Health & Social Care Levy - FAQ's
National insurance contributions for most employees and employers will increase by 1.25 percentage points across the UK from April 2022, with the projected £12bn annual income to be ringfenced to pay for health and social care.
From 1 April 2022, there will be a temporary 1.25 percentage point increase in class 1 (employee) national insurance contributions (NIC) paid by employees, as well as a 1.25 percentage point increase in class 1 secondary NIC paid by employers.
From April 2023, these increases will be legislated separately as a “health and social care levy” (HSCL) and NIC rates will return to 2021/22 levels. The levy will be hypothecated in law, meaning that the revenues will be ringfenced for health and social care. From that date, the legislation will also extend the revenue-raising measure to individuals over state pension age in employment or self-employment, who are currently exempt from paying NIC.
A: From 6 April 2023 the HSCL will be automatically included for schemes where we are insuring Employer NIC.
A: Where the scheme is costed in terms of salary there will be no change to the premium whilst the transitional enhanced Employer NIC are in effect.
Where the scheme is costed in terms of benefit, we will not retest the rate, however, the benefit roll will increase, resulting in an increased premium.
A: Any changes in respect of the insured employer NIC will be considered at the rate review on or after 6 April 2022; or in the case of a trigger event, on or after 6 April 2022, as per the policy terms and conditions - for example, a change in the benefit basis.
At this time we have no plans to offer cover for employer NIC without the HSCL element post 6 April 2023. However, if you are interested in this option, please let us know at the earliest opportunity.
A: N/A as our portfolio is entirely costed on a Unit Rated basis.
Claims in payment
A(1): For benefits already in payment - pre 6 April 2022 - any future changes in NIC will not be taken into consideration.
A(2): Where the ‘date first absent’ falls on or after 6 April 2022 but before 6 April 2023, benefit payments will reflect the enhanced level of NIC at the commencement of benefit payment, and will not reduce as a result of any future reduction in NIC.
A(3): Where the ‘date first absent’ falls on or after 6 April 2023, benefit payments will reflect the insured level of cover, which will include the HSCL element where we were previously insuring Employer NIC.
Any other considerations
A: At this time, due to the foreseen limited demand, we do not intend to offer an option of insuring Employer NIC without the HSCL element being insured automatically from 6 April 2023.
NIC and Health and Social Care Levy rates
If you would like to discuss any of the above in relation to a specific Scheme or set of circumstances, please contact our Business Development team via email email@example.com