Treasury hesitant over tax breaks for undervalued health benefits

It noted that many businesses did not know, and in some cases even care, about the impact of healthcare benefits on their workforce.

Centre for workforce effectiveness at the Work Foundation director Professor Stephen Bevan told Cigna's Work, health and performance debate, that this was likely to have a significant effect on HMT's preference for introducing tax breaks.

"My concern and I think the concern of HMT, is they don't believe there is a not a big deadweight effect in providing tax incentives and other incentives for this market," he said.

"And that's why I think they are reluctant to do something about it and we need a debate and more evidence about the potential incentive effects of tax concessions for these sorts of products.

"At the moment I don't see very much and I think that's why the Treasury is reluctant to go there," he added.

Prof Bevan explained that from many of his observations, employers were not taking healthcare benefits seriously and only introduced them to look good.

"I hear what some organisations are doing and think ‘what you're doing to promote wellbeing in your workforce is primarily about the benefits system'," he said.

"As a suite of staff benefits many of these things can be really helpful, but I meet too many employers who when you ask ‘what impact do those activities have on actual health of workforce?' they don't know.

"And for some, probably a minority but a significant minority, I don't think they care," he added.

Prof. Bevan continued by describing what businesses needed to do to maximise the effectiveness of healthcare benefits and raise the possibility of tax breaks being introduced.

"I think there's an issue about differentiating insurance and other products like that which are benefits, and workplace health interventions which are actually designed to improve health and wellbeing in the workforce.

"Now obviously what we want is overlap between those two as far as possible."