Many employers are discovering the advantages of choosing a healthcare trust instead of private medical insurance
With an increasing number of employers turning to corporate healthcare trusts as a flexible and cost-effective way of providing healthcare benefits for their staff, you may be wondering what the advantages are and how they could benefit your business.
A recognised alternative to traditional private medical insurance, healthcare trusts are a means by which employers can self-fund their corporate healthcare provision. Funds are held in trust and managed by trustees, with ‘claims’ managed by a company specialising in healthcare benefit administration.
Often mistakenly thought of as being complicated because of the words ‘trust’ and ‘trustees’, they need be no more difficult to set up than a traditional private medical insurance scheme and while originally considered the preserve of large employers, they can actually be beneficial to any employer with annual healthcare claims in excess of £250,000.
Healthcare trusts offer many advantages over traditional PMI:
1. Greater flexibility
The benefits can be tailored to suit the employer’s requirements and different levels of cover can be accommodated for different groups of staff. Crucially, employers are not restricted to an off-the-shelf product or constrained by terms imposed by an insurer.
2. Future proofing of healthcare spend
The flexibility and bespoke nature of a healthcare trust allows for better long-term planning and future proofing of healthcare spend. A healthcare trust managed by an independent healthcare claims administrator differs from an insurance-based service offering in that the focus is on the employer’s exact requirements. It enables employers to carve a sustainable health budget that puts them in control rather than being a small fish in a large pond.
3. Superior service with nurse case managers
It is important to select a healthcare trust administrator that employs nurse case managers rather than just insurance claims administrators. Their medical expertise and empathy with the claimant not only provides a much more reassuring experience for employees which reflects well upon the employer, but also ensures that the correct care pathway is followed and medical costs are correctly managed.
4. Fully integrated healthcare provision
In addition to private medical benefits, it is also possible to incorporate other health related benefits such as cash plan and dental benefits within the healthcare trust. Administrators with nurse case managers can also act as a central hub co-ordinating provision with other overlapping services such as an employee assistance programme or income protection. This can ensure fully integrated healthcare provision and the most effective use of an employer’s overall healthcare budget.
5. Lower costs
Nurse case management can ensure that the most appropriate care pathway is taken and that there are no unnecessary treatment costs. If required by the employer, it is also possible, where appropriate, to navigate cases for certain treatments to NHS Centres of Excellence, leading to further cost savings while supporting the employee throughout their treatment.
6. The employer only funds the benefits used
The employer retains funds when claims are lower than anticipated rather than an insurer taking extra profit. The employer can elect to be protected from claims exceeding their budget through the use of specialist insurance arranged by the trust administrator so any risk can be mitigated.
7. Lower P11D rates
The P11D rates for employees also tend to be lower where benefits are provided through a healthcare trust.
8. Tax efficient
With insurance premium tax (IPT) increasing to 12% in June 2017 and many predicting that it will continue to rise, healthcare trusts have become even more attractive as they do not attract IPT in the same way as PMI and can offer significant savings.
Healthcare benefits are highly prized by staff while providing employers with the means to care for the health and wellbeing of their workforce and minimise time off work due to ill health. With a healthcare trust, employers are able to tailor their corporate healthcare scheme to their specific requirements and with appropriate analysis from a knowledgeable provider, ensure that their scheme is sustainable into the future.