What an employer scheme or medical trust does

Written by Stuart Hendy. Reviewed by Muhammad Junaid.

Published 15 September 2026. Last reviewed 15 September 2026. Next review due 15 March 2027.

What it does

• Provides cover to employees, and sometimes their families, under scheme rules rather than an individual policy.
• In an insured scheme, an insurer carries the risk; in a trust, the employer funds claims and an administrator processes them.
• Sets its own eligibility, joining and leaving rules.
• Usually offers medical history disregarded terms on joining, which individual cover rarely matches.

How it is paid

• By the employer, sometimes with an employee contribution.
• Cover is normally a taxable benefit in kind for the employee.
• Trust arrangements pay an administration fee rather than a full insurance premium.

What it is regulated to do

• An insured scheme is a regulated insurance contract.
• A trust is not an insurance contract, so Financial Ombudsman Service access can differ — ask before you need it.
• Scheme rules, not a personal policy, decide what you get.

Anyone arranging or advising on insurance in the UK must be authorised by the Financial Conduct Authority or be an appointed representative of a firm that is, and you can check any firm or individual free of charge on the Financial Services Register. ^[1] The conduct rules that apply to insurance sit in the FCA’s insurance sourcebook. ^[2]

What protects you

• Ask the administrator how complaints are handled and who the final decision-maker is.
• Leaving the employer normally ends the cover; continuation terms must be arranged, often within a short window.
• Medical history disregarded terms are usually lost when you move to individual cover.

The Financial Ombudsman Service resolves complaints about regulated firms free of charge, ^[3] and the Financial Services Compensation Scheme can pay compensation where an authorised firm cannot. ^[4] Care regulators publish inspection reports for private hospitals as well as NHS ones, ^[5] and the medical register shows whether a doctor holds a licence to practise. ^[8]

Questions worth asking

1. Is this scheme insured or trust-based?
2. What happens to my cover if I leave, and how long do I have to act?
3. Are pre-existing conditions covered under the scheme rules?
4. Who decides a disputed claim, and can I take it to the Ombudsman?

Free and impartial guidance on any of this is available from MoneyHelper. ^[9] Private hospital and consultant performance and fee information is published by PHIN under the Competition and Markets Authority’s order. ^{[6] [7]}