Optical benefits can be valued by staff and employers have a number of options that they can offer to their workforce above and beyond their legal obligations, says Tom Washington
If you read nothing else, read this…
- Employers are required by law to cover the cost of an eye test and glasses that are required specifically for VDU use.
- Since the introduction of the Corporate Manslaughter and Corporate Homicide Act 2007, employers can be held accountable for fatal accidents involving drivers, including those caused by poor eyesight.
- Employers can offer optical benefits in several ways, including eyecare vouchers, healthcare cash plans, and laser eye treatment through voluntary or flexible benefits plans.
- Eyecare vouchers are tax free as they do not constitute a benefit-in-kind. They are also are free of national insurance contributions for employers and staff.
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Eyecare may not be at the top of most employees’ benefits wish list, but forking out for eye tests and glasses is a financial burden many staff could do without. From the employer’s perspective, offering optical benefits goes some way towards helping improve overall health and wellbeing in the workplace, and also ensures they meet the necessary duty-of-care requirements, especially when it comes to business drivers and regular users of visual display units (VDUs).
Since the Heath and Safety (Display Screen Equipment) Regulations were introduced in 1992, employers have been required by law to cover the cost of an eye test for staff that use VDUs if they request it, as well as optical equipment such as spectacles that are required specifically for VDU use. They must also pay for future eye examinations at regular intervals recommended by an optician.
However, according to Specsavers’ Eyecare policies research published in November 2008, many employers are not fulfilling their obligations. The survey showed 81% of employers fail to meet the regulations by making only a contribution to the cost of eyecare. This may have resulted from a lack of understanding of the legislation by both employees and employers.
But ignorance is no excuse. Since the Corporate Manslaughter and Corporate Homicide Act 2007 came into effect in April last year, employers have been much more accountable for employees’ health and wellbeing. This includes company car drivers, and should a fatal road accident occur because of an employee’s poor eyesight, the business could be prosecuted. Employers are becoming conscious of the need to take proactive steps to ensure their business drivers are safer at the wheel by paying for regular checkups at the optician.
One way for employers to meet their legal obligations is by offering vouchers redeemable for eye tests and glasses. Vouchers are straightforward and cost-effective, have a tangible value and allow staff to choose the eyecare they require. Vouchers do not constitute a benefit-in-kind for VDU users, so are exempt from tax and free of national insurance contributions (NICs) for employers and staff. Jim Lythgow, director of strategic alliances at Specsavers Corporate Eyecare, says: “In our clients’ experience, tax offices do not view vouchers as a benefit-in-kind because they are all below £50 in value. But employers should check with their local tax office for clarity regarding the purpose of the voucher for the employee.”
Top-up vouchers can be offered for staff who want to buy more expensive glasses that they choose to fund themselves. “A pre-paid voucher scheme also ensures costs are managed accurately by preventing the purchase of products and services that are over and above the minimum legislative requirements,” adds Lythgow.
Another popular method of covering employees’ optical needs is through a healthcare cash plan. These offer refunds on optical treatment, and if the perk is offered as a voluntary benefit, there is little cost to the employer. James Glover, corporate director at Simplyhealth, says providing optical benefits in this manner is simple, but effective. “Healthcare cash plans are easy to use. The employee sends their receipt [from the optician] along with their claim form to the provider. This money is usually back in their account within two working days of receipt.”
If employers want to offer something extra, laser eye surgery can be included in a voluntary or flexible benefits package. This does not cost an employer any more, and facilitates often-expensive treatment either funded through employees’ flex allowance or from their own funds.
But Mark Carman, marketing and communications director at Motivano, says this trend is yet to take off. “We offer laser surgery through voluntary benefits schemes and some of the same suppliers are keen to offer the service via flex,” he says. “However, despite some clients showing an interest in this offering, no one has yet committed to offering it to employees through flex. A key reason for this, according to the employers that are considering it, is the associated liability they may be exposed to in the highly unlikely situation of complications resulting from the operation.”