Health insurance for older workers

January 17, 2012 12:29 pm Published by

At age 65 most employees used to have taken their leave of work and donned their slippers. Now, unless they can afford to retire and wish to do so, they will continue at work, and can carry on as long as they can do the job. Meanwhile of course they will be getting older, and then much older, and if their employment gives them the benefit of health insurance the cost of providing it is likely to be greater and then much greater for their employer.

When age discrimination first came in under 2006 Regulations it was difficult for employers to get out of continuing to provide health cover for employees over 65: mere increased cost was not seen as much of an excuse for such unfairness to the older worker! But when the law on age went further last year, and forced retirement was abolished, thankfully it was realized that employers needed to be able to refuse health insurance for those over 65, because otherwise the costs would be such that employers may well stop health insurance at all! The new law on age therefore includes an exemption which allows employers to not offer or to withdraw benefits (such as health insurance and life assurance) for employees at the point when they reach the age of 65. The exemption means that to stop such cover at 65 should not give rise to a claim of age discrimination.

However, is the law ever simple? Even though not age discrimination, if an employee has the right under their contract to health insurance then to stop it will still be breach of their contract. Therefore they should be consulted and asked to agree a change, with agreement confirmed in writing. Consider offering to add to their pay money equivalent to the cost of the cover for those under 65, or let the employee choose to pay to top up the age-related increase in cost so as to keep their cover going under the Company scheme. If all else fails and agreement cannot be reached, if the cost of keeping the cover going over 65 or older is prohibitive then the employer can withdraw the contract and offer another one without the cover: as this is a dismissal and re-offer, take legal advice first to make sure the risks are lowered as much as possible. After all, the alternative is to pay out whatever it takes, until death potentially, and funding health and/or life insurance for a bunch of 70 – 80 – 90 year olds would probably be the death of any business!

The above is general only and specific advice should be taken before action.

Frances Barker

Frances Barker is employment parnter at Blocks Employment Service. Contact her at Blocks Solicitors on tel. 01473 343911 orfrb@blockslegal.co.uk

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