HEALTH INSURANCE BIK ERROR

Rob Thomas

Hi,

I have an issue with my employer in respect of BIK on health insurance.

I am paid weekly but basically noticed in Apr this year, when it started, that the BIK amount each week was ridiculously high - €103 a week on an annual premium of €2400. I had not been on the insurance before so it was the first time I had experience of BIK with them.

It took 8-10 weeks and a lot of queries to get an explanation out of them- long story short, the policy renewal for the company had been the previous Sept and I had been added then along with other new joiners. They had forgot to set up the BIK so had decided to set it over the remaining 40 weeks. They didn't tell me when I was added to the policy and when it all came out the payroll contact said that the HR manager was supposed to take me aside in Feb to explain it but didn't bother. So they just implemented it hoping i wouldn't query it.

Anyway fast forward to Sept 19 and I got back to them to make sure it would go back to the normal level and was assured it would. However it stayed high but not quite the same level.

I got on to them again and after a bit of back and forth they admitted that I had actually been added to the policy a year earlier than they originally admitted and they had missed nearly two years BIK. I had no idea I had the insurance, luckily didn't need it and technically I didn't qualify when they added me as I was not working there for a full year but it seems they included me anyway. I got a statement from the health company since to confirm I was on cover for that year.

So I'm stuck paying it €90 a week for the rest of this year and I'm really annoyed at them. It's bad enough they kept fobbing me off but it's worse that rather than sorting it out in Feb this year they pulled a figure of 103 a week out of God knows where and deducted that knowing full well it would not have paid off the balance before the premium renewal. I don't even know if they notified revenue of the error.

I'm not looking to avoid the liability, I'll pay it gladly, but does anyone else think this is a crap way they dealt with me. It's a mid sized company with over 200 employees so I just expected better. It just seems dishonest.

Views appreciated, thanks

Turkish1

Rob Thomas wrote: »

Hi,

I have an issue with my employer in respect of BIK on health insurance.

I am paid weekly but basically noticed in Apr this year, when it started, that the BIK amount each week was ridiculously high - €103 a week on an annual premium of €2400. I had not been on the insurance before so it was the first time I had experience of BIK with them.

It took 8-10 weeks and a lot of queries to get an explanation out of them- long story short, the policy renewal for the company had been the previous Sept and I had been added then along with other new joiners. They had forgot to set up the BIK so had decided to set it over the remaining 40 weeks. They didn't tell me when I was added to the policy and when it all came out the payroll contact said that the HR manager was supposed to take me aside in Feb to explain it but didn't bother. So they just implemented it hoping i wouldn't query it.

Anyway fast forward to Sept 19 and I got back to them to make sure it would go back to the normal level and was assured it would. However it stayed high but not quite the same level.

I got on to them again and after a bit of back and forth they admitted that I had actually been added to the policy a year earlier than they originally admitted and they had missed nearly two years BIK. I had no idea I had the insurance, luckily didn't need it and technically I didn't qualify when they added me as I was not working there for a full year but it seems they included me anyway. I got a statement from the health company since to confirm I was on cover for that year.

So I'm stuck paying it €90 a week for the rest of this year and I'm really annoyed at them. It's bad enough they kept fobbing me off but it's worse that rather than sorting it out in Feb this year they pulled a figure of 103 a week out of God knows where and deducted that knowing full well it would not have paid off the balance before the premium renewal. I don't even know if they notified revenue of the error.

I'm not looking to avoid the liability, I'll pay it gladly, but does anyone else think this is a crap way they dealt with me. It's a mid sized company with over 200 employees so I just expected better. It just seems dishonest.

Views appreciated, thanks

Not quite following to be honest. If your annual premium is €2,400 and you are paid weekly your BIKable pay would be €46.15 (assuming a 52 week year) and therefore only cost you c. €24 a week (if on the higher tax rate) or c. €15 (if on lower rate).

Are you saying that the company are now backdating the BIK and deducting it every month as a catch up on top of your normal premium? i.e. you are getting a double charge each month for a year?

Did the insurer not contact you to issue you T&C's and policy documents?

You would surely had to sign some documents agreeing to the T&C's and a form with the company to opt in also etc...

Rob Thomas

Turkish1 wrote: »

Not quite following to be honest. If your annual premium is €2,400 and you are paid weekly your BIKable pay would be €46.15 (assuming a 52 week year) and therefore only cost you c. €24 a week (if on the higher tax rate) or c. €15 (if on lower rate).

Are you saying that the company are now backdating the BIK and deducting it every month as a catch up on top of your normal premium? i.e. you are getting a double charge each month for a year?

Did the insurer not contact you to issue you T&C's and policy documents?

You would surely had to sign some documents agreeing to the T&C's and a form with the company to opt in also etc...

Yes they are backdating it. They did for the period since Feb this year. And now they admit it will continue to Sept this year as well as me paying the current BIK.



