Dean and Hurst launch Halcyon Trustees as first consultancy for healthcare trusts

Elliott Hurst

Halcyon Trustees is launching as the first consultancy dedicated to supporting corporate healthcare trusts.

The organisation is led by managing director John Dean and consulting director Elliott Hurst who together have more than 60 years’ experience in senior leadership roles in the UK healthcare benefits sector.

The pair said the firm’s overriding objective was to improve governance standards and beneficiary outcomes for employers and the membership they protect, particularly given the heightened awareness and demands on employer healthcare offerings.

The consultancy’s offering will include trustee services, sitting on health trust boards and assuming legal responsibility where appropriate, and providing training and other consulting support.

Independent trustees are common in the corporate pensions sector but are very rare in corporate healthcare arrangements.

Dean told Health & Protection that he believed this launch could be a trigger for employers to start acting similarly to their pension arrangements and outsourcing responsibility and liability.

“If people become trustees of a corporate healthcare trust they are legally liable under the trustee act,” he said.

“Even when it’s done as a company, if something goes wrong they can all individually be sued. So I believe firms may use us as sole trustees instead.”

 

Mis-selling and governance standards

The consultants believe stricter oversight is required in the healthcare area citing concerns around potential mis-selling and governance standards.

They noted that healthcare trusts have sometimes been sold as medical insurance without the tax, “which is simply wrong”.

“For example, in a healthcare trust, trustees have responsibilities in respect of governance, documentation and rate setting,” the firm said.

“In addition, trustees are responsible for handling beneficiary complaints known as trustee referrals. These are all services provided by insurers within traditional insurance products which are now the responsibility of trustees.”

They also noted that many staff in the sector have very limited understanding of trusts, trust law and what good trust governance look like.

And the firm is aiming to improve standards as it warned that while healthcare trusts do not have the level of regulation of pension benefits, any potential thematic review from the regulator could impose much stricter rules than present.

 

Eye-opening experience of poor governance

Hurst (pictured) noted that the role and scope of healthcare benefits employers offer was perhaps of greater significance than at any time in recent history and operating plans within strong governance frameworks was therefore vital.

He highlighted several risks, issues and concerns that were discovered across the sector during pre-launch research.

“It has been quite an eye-opening experience for us both to see that so many arrangements in place have such poor governance and risk management standards,” Hurst continued.

“These poor standards could reflect badly on both the employer and the trustees, and, ultimately, may well detract from the benefits that employers offer to their people.”

Hurst noted these poor practices included:

 

Dean concluded: “We have observed the evolution and development of the pension market and improvements in governance and member engagement following the Maxwell and Mirror Group Pension Scheme scandal.

“We feel the unregulated healthcare trust marketplace should focus on improving governance standards now to protect beneficiaries and employers before we see any movement by authorities to impose a costly regulatory framework on this marketplace.”

 

 

 

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