GRiD, the trade organisation for the Group Risk industry, has called for a National Insurance reduction for firms with Group Income Protection Schemes.
According a GRiD survey, 35% of businesses would actively support an opt-out of state disability provision for those with a Group Income Protection (GIP) policy in place.
In addition, when asked if a government incentive, such as an opt-out, would encourage them to look into providing GIP benefits for their employees, 50% agreed.
Katharine Moxham, spokesperson for GRiD said: "There's certainly a strong argument for a reduction in NI as an incentive for offering a GIP scheme. And given the amount that employers potentially save the State in this area, perhaps there is even a case to be made for increasing NI contributions for employers that do not offer a GIP scheme - after all their employees will make far greater use of the State provided ESA."
Currently national insurance from UK businesses makes a contribution towards the estimated £100 billion annual cost of working age ill health - they also provide a further £40 billion in long term sickness benefits over and above state provision.
Moxham added: "The survey suggests that employers are already looking beyond state funded benefits to meet the specific protection needs of their workforce.
"45% of our sample said they offered employees financial support over and above statutory sick pay. Moreover, 22% of those questioned protected themselves and their employees using a GIP policy. If properly harnessed, the opportunity for employers to provide employee protection geared to their workforce needs is phenomenal - and this can only be beneficial for the State."
