We have been considering putting in a permanent health insurance scheme at
our company and have heard that this may help us to comply with the
Disability Discrimination Act. Please can you give us more information.
The Disability Discrimination Act came into effect on Decem-ber 2, 1996
and was extended in October 1999 to cover the way in which goods and
services are provided.
The act has made it illegal to discriminate against disabled people in a
variety of areas including employment.
Discrimination occurs when a disabled person is treated less favourably
than someone else as a result of his or her disability. The definition of a
disabled person covers people who have or have had a disability which makes
it difficult for them to carry out their normal day-to-day activities.
An employer must ensure that it complies with the act in all areas of
employment including the recruitment and selection process, terms of
employment and employee benefits, promotion, training and dismissal.
The act requires an employer to make any reasonable adjustments to allow a
disabled employee to return to work after an accident or illness. Some of
the examples of adjustments given in the act include adjustments to the
premises, acquiring or modifying equipment or providing a reader or
The employer can dismiss a disabled employee if such adjustments are not
possible and they cannot undertake sufficient of their normal duties.
However, this must be done very carefully to avoid possible prosecution
under the act.
The employer would be required to show that the essential demands of the
job were identified, possible adjustments were considered and discussed
with the employee and, where appropriate, expert advice was taken.
The act can be enforced by an employee or potential employee bringing a
complaint to an industrial tribunal.
The tribunal is given wide powers under the act. If it is decided that
discrimination has occurred, it can require the employer to grant
compensation and/or take any remedial action which it feels is appropriate.
A permanent health insurance plan is an insurance policy which provides an
income to employees who are unable to work due to ill health. The income
will be paid after a specified waiting period and will usually continue
until the employee returns to work or reaches retirement age.
A PHI scheme can help the employer in a variety of ways. If the correct
policy is chosen, it will provide an income if an employee is not able to
do their own job. The assessment of this will depend on similar essential
duties as required under the act.
The income from the insurance policy will usually be paid as a gross
amount to the employer to be passed to the employee via the payroll. This
ensures that employment can effectively continue without causing a
financial burden on the employer.
PHI plans can also provide cover for employers' National Insurance
contributions and pension premiums so all employment costs can be met.
The income provided by the policy will obviously be welcome for any
employee concerned about maintaining their livelihood in the event of
long-term ill health. In such circumstances, where the employee is unable
to return to work, continuation of income via the policy should lead to an
amicable agreement with the employer.
Additional services can also be provided via the insurance company, which
will be able to provide help in defining the essential duties of the
employee's job along with information about adjustments which can be made
in the workplace.
Most leading insurers in this market also employ specialist counsellors
who will assist both the employee and employer on an ongoing basis.
If the insurer can help the employer to make necessary adjustments to the
workplace which allow the employee to remain employed, even on a lower
income, this will be in everyone's interests. The insurer will continue to
pay a reduced benefit if any reduction in the employee's duties means their
salary has to be reduced from its former level.
There are a large number of PHI policies on the market which vary
enormously not only in cost but also in terms and conditions. I would be
happy to discuss your company's individual requirements and provide details