The government, in drafting age discrimination equality legislation, decided that employers could legitimately refuse to provide insured benefits, like medical insurance, life cover, and salary protection, to the over 65s, creating substantial differentials in salary if you include perks, as well as leaving over 65s much more exposed to risk. Employers provide these benefits, but insure them with insurance companies, and the insurance companies charge substantial premiums for adding the over 65s to the policies. Hence the government agreeing to let employers simply withdraw the benefits. The beancounters, and employers who don’t really consider the human element in their workforce, might like it. Anecodtal evidence is suggesting that this discriminatory practice might become widespread.
Shoosmiths, the law firm, have recently suggested that there are a number of legal ambiguities and technicalities which might cause problems for employers. But even without these, I hope employers will think twice, and insurers might also rethink their pricing policies, in a more age-ambiguous world. I can think of three good reasons. One, why not at the very least offer the over 65s the option to cover the increase in the premium themselves? It may be expensive for them, but they might still prefer to be insured, as well as take advantage of any advantageous rates that an employer’s policy might offer, especially if the employer is large. Two, the risks probably increase with age from the age of 16, why is the premium generally smoothed for the 16 – 65s, and then a cliff edge for the over 65s? This seems like an ultra-harsh and quite unjustifiable form of age discrimination between say the age 64s and the age 66s. Perhaps a better idea of the actual underlying risks will lead to understanding that these are costs that should be shared across the workforce, especially as it becomes increasingly necessary, for reasons related to demography, economics and productivity, to encourage the retention of older workers in the workforce. It is after all a wage cost, and in the long run will surely simply play out in the balance between wages and perks. But third, surely the issue is, how do you judge the value of your employees? Are you saying that somehow, the older a worker is, the less critical she or he is to the productivity and profitability of the company? The gold standard of efficiency for a company must logically be that every worker helps the bottom line, whatever their pay grade or hierarchical status, and employee engagement with company objectives is key. If you value all your workers, then it becomes very important, for symbolic and ethical reasons, as well as retaining a happy, productive workforce not to discriminate between them in the way that you treat them.