Weekly dilemma… Health insurance and the over-60s

Our current permanent health insurance benefit provision stops at age 60. The cost implications of extending such cover to age 65 are an increase of a third on premiums payable, which would make the scheme unaffordable. Would there be an argument for objective justification based on significant cost implications?

The new age discrimination regulations, which come into force on 1 October 2006, will broadly make it unlawful to treat people differently because of their age, unless there is an objective justification.

It is likely that maintaining a cut-off point of 60 would constitute direct discrimination, since you are treating an employee less favourably on the grounds of age.

An objective justification is defined as: “A proportionate means of achieving a legitimate aim”. A legitimate aim might include economic factors such as business needs, efficiency and prohibitive costs.

Once a legitimate aim has been identified, you will need to assess the proportionality, ie, the discriminatory effect should be significantly outweighed by the importance and benefits of the legitimate aim and, in general, there should be no reasonable alternative to the action you are taking.

Unfortunately, the test of objective justification is not an easy one. It is likely that different treatment on the grounds of age will require an exceptionally good reason. Relevant factors will include the additional costs balanced against the size and profitability of
the business.

Government guidance suggests that although a wide variety of aims such as business needs and efficiency may be considered as legitimate, saving money because discrimination is cheaper than non-discrimination may well not be legitimate.

Alison Loveday, head of employment,
Berg Legal


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