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Employers need ‘deep pockets’ as many plan to self-fund health perks

by Claire Churchard
19/02/2025
UK, healthcare, employees, workplace benefits, research, Junior doctors
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Almost a third of employers plan to increase self-funding for health and wellbeing benefits, prompting warnings from Grid that employers considering this approach will “need deep pockets”. 

A survey from the group risk industry body found that 31 percent of employers plan to boost investment in employee benefits in the next 12 months. A similar proportion (29 percent) said they are looking at increasing investment in directly-funded employee support. But Grid warned that this approach is risky, likening it to rolling a dice on workforce health.

Self-funding gives an employer greater control over the financial investment in their employees’ financial, physical, mental or social benefits. However, it also means they take on all the risk of benefits payments rather than transferring it to a provider.  

Commenting on directly-funded support, Grid said it is difficult to predict how many employees will need health and wellbeing support, for how long, or how much it will cost. This approach could also constitute an unintended p11d taxable benefit for employees. “Employers who take this approach are therefore left unable to properly budget or offer consistency to staff,” Grid stated.

The industry body urged employers not to risk the health and wellbeing of staff, stressing that employee benefits offer much better value than self-funding. 

Katharine Moxham, spokesperson for Grid, said: “Employers should not be lulled into a false sense of security if they happen to have a healthier-than-usual workforce in any particular year. This model is not sustainable as at some point the reverse may well be true, and those employers who choose to fund support directly will need extremely deep pockets.”

The survey also found that 34 percent of employers plan to boost communication on benefits to improve engagement and use, 33 percent expect to make more use of apps and online access to offer staff access to perks, and 32 percent said they were boosting communication to employees. 

A significant proportion (29 percent) said they are making their benefits available to more of their workforce and 28 percent said they are extending them to include employees’ family members.  

Moxham said: “It’s good to see that investment in employee benefits is being bolstered this year despite some challenging financial conditions for businesses. Particularly pleasing is the continued investment to support more of the workforce which may include supporting family members as well, but employers need to take heed that helping staff by funding support on a case-by-case basis is speculative at best and a costly gamble at worst.”

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