Introducing a benefits package

In our experience there is no specific right and wrong time to introduce a benefits package or deciding what benefits to include.  I wanted to talk about what some of our clients have done in the past to give you an idea of what works.

2020 has been a hard year for most companies but that does not mean that you should be putting employee benefits on the back burner.  We have had several new and existing clients enquiring and setting up new benefits packages as they have seen the value in investing in the health and wellbeing of their employees at this time of upheaval.

In fact, most companies that we speak to are surprised at how useful and user-friendly benefits can be implemented in a cost-effective way.  I will go through what we would consider to be the good building blocks for a new benefits package based on cost verses usability.

The first thing to consider is what do your employees want?  There is no point putting a scheme in place that does not reflect the needs of the staff but there are three benefits and services that everyone can use.  These are:

These three represent the most cost-effective benefits that any company can put in.  They also have a little or no P11d/Benefit in Kind liability.  Each service provides your employees with different support.

Group Life Assurance

This is an insurance designed to pay an employee’s financial dependants an agreed lump sum (tax free) in the event of their death whilst employed by the company.  On average new scheme have a salary multiple of between 1 and 4 times.  The average is 3 x salary.  However, you can have a specified lump sum if you wish everyone to have the same benefit.  This can be as little of £10,000 to cover unexpected funeral costs and outstanding payments and can be up to the equivalent of 8 x salary.

In general, a group life scheme will cost between 0.5 and 1% of payroll depend on the level of cover.  There are some other considerations around setting up a Group Life scheme.  The main ones are that the scheme must be written in a trust and registered with the HMRC to ensure that any payments to beneficiaries are tax exempt.  We can talk you through the mechanics of this.

I feel that this is a must for all companies.

Health Cash Plans

Cash plans are one of the most popular benefits that we organise for our clients.  The premise of a cash plan to provide proactive support for the employee and help pay towards everyday health expenses like getting your dental check-ups, getting your eyes tested or getting prescriptions paid.  Generally the other additional benefits include paying towards therapists such as physios, chiropractors, osteopaths and acupuncturists) as well as money towards (but not limited to) consultations and diagnostic tests together with virtual GP services and perks savings.

They are very inexpensive starting from as little as a pound a week per employee and children under 24 are generally free.  Employees can have the option to add partners or upgrade to higher levels if the company allows.

There is a P11D/BIK benefit to pay by the staff on the company paid portion of the premiums.  Most clients we have pay for level one, £1 a week or £52 a year.  the average employee will only pay £10.40 a year or 87p a month each tax and they can claim up to £70 for optical and £70 dental as well as other benefits so makes it all worthwhile.

Employee Assistance Programme (EAP)

An EAP provides 24/7 365 days a year support for your employees if they need to speak to a counsellor, get legal or financial advice and general lifestyle support.  Depending on the package purchased the EAP can include structured counselling which can be either via the telephone, face to face or more recently virtually.

We would always recommend that you include structured counselling as this ensures that there are no barriers to your employee starting the support journey that they need.

These services are the cheapest but most useful wellbeing support programme that you can put in place.  for example, the cost for a standalone EAP with 50 employees including six face to face counselling sessions would be around £1,000 plus VAT.  It would be cheaper if we bundled it in with the other schemes.

We can provide a much more detailed quotation and information for the breadth and depth of an EAP service.

How much would this cost?

Putting in one or more of these benefits and services is a good place to start.  We have found that each individual company requirements are different and the issues faced may mean that one is prioritised over the other.

Using the example of 50 staff the average cost of a group life scheme would be around £3,000, a bundled EAP would be £800 (plus VAT) together with a level one cash plan at £52 per employee would be £2,600.  So you could get all three for less than £6,500 per year or £130 per person.

Putting this in prospective this equates to a 0.04% pay rise on the average UK salary of £30,800*(based on ONS data for financial year end 2020).  For this you get financial security for your immediate family if the worst happened, access to preventative healthcare and a year-round support service.

The team at Health Matters would go into a lot more detail and take time to explain how each scheme works, which provider fits your requirements and then create a bespoke launch for your staff.

James Henson

Managing Director.


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