having to temporarily shut down/reduce hours and pay/furlough employees. Are our employees still covered and actively at work?
A. As long as the insured remain as employees, insurance premiums are being paid and they are otherwise able to work as defined by the policy, cover remains in force and the salary used will be normal contractual salary/hours.
Q. What happens if employees volunteer to assist the NHS or other support services?
A. As long as premiums are paid and the insured remains an employee cover remains in force subject to standard restrictions.
Group Life Insurance Schemes
Q. Is Covid -19 covered under the death-in-service scheme?
A. There is no general restriction for this condition although most insurers do have general restrictions regarding travel to zones designated ‘RED’ by the Foreign and Commonwealth Office (FCO).
Q. What happens to insured employees abroad?
A. Insurers will generally not cover eligible employees travelling to FCO Red zones. However, this restriction applies to employees travelling subsequent to a Red zone being designated as such. Those employees who travelled prior to designation will ordinarily be covered.
Q. What is the catastrophe limit and could it apply?
A. The catastrophe limit, sometimes referred to as the single event limit, is the maximum aggregate level of cover under a policy where the cause of death/s is one or a series of events from an originating cause. In theory this limit might apply, but it is unlikely to be an issue as for most employers it is likely to be significantly higher than the total sum assured. If there are concerns the individual policy limit should be referred to and it may be possible to look at topping up this limit if appropriate.
Group Income Protection
Q. Will claims be paid if a member is diagnosed with Covid-19?
A. Covid-19 is not excluded for GIP policies, but the standard terms and conditions will apply; the deferred period will need to be adhered to and the individual will need to demonstrate their inability to work as defined by the policy due to illness to the satisfaction of a medical referee.
Q. If a member is self-isolating/shielding how will this affect the deferred period?
A. If a member is self-isolating/shielding, the deferred period will be treated as having started at the date the individual was deemed to have met the definition of being unable to work.
Q. What happens if an individual has several episodes of Covid-19 or an underlying medical condition triggered by Covid-19, that don’t last as long as the deferred period?
A. Repeat periods of being unable to work from the same cause can be linked together for the purposes of meeting the deferred period requirements.
Group Critical Illness Cover
Q. Is Covid-19 covered under critical illness cover?
A. Covid-19 is not a listed critical illness. However, claims under other listed illnesses will be considered, regardless of catalyst.
Private Medical Insurance, Cash Plan, EAP’s, Online GP services
Q. Does the Private Medical Insurance cover Covid-19?
A. Covid-19 is not catered for in the private sector currently with emergency treatment and hospitalisation being picked up under the NHS. Private provision has reacted by introducing enhanced and extended hospital cash benefit to support members hospitalised by the illness the specific details will be on a company by company basis.
Q. How does my Private Medical Insurer’s wellbeing programme operate with the closure of gyms and restrictions on communal exercise facilities?
A. Certain providers have introduced virtual exercise support on a no cost basis for members to access from their own homes – such as Peloton etc.
Q. Do EAP’s provide advice on Covid-19?
A. The best source of information on Covid-19 is still the Government (www.gov.co.uk). EAP providers will continue to provide support around all aspects of the virus in respect of financial, legal, and emotional issues arising out of the pandemic. In addition to standalone provision, some insurance policies offer EAP’s as a free benefit.
Q. Does the Online GP provide Covid-19 guidance and diagnosis?
A. Online GP’s are not the best place to go for Covid-19 specific support, this is still the NHS on 111. Online GP’s can remove the wait to access GP support for all other general medical enquiries. In addition to standalone providers, some PMI policies and Cash Plans offer online GP services within their proposition.