Health insurance age claims loom for firms that sideline older workers

Employers who provide health insurance as a benefit to staff could face claims of age discrimination if they fail to find cover for older workers, a City law firm has warned.

Reynolds Porter Chamberlain said it could be prohibitively expensive for employers to provide private medical insurance to cover treatment costs or health insurance policies – that provide an income for employees unable to work due to ill-health – for workers aged over the age of 65.

In some cases, it may be impossible to find private health insurance at all.

Geraldine Elliott, head of the employment group at RPC, said, “There is a big gap in the permanent health insurance market which makes it very difficult for employers who offer this benefit to satisfy their obligations to treat workers of all ages equally.

“With the uncertainty as to when older workers will retire and the claims risk they are likely to generate, insurers are often unwilling to extend cover to them.

“Although treating staff differently on the basis of their age can be justified under age discrimination legislation, employers can only do so to pursue a legitimate aim and if the means it is using are proportionate. On this basis, firms may be unable to justify not providing permanent health or private medical cover to staff who are over 65 simply because it is too expensive.”

This could lead to firms scrapping this benefit altogether or self-funding of treatment, Elliott added.

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