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Private Medical Insurance (PMI) Collective

Firms that offer, or want to offer, PMI to their employees clearly want to do that on a cost effective basis. As you may already know, the concept of a healthcare trust fund is not a new one, and larger firms have been operating them very successfully for many years. More recently there has been significant growth in the number of firms establishing such trusts in order to contain costs and provide a flexible schedule of benefits.

Compared with traditional PMI schemes, there is potential for substantial cost savings due to purchasing arrangements, operational efficiencies and a more sensitive and personal approach to claims. Collective branding of a scheme also promotes greater member ownership.

The types of benefits to participating organisations of this collective procurement approach to PMI include:

  1. Significant potential for cost savings resulting from national agreements with hospitals and providers.
  2. Tax efficient. No Insurance Premium Tax (currently a 5% saving but will increase to a 6% from 4 January 2011 after changes made in the last budget) and the administration charge is VAT recoverable.
  3. Flexibility in the design of the schedule of benefits provides the Trustees with the opportunity to exercise their discretion to pay benefits outside of the scheme benefits and rules. This is something which cannot normally be considered with traditional PMI schemes.
  4. Greater opportunities to smooth the annual charge compared to traditional PMI schemes.

It is important to understand that although the Scheme is uninsured, (and therefore the trust is liable for the full cost of eligible claims), the inclusion of stop loss insurance protects the fund against claims exceeding the budgeted level.

Given the interest in a PMI Collective, Mutual One appointed the Private Health Partnership, an award-winning intermediary, to meet with interested firms to clarify aspects of the information they supplied and any additional information requirements.

For more details on the PMI Collective, please contact Jonathan Pepper, Operations Director at jonathan.pepper@mutual-one.co.uk or phone: 07966 865196.