Latest increase in IPT makes corporate healthcare trusts even more attractive to employers


The UK Chancellor’s announcement in his Autumn Statement last week that Insurance Premium Tax (IPT) will increase to 12% in June means that IPT will have doubled in just two years, further increasing the cost of corporate health insurance policies to employers.

Healthcare trusts are a tax-efficient alternative to traditional private medical insurance as they do not attract IPT in the same way. They are a recognised means by which employers can self-fund their corporate healthcare provision and offer many advantages over traditional health insurance schemes.

In addition to their tax-efficiency, healthcare trusts allow greater flexibility in scheme design with benefits tailored to suit the employer’s requirements and different levels of cover possible for different groups of employees if required.

Another big advantage is that 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 Stop Loss Insurance so any risk can be mitigated. 

Nurse case managers

One of the biggest advantages to employers can arise where healthcare trust claims are managed by nurse case managers rather than 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.

It may also be possible to incorporate other health related benefits such as cash plan and dental benefits within the healthcare trust and to arrange for nurse case managers to act as a central hub co-ordinating provision with other overlapping services such as an EAP or Income Protection, directing employees to the most appropriate benefit. This can ensure a fully integrated healthcare provision and the most effective use of an employer’s overall healthcare budget. 

The flexibility and bespoke nature of a healthcare trust also allows for better long term planning and future proofing of healthcare spend.

There are other significant advantages too as the cost to the employer of providing benefits via a healthcare trust is generally lower than providing the same benefits via an insurance policy and the P11d benefits can also be lower for the employees.

As Insurance Premium Tax increases, more and more employers are likely to seek alternative healthcare propositions such as healthcare trusts.

This article was provided by Healix Health Services.

 

 


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