What is a common reason for employers to choose health trusts?

Employers often choose health trusts primarily to gain tax benefits. By setting up a health trust, companies can contribute to the funding of employee health plans in a way that may provide substantial tax advantages. Contributions made by employers into health trusts can be tax-deductible, which helps reduce the overall taxable income of the business. This makes it a financially strategic option for businesses looking to manage their health benefit expenses while also taking advantage of potential tax savings.

The structure of a health trust allows employers to pool resources with others to provide a broader range of healthcare services, often leading to lower overall costs per employee as risks are shared. Moreover, these trusts can help employers comply with regulations while still maintaining control over the benefits offered to employees.