6 reasons to switch your health cover for a healthcare trust

One of the earliest decisions is whether to set up a standalone Health Trust or join a Master Trust arrangement, and it comes down to how involved you want to be.

A traditional Health Trust gives you ownership, which means you appoint trustees, set the deed and retain full governance responsibilities. That’s ideal if you want direct control over benefit design and governance. Alternatively, a Master Trust has a specialist administrator to act as trustee and take on the day to day governance and admin, leaving you to control your benefit choices. For many businesses, the Master Trust model delivers all the advantages of a trust but without the day-to-day governance and admin. 

One of the most powerful features of trusts is the freedom to design benefits that reflect your workforce, including age profile, working patterns and health priorities. But it’s vital to design benefits that align with regulatory guidance. Work with your advisers to ensure benefits are genuinely clinical and compliant, and don’t include non medical services that would sit outside the trust remit. They can help you structure benefits that are both equitable and fair, covering everything from mental health to gender dysphoria, for example.

Funding is the practical heart of any trust. Claims are paid from the trust fund you set up, so trustees (or the Master Trust operator) must ensure the fund is properly capitalised and managed. Administrators can only pay claims where funds are available; they can’t make up shortfalls.

Robust fund management means realistic projections, sensible drawdown schedules, and regular monitoring and contingency planning. It also means agreeing in advance how surpluses will be treated and how top up contributions will be triggered if claims exceed forecasts. Work with an administrator that truly partners with you, providing transparent monthly reporting, early-warning indicators and actuarial advice and guidance to keep the fund healthy.

Stop loss cover is an important risk management tool. It helps protect the trust from two main scenarios: a very large claim for an individual member, and unusually high aggregate scheme costs within a single year. There are two common types of stop loss:

1. Specific stop loss (SSL): protects against the cost of an individual claimant exceeding a set threshold in a contract year — for example, £50,000 per claimant per year.
2. General stop loss (GSL): protects against the overall claims cost of the trust exceeding a set threshold for the year — commonly around 115–150% of expected annual claims.

Stop loss gives you certainty around maximum liability, but it’s important remember the premium for stop loss is an insurance cost and will attract Insurance Premium Tax. Work with your administrator and insurer to choose the right attachment points for your risk appetite and budget.

A trust is a legal structure and it must be established and run properly. That means a clear trust deed, a membership handbook setting out benefit rules, trustee appointments, and a separate trust bank account. Trustees have fiduciary duties, and the trust must be run with appropriate legal, tax and actuarial oversight.

If you’re operating a Health Trust, be prepared for trustee responsibilities and regulatory requirements. If you prefer a lighter governance burden, a Master Trust can shift much of that responsibility to an experienced administrator while still giving you design control. Either way, make sure roles, decision rights and reporting lines are clear up front.

Finally, take a strategic view. Medical inflation and new treatments (especially high-cost drugs and advanced therapies) are real drivers of future spend. Think about five year scenarios for funding and whether you’ll use employee contributions, adjust benefits, or rely on stop loss cover to manage volatility.

Trusts can deliver savings and flexibility, but they need active oversight and regular review. Your administrator should provide trend analysis, benchmarking and recommendations to help you keep the scheme sustainable as medical costs and employee needs evolve.