HOW A TRUST WORKS

A Healthcare Scheme operated under a Trust is a most efficient and cost effective way of operating an employee benefits or group affinity type arrangement. As you are probably aware Trust law is an ancient way of protecting beneficiaries from the interference of outside influences, and in modern day aspects many Trusts are used to protect Life policies in the event of death from becoming part of the deceased’s estate.

A Healthcare Trust has the benefit also of tax efficiency as Insurance Premium Tax is not applicable to it and it also has the added advantage of not falling under the FSA Regulation criteria. The theory of it works in a similar way to an occupational pension scheme, in that the costs are kept off the balance sheet. Or in the case of the Company, it would mean that the group members would pay into a collection Account and then through into a Trust account to provide a claims fund in order to Pay for the member’s treatment. The beauty of this arrangement is that the Trust Account is topped up on an impress basis so that any unused claims fund Contributions can be rolled over the following year thereby helping to level out Contributions and retaining them for the benefit of both members and the Company as well.

The documentation required to set up a Healthcare Trust can be quite daunting and complicated, but as part of the Corporate Trust Care Management package, we offer the use of a copyright Trust Deed which has been drawn up by one of the country’s leading firms of lawyers. In addition, we also provide a service level agreement which sets out what is expected from each party to running the Trust, i.e. the sponsoring Company and Corporate Trust Care Management Ltd.