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Healthcare trusts for smaller employers

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Businesses and organisations with only 100 employees can now receive the full benefits of a healthcare trust fund following the launch of Health Link, a new scheme developed by Medical Care Direct Ltd (MCD). The scheme offers comprehensive third party administration, MCD’s unique treatment sourcing service and stop loss insurance as one fixed price package.

 

Jan Lawson of MCD says, “This is an alternative to standard corporate healthcare provision and offers a significant potential saving to the employer. Health Link originated through a desire to meet the needs of clients with unusual risk profiles that made arranging standard private medical insurance difficult and costly to arrange. Although a healthcare trust is not suitable for every organisation, they should at least be considered by employers.”

 

Healthcare trusts can offer employers savings of up to 20% per annum when compared with the costs of other corporate healthcare schemes such as PMI. Advantages of a healthcare trust were only really available previously to those employers with over 1000 members because of the cost and complexity of their set up process.

 

Health Link is a new approach to corporate healthcare and provides schemes to suit particular needs of employers and employees - for example sports clubs with their own in-house physiotherapists are unlikely to require a physiotherapy benefit.

 

Healthcare trusts are tax efficient for employers – no Insurance Premium Tax and the administration charge VAT is recoverable. And if costs are controlled future contributions can be reduced resulting in lower benefit in kind taxation for employees.

 

MCD provides all the administration services and through its treatment sourcing service can obtain highly competitive package prices and has access to all 450 UK private hospitals and NHS private patient units, over 20,000 consultants in all major specialities and to a network of over 350 MRI scanners.

 

Stop loss insurance is available to those employers who wish to put a cap on their trust’s liability should treatment costs exceed the trust fund. Conversely, if claims costs are less, then surpluses are retained in the scheme to offset future costs.

 

All Health Link scheme literature is styled to the employer’s own brand making it personal for the employee to encourage a more responsible approach to the use of benefits.

 

How healthcare trusts work: Having determined what level of benefits are required and normally following discussion with the fund administrator, the company makes contributions into a ring fenced fund which is held under trust. The monies are held in an interest bearing account to be used solely for the treatment of eligible employees in line with the predefined healthcare benefits schedule. Legally two trustees need to be appointed to oversee the fund and these can be in house or provided by MCD.

Private medical insurance news: 26 January 2011