Many of our clients provide group risk insured benefits for some or all of their staff. These include access to benefits such as such as private medical cover, income protection and PHI. Unsurprisingly, these benefits may become increasingly expensive to provide to an older workforce. Equally, limiting access or benefits to employees under a particular age is clearly potentially age discriminatory.
Bearing that in mind, there is a statutory exception to age discrimination under the Equality Act 2010 which allows employers to stop providing access to group risk insured benefits to employees when they reach the greater of either the age of 65 or the State Pension age. With the State Pension age gradually increasing over the coming years, most notably increasing to 66 between 2018 and 2020 (depending on an employee’s precise date of birth), this will mean that the applicable age for the statutory defence will also rise to 66. Therefore, should you continue to have a cut off for access to insured benefits at the age of 65, when their State Pension age is 66, you will no longer be able to rely on the statutory defence. We believe that employers would struggle to justify the age restriction if they cannot rely on the statutory defence. Our advice would be for employers to consider carefully whether to increase the higher cut off date in the next renewal round.