Examples of this include groups that have foreign nationals, as without a GP they can not obtain the referral required for treatment on a medical insurance plan; companies involved in heavy labour, where an onsite nurse might want to fast track treatment by bypassing the employee’s GP; and independent hospitals, where staff may be able to self-refer.
Tucked away alongside its larger trust arrangements, Simplyhealth also has a significantly smaller group that fits this model. Hughes explains: “We have one trust arrangement with less than 100 members. They self-insure a scheme to pay for infertility treatment for members. This wouldn’t be covered on a medical insurance scheme.”
But it’s not simply a matter of finding the more unusual risks or requirements and slapping them into a self-funded arrangement. To make trusts work for smaller groups, careful attention has to be paid to the benefits schedules and scheme particulars.
“Carefully written benefits are important,” says Lawson. “I’d advocate restrictions on when dependants can join a scheme, as this can eliminate the risk of someone adding a family member just to get their treatment done privately.”
Other safeguards include excesses, to deter claims, and benefit caps, to reduce the risk of large claims wiping out the entire fund.
“If you put a financial limit on treatment it depersonalises it. It takes away the need for the employer to make a call on when someone’s cancer has becomes chronic and the company won’t fund treatment anymore,” adds Lawson.
A further safety mechanism that has been included on both the MCD and the Healix products is control around treatment. MCD uses its Treatment Sourcing Service to negotiate treatment prices and Healix uses a combination of specially negotiated prices with all of the hospital groups and a nurse-led claims management process. Both say this helps to drive down claims costs.
“In some cases we’ve made huge savings,” says Healix’s Saunders, pointing to an example where the cost of a claim was pushed down from £250,000 to just £40,000 after one of its nurses recommended different treatment.
“This helps to reduce the volatility that can be seen in smaller schemes,” he argues.
So, although the initial reaction to offering self-insurance to groups of as few as 100 members may be one of horror, the measured approach being taken can sometimes make it a viable and attractive proposition.