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Removal of FBT key to improved wellness in the workplace

August 31, 2015

Removal of FBT key to improved wellness in the workplace

Passing the Affordable Healthcare Bill so that fringe benefit tax is removed from health insurance would greatly improve wellness in the workplace, the Health Funds Association (HFANZ) said today.

Southern Cross Health Society and Business NZ released a joint nationwide study of 113 employers today which found New Zealand lost 6.7 million working days to absence in 2014, up from 6.1 million in 2012. The second Wellness in the Workplace Survey found the average number of annual absentee days per employee was 4.7, amounting to a national cost of $1.4 billion in 2014, up from an average of 4.5 days in 2013 and at an additional cost of $200 million. The most common causes of absence were illness or injury unrelated to the workplace, caring for a family member or dependant, and attending or waiting for a medical appointment.

HFANZ acting chief executive Chris Pentecost said the removal of FBT on health insurance proposed in the bill, which was drawn out of the member’s ballot earlier this month, would encourage more employers to offer health insurance as part of salary packages. Currently only about a third of New Zealand businesses offered health insurance to their employees.

“The Wellness survey found that if FBT on employer-subsidised health insurance was removed, 56 percent of New Zealand businesses not currently providing it would look to do so. That would mean sick employees could be seen more promptly and be treated and back to work much sooner,” he said.

“We estimate employers already provide some kind of support for about 600,000 insured people — some 300,000 employees and a similar number of family members. If FBT was removed, as many as a further 250,000 people – employees plus immediate family members – could be covered by private health insurance. Those employers will reap the benefits of having a much healthier workforce.”

Prime Minister John Key told the Hutt Valley Chamber of Commerce last week that he supported the idea of removing FBT from health insurance. Mr Pentecost said that high level of support was encouraging, and he hoped other politicians would also back the bill when it received its first reading in the House in October.

Scrapping FBT on workplace health plans would align it with insurance under the ACC scheme, for which employer premiums are FBT exempt.

Mr Pentecost said the estimated annual cost of the proposal was around $50 million, but that would be offset by productivity gains, savings and improved access in the public health sector.


A full copy of the member’s bill is available here:

The full Wellness in the Workplace 2015 survey can be found at:

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