# Permanent Health Insurance. Is it linked to my pension?



## WaterWater (3 Jun 2009)

A lot of companies provide Permanent Health Insurance for their employees in case they can no longer work due to ill health.  My question is, is this part of my pension scheme and paid for out of my pension scheme or is it a separate poilcy with nothing whatsoever to do with my pension?.


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## StevieC (3 Jun 2009)

It can be part of the main scheme but even when it is typically it is paid for separately by your employer. I very much doubt that the cost of it is being taken from your pension contributions but a read of your scheme rules would clarify this for sure.


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## IsleOfMan (4 Jun 2009)

I rang Mercer with a similar query about this and they refused point blank to talk to me saying that my company was the policyholder and as such would not discuss it with me. I always thought that it was linked to my pension in some way?


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## StevieC (4 Jun 2009)

IsleOfMan said:


> I rang Mercer with a similar query about this and they refused point blank to talk to me saying that my company was the policyholder and as such would not discuss it with me. I always thought that it was linked to my pension in some way?


 
No generally, where there is PHI and/or Life Assurance, the cost of these risk benefits is not taken from the pension contributions. The costs are paid by the employer. All the benefits show on one benefit statement simply because one insurance company administration system is used to do all the calculations. Again if you look at the scheme rule book which would be available from the Trustee's this will clarify for sure.


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## IsleOfMan (4 Jun 2009)

StevieC said:


> No generally, where there is PHI and/or Life Assurance, the cost of these risk benefits is not taken from the pension contributions. The costs are paid by the employer. All the benefits show on one benefit statement simply because one insurance company administration system is used to do all the calculations. Again if you look at the scheme rule book which would be available from the Trustee's this will clarify for sure.


 
Do you know if, generally, a pension scheme has any type of insurance cover attaching to it and if so what are the types of things that might be covered?


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## StevieC (4 Jun 2009)

A pension scheme can have life cover, serious illness cover, spouses pension and PHI attached to it. It can be any, all or none of the above as every scheme is set up differently to the requirements of the employer. Even within a scheme there can be different benefits for example a single person may have life cover of 2 times salary while a married person has life cover of 4 times salary.

The scheme rule book is your bible for finding out what is covered and who pays for it.


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## IsleOfMan (6 Jun 2009)

We discovered recently that the *Permanent Health Insurance* attaching to Mrs. ParkLane's employment was in fact no cover at all.
The reason being that "twice her weekly social insurance benefit was to be deducted from the weekly Permanent Health Insurance payment". As twice the weekly Illness benefit is €408 it meant that Mrs. ParkLane had to be earning more than €408 per week before the Permanent Health Insurance kicked in.
Mrs. ParkLane had changed her employment to a 3 day week with a corresponding drop in pay. She had thought that the Permanent Health Insurance would allow for the fact that she was now only working a 3 day week and that it would be calculated on a Pro Rata basis. This was not the case.

The employers booklet that was given to her staff outlining the details of her Permanent Health Insurance was no more than a basic leaflet. When she asked, yes you guessed it, Mercer for a copy of the actual policy document to check the specifics she was told that as she was not the policy holder she could not see it.


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## bongo2 (13 Jun 2009)

Mercer would have acted correctly in not supplying a copy of the policy. Typically these are contracts between the Life Company and the employer and all the premium is paid by the employer, so if you want information you need to ask the employer. Whether or not they supply the information is up to the employer and will probably depend on what is stated in your contract of employment.


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## Complainer (13 Jun 2009)

WaterWater said:


> A lot of companies provide Permanent Health Insurance for their employees in case they can no longer work due to ill health.


My question is - is this benefit taken into account in the usual public/private sector wage comparisons bandied around this site and elsewhere?


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## WaterWater (1 Jul 2009)

ParkLane said:


> We discovered recently that the *Permanent Health Insurance* attaching to Mrs. ParkLane's employment was in fact no cover at all.
> The reason being that "twice her weekly social insurance benefit was to be deducted from the weekly Permanent Health Insurance payment". As twice the weekly Illness benefit is €408 it meant that Mrs. ParkLane had to be earning more than €408 per week before the Permanent Health Insurance kicked in.
> Mrs. ParkLane had changed her employment to a 3 day week with a corresponding drop in pay. She had thought that the Permanent Health Insurance would allow for the fact that she was now only working a 3 day week and that it would be calculated on a Pro Rata basis. This was not the case.
> 
> The employers booklet that was given to her staff outlining the details of her Permanent Health Insurance was no more than a basic leaflet. When she asked, yes you guessed it, Mercer for a copy of the actual policy document to check the specifics she was told that as she was not the policy holder she could not see it.


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## WaterWater (1 Jul 2009)

Isn't this the problem. Your company owns the policy and you cannot get specific details on what is covered only a "handout" from the employer. Every employee should be given a copy of the policy document by law.


