Goodbye to fringe benefits
Business needs to take a bigger approach to health, writes Peter Tynan, chief executive of Southern Cross Health Society.
The Affordable Healthcare Bill didn’t pass its first reading in Parliament last week. While much has been made about the parent category migrant aspect of the bill, at Southern Cross Health Society we are more interested in the removal of fringe benefit tax (FBT) on health insurance.
New Zealand businesses should be interested in this aspect as well.
Businesses have a vested interest in the health of their staff. Healthy workers are good for business – it’s as simple as that.
We’re often told that the main barrier for businesses to provide health insurance for their employees is cost. This is backed up by stats from the 2015 Wellness in the Workplace survey – 56 per cent of businesses said they would consider offering health insurance if FBT was removed, and 34 per cent said they would look to subsidise further.
Figures from a National Party electorate office advised the removal of FBT from subsidised health insurance would cost the Government over $40m in lost revenue.
However, as a country with an ageing workforce and population, we need to take a big picture approach to health.
For example, we calculate that annual FBT paid per employee on a fully subsidised surgical plan is $355. We also know the annual amount claimed by these employees is $773 – providing a net economic benefit in terms of the healthcare provided versus the tax revenue forgone.
We also know that providing insurance through employers has a positive health impact on the broadest cross-section of the New Zealand population – as the insured workforce currently comprises 53 per cent white-collar and 46 per cent blue-collar (1 per cent use other services).
With more employees using health insurance, space on public waiting lists would be freed up for those without. It means all Kiwis would get treated sooner. It would help conditions to be treated before they become debilitating, requiring extra time off work, expensive pharmaceuticals and even carers.
Research by TNS in August showed that on average the number of days from diagnosis to surgery for those with health insurance is 41. Those without health insurance wait on average 93 days. Research showed that those having elective surgery with health insurance take on average six days off work, those without – 10 days. For businesses, it means employees get back to work faster – meaning enhanced productivity. For workers, it’s a benefit that positively impacts income and quality of life for them and their families.
Despite the Affordable Healthcare Bill not getting past the first reading, how we look after the growing healthcare needs of New Zealanders is a debate we need to have.
Anything that assists with the fiscal problem facing healthcare, reduces waiting lists, promotes good health and quality of life, and helps business productivity seems like a no-brainer.
Which is why we’re going to keep talking about how much sense it makes to stop viewing better access to healthcare as a fringe benefit. It’s something that’s good for everyone.