I signed up for the health insurance when I started, but you cant be joined into the scheme until you are a year working there and you have to wait for the overall company annual renewal. I was a year there in Aug 2018 and I understood the renewal was January so I would be added in Jan 2019.



But it turned out the renewal was Sept and they added me in Sept 17 just after I joined. I had worked there for a few months the year before so they waived the wait period it seems. Nice of them, but I wasnt told. So I never missed the BIK not being paid.



I expected it to start in Jan 19, it started at the start of Feb and I queried the level of it then because it was €103 a week. It took 2 months for them to admit the issue.



The health insurance company say they did send policy docs end Sept 2017 to me, honestly I dont remember getting them and cant find them now but they have since issued me a statement to confirm I was on cover from Sept 17.



So I paid tax on €103 a week BIK since Feb thinking I was going to be over it by now and now they tell me I will be paying €80 a week until this Sept now to sort it out.



I dont even know if this is ok - surely they were obliged to collect it all from me when they noticed it. Its not their call to decide how long it takes to repay Revenue and surely it cant go on for 20 months.

Turkish1

Rob Thomas wrote: »

Yes they are backdating it. They did for the period since Feb this year. And now they admit it will continue to Sept this year as well as me paying the current BIK.



I signed up for the health insurance when I started, but you cant be joined into the scheme until you are a year working there and you have to wait for the overall company annual renewal. I was a year there in Aug 2018 and I understood the renewal was January so I would be added in Jan 2019.



But it turned out the renewal was Sept and they added me in Sept 17 just after I joined. I had worked there for a few months the year before so they waived the wait period it seems. Nice of them, but I wasnt told. So I never missed the BIK not being paid.



I expected it to start in Jan 19, it started at the start of Feb and I queried the level of it then because it was €103 a week. It took 2 months for them to admit the issue.



The health insurance company say they did send policy docs end Sept 2017 to me, honestly I dont remember getting them and cant find them now but they have since issued me a statement to confirm I was on cover from Sept 17.



So I paid tax on €103 a week BIK since Feb thinking I was going to be over it by now and now they tell me I will be paying €80 a week until this Sept now to sort it out.



I dont even know if this is ok - surely they were obliged to collect it all from me when they noticed it. Its not their call to decide how long it takes to repay Revenue and surely it cant go on for 20 months.

A very unusual set of circumstances. Honestly, instances like this (not exact same but company error with payroll over extended period) and the company have covered the expense i.e. if it was €2,400 BIK they missed they would gross that up to include the tax to c. €4,800 and pay the tax across.

Unfortunately I'm not sure of the specific requirements but with PAYE modernisation I would be surprised that they are doing this over such a long period - I assume they think they are doing you a favour by spreading it out and not processing it all though in a short period leaving you with little/no net pay for a couple weeks.

Sorry can't be of more help

Rob Thomas

Turkish1 wrote: »

A very unusual set of circumstances. Honestly, instances like this (not exact same but company error with payroll over extended period) and the company have covered the expense i.e. if it was €2,400 BIK they missed they would gross that up to include the tax to c. €4,800 and pay the tax across.

Unfortunately I'm not sure of the specific requirements but with PAYE modernisation I would be surprised that they are doing this over such a long period - I assume they think they are doing you a favour by spreading it out and not processing it all though in a short period leaving you with little/no net pay for a couple weeks.

Sorry can't be of more help

I appreciate your input and look, I know now whats due and Im happy to pay it. Im just annoyed they told me it was only for one year and now they admit it was for 2 years. It really seemed like someone was hiding a mistake. They were not at all upfront about it - they only came clean when my accountant (rental income) pushed them for their figures.



Anyway , thanks again

salonfire

Have you claimed BIK Tax Relief?

daheff

So company policy is that you only can join after a years service?

In the period where you thought you were not insured by the company, did you have your own private insurance?

If you did, I'd be pointing this out to them and tell them that you cant be insured twice for the same risk... and as they provided insurance without telling you (and against company policy) they can take the hit not you.

If you weren't privately insured I'd be looking for proof from the insurance company.... tell them you need it for risk equalisation & tax rebate purposes. They'll either provide or not.

Rob Thomas

salonfire wrote: »

Have you claimed BIK Tax Relief?

I have claimed the relief alright. Thanks

Rob Thomas

daheff wrote: »

So company policy is that you only can join after a years service?

In the period where you thought you were not insured by the company, did you have your own private insurance?

If you did, I'd be pointing this out to them and tell them that you cant be insured twice for the same risk... and as they provided insurance without telling you (and against company policy) they can take the hit not you.

If you weren't privately insured I'd be looking for proof from the insurance company.... tell them you need it for risk equalisation & tax rebate purposes. They'll either provide or not.

I didn't have alternative cover. The health company have sent me a statement since to confirm I was on cover the first year. Luckily I didn't need the cover that year.

Thanks