There is no age discrimination where there is refusal to extend permanent health insurance (PHI) cover beyond the age of 60.


The claimant, Miss Smith, was on sick leave and receiving payments under her employer’s permanent health insurance scheme (PHI). The employer introduced a new PHI scheme in 2007 which covered employees up to the age of 65, but the claimant was not invited to join this scheme as she was already receiving the benefit of the other policy. Upon reaching the age of 60, the employer ceased to make those payments in accordance with the terms of the scheme in force. Upon being notified of the cessation of her PHI payments, the claimant claimed direct age discrimination. That is, by not continuing her PHI payments beyond the age of 60, the employer had treated her less favourably because of her age and its position could not justified.

The claimant’s claim at first instance was struck out, and she appealed to the Employment Appeal Tribunal (EAT).


The claimant’s claim was unsuccessful. The EAT determined that the terms of the insurance policy were those of the insurer, not the employer. Therefore, the decision not to make payments beyond the age of 60 could not be direct age discrimination perpetrated by the employer. Further, the employer’s decision not to extend the PHI policy introduced in 2007 to the claimant was not direct age discrimination. She could not benefit from the new policy because she was already claiming under the previous policy. Nor did she meet the conditions of the new scheme, given that she was not activity working immediately before beginning to claim.

Points to note

Where an employer ceases to make PHI payments in accordance with an insurer’s terms, this will not amount to direct age discrimination by the employer. Equally, an employer is not obliged to transfer an employee already receiving benefits to another scheme which provides benefits to a later age. Employers should also note that under the Equality Act 2010, employers are able to cease offering PHI and other insured benefits at the age of 65 or state pension age, whichever is higher.