In yesterday's Emergency Budget, Chancellor George Osborne added 1% to insurance premium tax, with effect from 4th January next year. This will add even higher costs for employers offering PMI or health cash plans to their staff. Healix believes a healthcare trust could offer a viable alternative - keeping employer costs under control and providing much greater flexibility.
"The 1% increase in IPT - to 6% - is probably not as bad as some in the insurance industry expected" said Steve Hook, Sales & Marketing Director, Healix. "But for employers providing PMI to a large workforce this increase, combined with other budget measures, adds significantly to their operating costs. Indeed, even for smaller businesses it will have a serious impact on their costs and, unlike VAT, it cannot be reclaimed. That's why we believe organisations should take a closer look at healthcare trusts."
As a trust-based benefit is not classified as insurance, IPT is not applicable to the funds placed in trust and, therefore, immediately an employer can achieve savings. However, Healix firmly believe healthcare trusts provide a number of other advantages over and above PMI schemes.
The advantages of a Healix Healthcare Trust include significant savings - typically 10% - over the cost of corporate PMI premiums, with the business keeping any monies if claims are lower than anticipated, rather than an insurer taking extra profit. The flexibility of a Healthcare Trust, allowing the employer to set the rules and decide when they want the fund to pay out, is also a key benefit for corporates, with bespoke administration services tailored to suit the organisation.
But the superior 'managed care' and claims administration provided by Healix is, Steve Hook believes, another key reason why employers should look at a healthcare trust as an alternative to PMI or health cash plans.
"Our significant history in the medical and healthcare sector, combined with our dedicated team of nurses that provide the frontline case management for every member of a healthcare trust, means we have a genuine medical understanding of the healthcare needs of individuals. We are therefore able to give organisations a very specialised and expert service, whilst keeping a very tight control on costs.
We think the increase in IPT provides a very strong argument for employers of all sizes to review their healthcare arrangements for employees."