The new Corporate Excess option offers companies a new way of funding Optimum PMI, with the opportunity to benefit from cost efficiencies previously only available to larger schemes through a Healthcare Trust option.
Companies choosing the new option will have a Corporate Excess set on the policy, from which employee claims are paid. The excess is generally around 80% of the predicted claims fund and is held in trust by Aviva. A claims reserve is calculated on the remaining claim fund which will be used to pay claims if the excess is used in full.
The significant advantage to companies of funding employees’ healthcare cover through this option is that the Corporate Excess amount does not attract insurance premium tax (IPT). Instead, companies only pay IPT on the claims reserve, (typically 20% of the claim fund), plus administration and insurance risk charges1.
Nick Reynolds, head of PMI, Aviva, UK Health, said: “We’re pleased that with the introduction of the new Corporate Excess option on our Optimum PMI scheme, a wider range of employers can benefit from the same cost efficiencies that our larger corporate healthcare customers enjoy.
“We know from our corporate customers that they place a high value on providing health cover for employees, but with economic challenges they increasingly require flexibility in how their scheme is funded, as well as the level of cover offered. The new Corporate Excess funding option has been introduced to help many more companies control their health insurance costs.”
HMRC have confirmed that employee taxes are charged on the average annual cost of the product per employee, where the corporate excess is held in trust and is not refundable.
Companies with over 250 employees taking out Optimum PMI cover can choose tailored health benefit packages and now have four different funding options: fully insured, cost plus, corporate excess or healthcare trust.