Avoid paying high premiums to an insurer, especially during periods where there are few to no claims on the policy you’re paying for.
Healthcare trusts
Provide private healthcare and wellbeing coverage to your employees through a flexible, tax efficient trust that puts you in control of how you deliver health benefits.
Get a healthcare trust quote
If you have any questions about healthcare trusts or want help comparing the market options, our independent advisors are on hand to help. We’ll learn more about your reasons for setting up a healthcare trust and aim to help you find the best solution.
0800 970 1618
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What are healthcare trusts?
Healthcare trusts are used by larger organisations to offer private healthcare and wellbeing benefits to their employees. They’re often set up as an alternative to a business health insurance policy, as they can offer much of the same coverage, but with added flexibility for the business.
Companies setting up a healthcare trust may be involved in the decisions behind what’s covered and, therefore, the types of benefits offered to their employees. This means that rather than purchasing a policy with set rules, benefits and exclusions, they may be able to tailor the trust around their wants and needs.
How do healthcare trusts work?
There are several ways to structure a healthcare trust, and the process your company may follow when setting up a trust and managing the day to day operations may vary. The following steps detail what you may experience:
01
The company creates a trust that they’ll pay funds in to. This fund can be used for private medical services for the trust's beneficiaries, usually the business's employees.
02
Trust rules are established and published in a handbook or similar documentation. These rules describe how the fund should be used.
03
Trustees are appointed to run and manage the healthcare trust, ensuring that any guidelines and rules are followed, such as who’s covered and what treatments can be paid for from the trust funds.
04
An administrator is appointed and responsible for managing the day to day operations of the trust, such as managing claims, overseeing expenditures and other administrative duties.
05
The company will pay an amount into the trust to cover the costs of private medical services and administrative duties. How much this amounts to depends on what was agreed upon, but there may be flexibility over how often and how much is paid in.
06
When a beneficiary accesses private medical services, the trust will cover the related expenses as long as the claim was within the rules of the trust when it was established.
Are healthcare trusts different to business health insurance?
Healthcare trusts are an alternative to private medical insurance, and although there are differences between them, we would not recommend that any business needs both schemes in place. Healthcare trusts may only be available to larger businesses, which means that some companies will have to opt for business medical insurance to provide this type of coverage to their employees. We’ve highlighted some of the key differences between them below.
Business health insurance
Healthcare trusts
You’ll pay for the policy regardless of whether any claims are made, meaning there may be periods where you’re paying without benefitting from the cover.
If you pay into the trust and no claims are made, the monies will remain in the fund to be used for future expenses.
The provider will set the rules of the policy, such as what treatments are covered, what’s excluded and where you can receive private medical services.
You have flexibility over what’s covered by the trust, meaning you can set your own rules around the types of services and treatments you’ll cover.
The provider handles the policy management and claims, so you’ll need to liaise with them directly when claiming on the policy.
Healthcare trusts
Any claims will go through the trust and the appointed representatives, which may be a quicker process than claiming through third party providers.
Business health insurance may incur additional taxation, namely Insurance Premium Tax (IPT).
Healthcare trusts are not classified as insurance policies and, therefore, may not incur related taxes such as Insurance Premium Tax.
It may not be possible to adjust, amend or update your business health insurance policy after agreeing to terms with the provider.
You may have more flexibility to adjust, amend and update the rules of the trust as the needs of your company change.
V
How are healthcare trusts taxed?
Healthcare trusts may be a more tax efficient option compared to other similar cover options, which means your company will have more monies to deposit into the trust or commit to other employee benefits. We would welcome you to contact us to discuss tax implications in more detail, as it’s a complex topic that depends on many factors, but some examples of how tax may be treated are as follows:
Insurance premium tax
Corporation tax
VAT
Inheritance tax
What are the benefits of healthcare trusts?
Any surplus payments into your healthcare trust will remain for future claims rather than being paid directly to an insurer.
You may be able to deduct the cost of running the trust from pre tax profits.
You have more flexibility over the range of cover included for your employees rather than choosing a policy with set benefits and exclusions.
Providing private health and wellbeing services demonstrates to your employees that you’re a conscious employer who meets its duty to its workforce.
Offering this type of cover may provide financial flexibility to your staff, as they may not need personal coverage if they’re included as a beneficiary.
How much will a healthcare trust cost you?
Healthcare trusts are different to policies, and instead of paying a premium, you will contribute monies to the trust on a regular basis. How much you’ll need to pay into the trust will vary depending on many factors, such as the following:
1.
How many claims you expect to receive
2.
The number of named beneficiaries
3.
The administrative charges
4.
The types of health and wellbeing services covered
5.
Whether beneficiaries families are included in the cover
6.
Hospitals and facilities included in the cover
Stop loss insurance
Your trust may provide you with annual estimations on the cost to run the trust, which you can use to guide how much to pay in. However, in cases where the trust runs out of funds and payments are due, you may be able to protect your trust through the following stop loss insurance options:
General stop loss
Specific stop loss
Compare health trust options
We can work with your business with the aim to find the best healthcare trust scheme that meets your company's and employees’ needs. This is a free service we offer, and you’re under no obligation to utilise our expertise when setting up your trust. If you’d like our help with comparing your options, provide us with some contact information, and we’ll be in touch.
0800 970 1618
Thank you! Your submission has been received!
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What our advisors have to say about healthcare trusts
“If a company is large enough that a healthcare trust makes sense, they offer a much more flexible way to provide private health and wellbeing benefits to its employees”
Premier choice group
Occupational health service FAQs
Do I need business health insurance as well as a healthcare trust?
What happens if the trust runs out of funds?
Are healthcare trusts complicated to set up?
Why choose Premier Choice Group?
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