45 Product reviews
Medical Care Direct Health Link
Established in 2000,Medical Care Direct (MCD) is based in Farnham, Surrey. Part of the Skipton Group, it provides healthcare trusts and a package of services aimed at the self-pay health market. Trustee services are provided through fellow Skipton Group company, Pearson Jones plc.
PRODUCT
Stop-loss insurance is available and, if claims costs are below expectations, any surplus is kept within the trust, so reducing future funding costs. Any excess costs can be covered by stop-loss insurance.
INTERNATIONAL PMI
RATING PROS
✔ A healthcare trust for SMEs, with consequent cost savings
✔ MCD is an experienced specialist player that is part of a much bigger group too
✔ Benefits can be tailored to meet needs and budgets
SELECT THIS PRODUCT FOR... Firms wanting PMI-style cover for a minimum of 100 employees who want to reduce costs or have a scheme tailored to their specific requirements.
GROUPRISK rating: 8 out of 10 April 2011
www.hi-mag.com HealthInsurance ✔ CONS
✘ Healthcare trusts are not the same as PMI and may not be suitable for all employers
✘ Not available to firms with less than 100 employees
✘ Employers cannot blame a PMI insurer if a claim is not paid or other problems arise
✘
MCD’s Health Link is a healthcare trust fund for firms with as few as 100 employees. Previously such schemes have tended to be the province of 1,000+ schemes, due largely to the cost and complexity of setting them up and running them. The MCD scheme includes comprehensive third party administration, MCD’s Treatment Sourcing Service, a form of managed care, and stop-loss insurance in one fixed price package. Schemes are individually tailored to meet an employer’s requirements. MCD then uses its Treatment Sourcing Service to find the optimal treatment package for the patient, often securing the advantage of fixed price treatment. Such arrangements can avoid the claims overcosts that can arise if complications in the treatment occur.
R LITERATURE A
Bespoke literature is provided, styled to the employer’s own brand.
WHAT THEY SAY
Jan Lawson, chairman of MCD, said: “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, which made arranging standard PMI difficult and costly to arrange.
As an example of tailoring, MCD cites the example of a sports club with its own physiotherapists, which would then be unlikely to need a physiotherapy benefit built in. MCD says that healthcare trusts can offer employers savings of up to 20% a year when compared
to private medical insurance. Partly that is because, except for any stop loss premiums, payments into the scheme do not attract insurance premium tax (IPT). As IPT went up from 5% to 6% on 4 January this year that is a worthwhile saving in itself. Also, the VAT payable on the administration charge is recoverable. Lower costs overall mean a lower P11D benefit to employees, with consequent income tax savings to them too.
“Although a healthcare trust is not suitable for every organisation, they should at least be considered by employers and their insurance advisers alongside other options in the decision making process.”
WHAT WE SAY "Healthcare trusts have grown in popularity over many years and have the advantage of avoiding the new, higher, 6% IPT. But they can do much more than that – for example, if claims are less than the trust fund, the surplus is simply retained and reduces future costs. The main downside is that healthcare
CONTACT 0833 848 1460
WEBSITE
www.medicalcaredirect.co.uk
Andy Couchman FCII Cert PFS, technical editor, Health Insurance
trusts have often proved too expensive and complex for smaller businesses to set up and run. This plan avoids that and so should open up healthcare trusts to even more firms. But the solution is not suitable for every employer. That said, it is worth considering, albeit only for mid-sized and above employers."
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