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## Mpsox (1 Jul 2009)

ParkLane said:


> We discovered recently that the *Permanent Health Insurance* attaching to Mrs. ParkLane's employment was in fact no cover at all.
> The reason being that "twice her weekly social insurance benefit was to be deducted from the weekly Permanent Health Insurance payment". As twice the weekly Illness benefit is €408 it meant that Mrs. ParkLane had to be earning more than €408 per week before the Permanent Health Insurance kicked in.
> Mrs. ParkLane had changed her employment to a 3 day week with a corresponding drop in pay. She had thought that the Permanent Health Insurance would allow for the fact that she was now only working a 3 day week and that it would be calculated on a Pro Rata basis. This was not the case.
> 
> The employers booklet that was given to her staff outlining the details of her Permanent Health Insurance was no more than a basic leaflet. When she asked, yes you guessed it, Mercer for a copy of the actual policy document to check the specifics she was told that as she was not the policy holder she could not see it.


 
I had a similar situation relating to a part time staff member who went on long term sick but when we looked to claim for her, it turned out she would not be entitled to anything. In effect, the scheme was of no practical benifit to any staff member even though we were continuing to pay the premiums for them, so we were wasting money and the company providing the scheme was getting income for an insurance policy that they would never have to pay out on. All a bit of a joke


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## bongo2 (1 Jul 2009)

Mpsox said:


> I had a similar situation relating to a part time staff member who went on long term sick but when we looked to claim for her, it turned out she would not be entitled to anything. In effect, the scheme was of no practical benifit to any staff member even though we were continuing to pay the premiums for them, so we were wasting money and the company providing the scheme was getting income for an insurance policy that they would never have to pay out on. All a bit of a joke


 
This doesn't make sense as the premium is calculated as a percentage of the benefit. If there was no benefit for an employee then the premium would be nil


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## SlugBreath (6 Sep 2009)

Mpsox said:


> I had a similar situation relating to a part time staff member who went on long term sick but when we looked to claim for her, it turned out she would not be entitled to anything. In effect, the scheme was of no practical benifit to any staff member even though we were continuing to pay the premiums for them, so we were wasting money and the company providing the scheme was getting income for an insurance policy that they would never have to pay out on. All a bit of a joke


 
Is it not up to the company to design a Permanent Health Insurance policy that captures all staff to include part time staff rather than just purchase an off the shelf package.
Most companies advertise to their staff that they have a Permanent Health Insurance policy in place to cover them in the event of illness. I would have thought that a company would be negligent if after telling their staff that they had such a policy in place it turned out to be of no benefit whatsoever.
It seems most companies hand out a "booklet" to their staff on their PHI entitlements but then forget about updating their policy to allow for work time changes in the workplace.


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## Complainer (7 Sep 2009)

SlugBreath said:


> Most companies advertise to their staff that they have a Permanent Health Insurance policy in place to cover them in the event of illness.


While I agree with your core point, I just wanted to highlight that this valuable benefit applies to most *private sector *companies, and does not apply to public sector staff (a point that is overlooked in those public/private salary comparisions that get tossed around).


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## LDFerguson (10 Sep 2009)

Complainer said:


> ...I just wanted to highlight that this valuable benefit applies to most *private sector *companies...


 
Can you back up your assertion that *most* private sector companies offer Income Protection for their staff?  In my experience it is limited to some, mostly white-collar employers.  I've never come across a single building firm offering income protection cover to staff, or pub, or hotel, or restaurant...


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## Complainer (11 Sep 2009)

LDFerguson said:


> Can you back up your assertion that *most* private sector companies offer Income Protection for their staff?  In my experience it is limited to some, mostly white-collar employers.  I've never come across a single building firm offering income protection cover to staff, or pub, or hotel, or restaurant...


Fair point - it is mostly white collar in my experience.


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## SlurrySlump (3 Oct 2009)

Mpsox said:


> I had a similar situation relating to a part time staff member who went on long term sick but when we looked to claim for her, it turned out she would not be entitled to anything. In effect, the scheme was of no practical benifit to any staff member even though we were continuing to pay the premiums for them, so we were wasting money and the company providing the scheme was getting income for an insurance policy that they would never have to pay out on. All a bit of a joke


 
Did you re-negotiate the policy to include all your staff, both full time and part time and was there such a policy available to you?


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## Bronco Lane (11 Nov 2009)

Mpsox said:


> I had a similar situation relating to a part time staff member who went on long term sick but when we looked to claim for her, it turned out she would not be entitled to anything. In effect, the scheme was of no practical benifit to any staff member even though we were continuing to pay the premiums for them, so we were wasting money and the company providing the scheme was getting income for an insurance policy that they would never have to pay out on. All a bit of a joke


 
I would be interested to know how this was sorted Mpsox?


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## Grizzly (16 Nov 2009)

Mpsox said:


> All a bit of a joke


 
Certainly not for the staff member effected by this?


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