What will the increase in IPT mean to companies?

I have heard that the Insurance Premium Tax will be increased. How will this affect employers???

It will, of course, affect the companies who pay for their employees' private health insurance. The increase will be from 5% to 6% (basic) and 17.5% to 20% (higher rate), so you could just imagine how much more the companies will be paying for this benefit.

Ugh, higher taxes would turn off more companies from providing health insurance to their staff

Yes, I agree with you. Not only that, this will not be reclaimable like VAT is. Our company usually budgets for premium costs increases (around 9%, the standard I think is around 7-8%) But still that is not enough to cover for this round of increases!

We just had a meeting about this, and we have agreed to drop insurance coverage. Instead, we are looking at medical benefit trusts. Since this would be exempted from the increase.

Hmmm... that's a good idea. But how is a medical benefit trust exempted from the IPT???

Well, it is a trust-based benefit so while it does primarily the same thing as health insurance, it is not seen as insurance per se. As such, there is no IPT on it.

We are reviewing our arrangements too. Medical benefit trusts could be one of the options.