P for Permanent Health Insurance

Louise Harrison writes:

Introduction

Employers often offer Permanent Health Insurance (‘PHI’) as a benefit. PHI can give rise to problems where contractual documents do not properly delineate the extent and the limitations of PHI cover.

Two important lessons for employers are highlighted below.


1. Ensure that the Employment Contract does not describe a wider provision of benefits than that which the insurer will cover.

It is essential that the PHI policy be described accurately in the employment contract itself and in any handbook or ancillary documentation incorporated into the contract. Failure to do so may expose an employer to liability for which it is not insured.

In the UK case -