Rising insurance costs may push many companies to make changes to their private medical insurance (PMI) plans. According to Jelf Employee Benefits Research, about 55% of employers will likely change medical insurance arrangements within the next three years while 13% of companies may reconsider their PMI plans over the next five years.
Effective November 1, the standard rate of Insurance Premium Tax (IPT) shall increase from 6% to 9.5%. IPT is the tax payable each time an insurance policy, such as auto insurance and PMI plans, is purchased in the UK. The Association of British Insurers (ABI) advised that the rate hike will affect three million PMI policies.
Iain Laws, Managing Director of Healthcare at Jelf, said: “A flexible healthcare plan, in which employers provide a more focused, core healthcare topped up by the employer or employee, is undoubtedly an appealing option for companies.” Mr. Laws, however, warned that any immediate cost saving can create problems in the long-term in relation to value.
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