Budgeting for UK Employee Healthcare Costs
We anticipate that the significant increase in insurance premium tax that was announced in the 2016 Autumn Statement will encourage many more employers to explore corporate healthcare trusts. IPT will increase from 10% to 12% from June 2017, having been as low as 6% just over a year ago. This will apply to employee health insurance policies as it does to all other UK insurance products. Corporate healthcare trusts are a way of providing healthcare benefits to employees other than through insurance. Instead of paying premiums to an insurer, the employer pays cash into a trust for the benefit of its employees. The trustees then pay for medical treatment or reimburse employees for medical expenses incurred. As insurance based arrangements become more costly, the alternative of corporate healthcare trusts becomes increasingly attractive and will start to feature more and more on the FD’s wish-list!