Many employers will provide permanent health insurance in the form of long term disability cover or more generally as a sickness and accident benefit. Such insurance usually gives the employee an amount of their salary over a given period of time if they suffer from a long term illness and cannot return to work.
In order to ensure that an employer has no contractual liability to provide payments if the insurer refuses or is unable to pay, employers should expressly include a statement within their contract that the benefit is provided in accordance with the terms of any insurer’s policy that is in force It is also helpful if the employer includes a clause giving them the right to change insurers, vary the entitlement or to discontinue the scheme altogether.
Any exemptions such as the ending of the benefit if the employee leaves employment should also be brought to the attention of the employee. Employers should ensure that employees are instructed to read and understand the policy.
On rare occasions, employers may have a contractual liability towards the employee depending upon what was (or was not) outlined in the documents provided to the employee.
As an alternative, some employers choose to give a monetary amount to their employees to enable them to purchase their own permanent health insurance cover.