Richard Saunders, sales director at Healix Health Services Ltd, explains why healthcare trusts are a cost-friendly alternative to PMI
WHY A HEALTHCARE TRUST?
Last November’s increase in Insurance Premium Tax (IPT) means that almost 10% of healthcare insurance premiums are now tax – and as corporate healthcare is one of the largest benefit spends of most employers, this is generating a considerable amount of interest in healthcare trusts which are a tax-efficient alternative to traditional insurance schemes.
Set up long before IPT was introduced, corporate healthcare trusts are a recognised vehicle for employers to fund their corporate health & wellbeing provision and as they are not insurance, they do not attract IPT. Whilst there may be an element of Stop Loss insurance to protect the employer from claims exceeding the fund, the amount of IPT this attracts is considerably less.
Furthermore, with a healthcare trust, the employer will retain any savings in low claim years instead of an insurer taking extra profit. These savings can be retained to reduce future contributions to the trust fund and smooth out high and low claims years, or used to pay for additional health and wellbeing benefits.
So the employer can focus on what benefits they are paying for, while for employees it means lower P11d rates. Budgets for health and wellbeing are increasing as employers are seeing the advantages of getting their employees back to work and having a healthier workforce. A healthcare trust can become an efficient and fully integrated part of their health and wellbeing approach.
MISCONCEPTIONS AND MYTHS
Despite all these economic positives, there are nonetheless many myths around corporate healthcare trusts for the industry to break down:
- Healthcare trusts are not just for big organisations, they are appropriate for SMEs too. Typically they are suitable for employers with a PMI premium of £250k+ a year.
- Healthcare trusts are not difficult to set up. The employer does not have to appoint trustees if they use a company like Healix who have a Master Trust that the employer can join, with independent professional trustees already appointed. All the paperwork is already prepared and it is a very simple matter for an employer to join.
- It is not difficult for an employer to leave a Master Trust if they wish to in later years. Some claim that an employer would be tied in and it would be difficult to unravel. Not true.
- It does not have to cost a fortune in legal expenses. The cost can be in the region of £30k if an employer sets up their own trust but if they join a Master Trust with Healix, any legal costs will be absorbed by Healix with a minimal annual trust fee.
FITTING THE NEED
With a healthcare trust, flexibility in scheme design allows the benefits to be tailored to the needs of the employer rather than them having to take an off-the-shelf package.
You could include screening, for example, or have different levels of benefits for different employees. Some employers choose to place the majority of the benefit into concentrating on the most significant causes of absence: musculoskeletal, physiotherapy and psychiatric benefits.
The tailoring to different employee groups is the beauty of a trust – it really is that bespoke. Companies are starting to ask what they need and what they want to pay for.
Healix adopts a nurse-led approach to claims management so has the clinical expertise to ensure that an employer’s overall health and wellbeing budget is used to optimum effect by integrating all services provided by the employer. We ensure that the most appropriate service is used, as well as making sure that appropriate treatment and care-pathways are followed, that employees have a more caring and empathetic claims experience, and that costs are carefully managed.
Meanwhile for employees, the complexities of having numerous separate health services and providers are removed. Healix’s healthcare trust is the hub through which all their healthcare can be navigated.
And knowing that their employer is paying the cost of medical treatment to help them, employees feel more cared for. The result? A far more positive and engaged workforce.