A new breed of rehabilitation only group risk products is likely to be born if the results of the Sickness Absence Review are followed through, Legal & General has said.
The health and protection insurance industry has welcomed the findings but some concerns were raised about how state benefit claimants could be provided early access to treatment programmes.
Health insurer Axa PPP was particularly supportive of the decision to offer tax relief to employers providing private medical insurance (PMI) to basic rate tax payers.
It said the report included some ‘bold, constructive recommendations' which if introduced, ‘should significantly improve sickness absence management in Britain'.
James Freeston, sales and marketing director at Axa PPP's added: "Our initial impressions are positive and the authors' recommendations, if taken forward, should encourage and enable employers to play a bigger role in managing employees' health and wellbeing.
"Naturally we welcome their proposals for tax relief for targeted employer-funded vocational rehabilitation of ill or injured basic-rate-taxpayer employees."
Freeston also approved the recommendation that employer-funded psychological support services should not be taxed as a benefit in kind.
Many of these sentiments and were echoed by group risk specialists, including Diane Buckley, managing director of group protection at Legal & General.
Buckley also thought one likely effect of the report and the proposed tax reliefs would be a proliferation of rehabilitation only group risk products.
"A rehabilitation only product would be first step for those employers who don't have any income protection (IP) cover at all," she said.
"You could see that when they then go to the next stage they would potentially offer voluntary cover for employees.
"My concern is with the Independent Assessment Service which will add a lot of value but is so dependent on access to NHS services once the needs are identified.
"We know within 24 to 48 hrs of that we have access to those services, but there is more to understand about how the IAS model is going to have its recommendations prioritised to get swift treatment, because that's vital if we're going to have any hope of getting people back to workplace," she added.
Katharine Moxham, spokesperson for Grid, also welcomed the report's recognition of the importance of early intervention programmes and what the insurance sector could produce.
"Early intervention is one key reason why the group risk industry is more successful than the State in managing a return to work," she said.
"Bringing State and private systems of support into line makes ultimate sense, and would better enable potential incentive programmes for ‘nudging' employers to make more adequate provision for their workforce."
This point was identified by John Ritchie, CEO of Ellipse, who said its soon to be released group income protection product would include an absence management service promoting early intervention along the report's lines.
"It is incredibly important that the government is starting to work with employers to make sure fewer people find themselves requiring ongoing state or private support," said Ritchie.
"Involving a third party early on means that each individual case can be assessed independently and the most appropriate advice provided as soon as possible by qualified professionals.
"In these tough economic times, reducing absence time makes sense not just from an employer's perspective, but also from an employee's, as it allows alternative work to be found if necessary.
"Of course, the risk remains that employers continue to view these sorts of processes as time consuming and burdensome, so we support every effort made to incentivise them and raise awareness of their importance," he added.
