The Big Question: Should employers provide healthcare perks for older workers?

2011-09-26

Despite the fact that age discrimination legislation allows employers to restrict access to certain insured benefits beyond state pension age, many organisations are now starting to realise it is beneficial for long-term business strategies to respond to the challenges of an ageing workforce. Exemptions do not apply to certain health provisions, such as screening and flu jabs, but there are many other health matters related to an elderly workforce.

Older staff are naturally more susceptible to ill-health in terms of incidence, severity and recovery, which has various implications for the employer. While organisations may promote NHS provision to target certain health risk groups, such as NHS smoking cessation, this is not a one-size-fits-all strategy. A report by the Institute for Employment Studies, An ageing workforce: the employer's perspective, in October 2009, found that about one-third of the workforce is managing a chronic illness by the age of 50, and general health issues are the primary driver of early retirement. This adds to work-related musculoskeletal disorders, which are one of the most common and increasing causes of absence and long-term incapacity.

How much an employer invests over and beyond 'standard' adds perceived value to the business and helps attract, retain and motivate older, experienced staff. Targeted benefits that help detect or mitigate health problems are also likely to generate the greatest engagement among existing staff and could minimise risk exposure. So making provision relevant, rather than topping up for older workers, produces a benefits strategy that reflects employees' changing needs throughout their working life, offering the greatest likelihood of success.

- Chris Evans, senior consultant at Buck Consultants

Given that we have a workforce in many sectors that is ageing, organisations are going to have more people with potentially chronic problems that need intervention, some of which will be surgical intervention, some of which medical. Given the state of the NHS, the likelihood of that intervention being done quickly is pretty slim.

So the simple answer to the question is: employers need to look seriously at their cost benefit in terms of whether they provide healthcare benefits, by looking at their age profile and gathering some information about the sort of thing people are off with, and particularly off with in the long term. If they are not off, what are the chronic conditions that are causing underperformance?

Do employers rely on paying on an ad-hoc basis, or pay for cover for everybody? If they have a lot of older workers, the cost of the premium will be significantly higher than if they have a younger workforce.

So my experience would say that if an employer does not have cover, when it comes to individuals who are identified as needing intervention, and if the NHS cannot do it quickly enough, then it will pay on an individual basis for intervention.

Try to keep the people who are well, well. Invest in those who are well: that is worthwhile.

You cannot look at these issues of healthcare benefits in isolation. You have got to look at the bigger picture, and the single most important message that comes out with older workers is flexibility of employment.

- Professor Sayeed Khan, chief medical adviser at EEF, the manufacturers' organisation, and special professor in occupational health at the University of Nottingham

A quick look at the facts is interesting. In 1995 there were nine million people in the UK aged over 60; in 2030, just 19 years away, it is estimated there will be 13 million. And the trend continues for women to have children later in life. The abolition of the default retirement age means many workers will be forced to work longer. So what is the obvious conclusion for employers? We will all have an older workforce.

But traditional wisdom tells us 'older people get sick more often', so our ageing workers are likely to be off sick and this will increase our health and wellbeing costs. It is easy to see the temptation to reduce risk and cut benefits for these workers.

There are things employers can do to manage this risk. Prevention continues to be better than cure, and is one of the reasons we are living longer. Comprehensive employer-funded health screenings and early interventions will make increasing sense for all workers, regardless of age.

So might it make sense for the NHS to bear the treatment burden when they do get sick? Many diseases, especially cancer, have no respect for age, and we continue to insure younger staff against such high-cost episodes, so why not older staff too? The skills and knowledge that keep you competitive are increasingly going to rest with older workers. The combined cost of prevention and insurance begins to look like it could have a return.

- Chris Coyne, group head of reward at City and Guilds