Dispelling five key myths around healthcare trusts
Healthcare trusts are a recognised alternative to traditional corporate PMI schemes and operate in an almost identical manner. The difference is that with a healthcare trust a business can set the benefit rules, providing a high level of control on costs as well as ensuring employees are appropriately covered.
This level of control has made them increasingly popular amongst businesses looking for more effective ways of continuing to provide healthcare benefits for their employees.
The advantages of a healthcare trust include:
- Real savings over the cost of corporate PMI premiums (typically 10%)
- The employer keeps the money if claims are lower than anticipated, rather than an insurer taking extra profit
- The employer sets the rules and decides when they want the fund to pay out
- Superior ‘managed care’ and effective claims administration
- Bespoke administration services
However, there are a number of misconceptions surrounding healthcare trusts which may be deterring some companies from giving this option fair consideration.
Myth No. 1 – A healthcare trust is not easy to set up
Probably the greatest misconception is that setting up a healthcare trust is expensive for the employer; it is complicated and takes a long time to set up.
The reality is very different. A reputable trust provider will not charge for the set-up of the trust – although there will be an administration fee on the first anniversary of the Trust set up and this should only be in the region of £3-£5,000. And a reputable provider should also have all the systems and processes in place to make setting up a Trust quick and simple.
Myth No. 2 – There’s no control
What employers also seem to fear is that the control over the healthcare trust – and the costs associated with it – will be in the hands of the provider. This should simply not be the case. The employer can set the parameters for cover with capped exposure, rather than be bound by standard insurance criteria.
Myth No. 3 – There’s no guarantee over quality of medical care
Many employers fear that employees may not get the same level of healthcare as would be provided under a PMI scheme; that there may be delays in them receiving treatment; and that the focus will all be on cost rather than care.
Working with a reputable healthcare trust provider, who can demonstrate that medical care is at its foundations, should provide the peace of mind to an employer that the right decisions are going to be swiftly made about treatment and care for employees. Certainly financial considerations should be taken into account but absolutely not at the detriment of quality or speed of care.
Myth No. 4 – There’s a dependence on the NHS
Many employers fear that by moving away from PMI their employees will lose access to private medical care. But what they should really be thinking about is where employees will get the best care and in the most timely manner.
The quality of the services available through NHS Centres of Excellence should not be under-estimated and selective use of these centres as part of trust management offers employees a way to access the most appropriate care as quickly as they could through the private sector whilst ensuring that the fund is capitalised at the right level.
Working with a provider who offers a nurse-led claims platform will give an employer the confidence that care will be provided on the basis of where the most appropriate treatment is available, within an acceptable timescale.
This, coupled with personalised case management, should mean that employees will be dealt with professionally and as individuals at all times.
Indeed a singular dependence on private healthcare networks is counterproductive to active cost management.
Myth No. 5 – It’s hard to quantify the financial benefits
Of course, the FD will want to know the true cost benefits of a healthcare trust and these are easy to identify.
We typically see savings of around 10% over corporate PMI premiums as trusts are more tax efficient, with the employer keeping any surplus monies if claims are lower than forecast, rather than an insurer taking extra profit.
The flexibility of a healthcare trust, allowing the employer to set the rules and decide what they want the fund to pay out for and when, is also a key benefit for businesses, with bespoke administration services tailored to suit the organisation. Plus, a 100% stop-loss facility can protect a business from any financial exposure.
Richard Saunders is sales director at Healix Health Services.
This article was provided by Healix Health Services.
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