PMI salesmen devise plan to fight tax rises
By Robin Stride
The professional body that helps bring insured patient business to consultants’ doors has hit back at Government plans to hoist insurance premium tax by a shock 58% from November.
According to the Association of Medical Insurers and Intermediaries (AMII), the Budget’s ‘unrealistic and unacceptable’ rise (Independent Practitioner Today, July-August) will represent the final straw for some customers who will now cancel their cover.
It has produced a four-point plan (see below) to help companies who buy private medical insurance for their employees to limit the damage and reduce costs ahead of the tax rise from 6% to 9.5%.
AMII chairman Stuart Scullion said: ‘While I think many of us expected there to be an increase, we are both surprised and disappointed at the size and scale of such an increase, which appears to have been announced without due consideration of the wider impact.’
He claimed the Chancellor and his department had shown a distinct lack of consideration about the wider impact of the ‘ill-conceived’ decision.
Mr Scullion said cost was one of the single biggest considerations for both employers and consumers as to whether they continued with private medical insurance cover.
It was the single biggest factor in his own business as to why they had cancelled their policies.
Mr Sculllion, managing director of PHP, said tax relief on premiums for subscribers who were either aged over 60 or retired would have been a better way to stimulate demand and release the pressure on the NHS.
He told Independent Practitioner Today: ‘The Government should be encouraging subscribers to private medical insurance as a means of releasing some of the current pressures being felt throughout all sectors of the NHS.’
Fighting talk – what the AMII advises
- If your renewal date is prior to the 1 November and you currently pay monthly, consider switching to annual payment. This will save the 3.5% insurance premium tax uplift and could provide a further saving of between 4-5% as a result of the monthly payment premium.
- If you are considering introducing private medical insurance as a new staff benefit – do it before the 1 November 2015 and pay annually. This will delay the impact of the increase until November 2016.
- Consider introducing or increasing a policy excess. £100 excess applied to all plan members would typically reduce premiums by between 8-10%. These are estimates not specific to any provider.
- Company schemes with more than 100 staff covered should consider a non-insured/self-funded option under a health care trust which does not attract the tax.