Many companies offer a range of health and wellbeing benefits to help foster a healthy, productive workforce. A Corporate Health Cash Plan is one of these.
But what exactly is it? How does it work? Is it different from Group Private Health Insurance? We’ve answered all these questions, and more, in this expert Health Cash Plan guide.
A Corporate Health Cash Plan helps employees with everyday healthcare costs. Think about your routine dental appointments and yearly eye tests. Services such as these are made more affordable with this Employee Benefit.
Also known as a Business Health Cash Plan or Group Health Cash Plan, it’s an affordable way to support your employees’ healthcare.
You can usually choose between different levels of cover. Which one you opt for will determine how much your staff can claim back after treatment.
Health benefits can provide peace of mind for both you and your employees. Company Cash Plans encourage workers to prioritise their wellbeing, preventing minor issues from escalating into problems that require sick leave. It also helps employees get back to work quicker if they do need time off.
Our 2023 Employee Benefits Benchmarking Survey found that Private Medical Insurance is one of the top 4 benefits that people want. But only 29% of UK businesses offer it 😦.
Not every business can afford to provide a Comprehensive Health Insurance scheme. And when you start adding on extras to the policy, the costs quickly add up.
But many companies do want to offer their staff help wherever they can, which is where Business Health Cash Plans take centre stage.
A Company Health Cash Plan is a policy that is paid for by you for your employees. Premiums are paid on a monthly or annual basis.
Through a Corporate Cash Plan, staff can claim back part of the costs of the treatment they’ve received, provided it’s included in the policy. This is normally up to a limit determined by the cover level and provider.
For example, let’s say your Health Cash Plan provides up to £200 worth of dental treatment per year. An employee who needs a £300 root canal procedure could get this done and claim £200 back against the plan (as long as they keep receipts). Alternatively, they could choose to put that £200 allowance towards their yearly routine dental checkups.
Claiming on a Company Health Cash Plan is pretty straightforward. It usually looks like this:
This is just a guideline, so it’s important to check the claims process with your specific provider.
Providing a Health Cash Plan is a great intermediary between no health cover at all and full Private Medical Insurance (PMI). And there are plenty of benefits for both you and your employees.
A Health Cash Plan is a more affordable employee benefit. Some cost as little as £5 per month, per employee. To compare, Group Health Insurance could cost a business with 50 workers £35 per month, per employee. Other benefits include:
Cost is a major factor in people delaying essential healthcare. By providing your team with a Business Health Cash Plan, you can help them to get the treatment they need, sooner. Other benefits include:
What a Company Health Plan covers will depend on the level of service you set up for your team. Most UK Health Cash Plan providers offer tiers of cover. These determine the monetary amount staff can claim back for eligible treatment.
In most cases, Company Health Cash Plans cover pre-existing conditions, so employees won’t need to undergo any medical background checks in order to enjoy this benefit.
Each provider will differ in terms of what they offer. But as an example, here’s what Medicash offers:
Treatment | Level 1 | Level 2 | Level 3 | Cashback (per year) |
|---|---|---|---|
Routine dental treatments | £60 | £120 | £180 |
Dental accident and injury | £200 | £400 | £600 |
Optical | £60 | £120 | £180 |
Diagnostic tests and scans | £200 | £400 | £600 |
Complementary therapies (e.g. physiotherapy) | £100 | £200 | £300 |
Alternative therapies (e.g. reflexology) | £100 | £200 | £300 |
Virtual GP and prescriptions | Free access | Free access | Free access |
Discounted gym memberships | Free access | Free access | Free access |
Health Cash Plans and Health Insurance policies are not the same. In fact, you can have both at the same time. Health Cash Plans work alongside the NHS, as there are certain types of healthcare, such as dentistry, which are not provided for free by the NHS.
It’s easy to confuse Company Health Cash Plans and Group Health Insurance, as both offer health benefits. Here are the main differences between them:
Let’s break it down in more detail:
Business Health Insurance | Corporate Health Cash Plan |
|---|---|
Covers medical treatment for acute conditions in private UK hospitals, letting staff skip NHS waiting lists | Pays for minor and regular medical expenses (e.g. dental and optical checkups, prescription fees, etc.) |
Usually covers the full cost of treatment for eligible conditions, minus policy excess | Cover limited per treatment (e.g. a fixed amount for dentistry) per policy year |
Covers private healthcare only | Can pay towards both private and NHS healthcare |
Insurers have private hospital lists and recommended specialists available | Staff choose the treatment and facility, providing the policy covers the type of treatment |
Most insurers help to organise treatment and the bill goes directly to them | Employees pay for treatment initially before the insurer reimburses them |
A Corporate Health Cash Plan can slot into your company’s Employee Benefits package as a happy medium between no health coverage and full cover.
So, you’ve got the healthcare side of things covered. What other benefits help to create a well-rounded package for your team?
In some cases, we’ve been able to help clients set up a Business Cash Plan alongside their Company Health Insurance.
It might seem like jumping through hoops using one benefit to support another. But Health Cash Plans can be used to cover an excess on a Medical Insurance policy. This can help to reduce the cost of PMI, which otherwise may not have been an affordable option for your company.
Business Health Cash Plans and Health Insurance policies are not the same. In fact, you can have both at the same time. Your employees can then use both services to supplement the NHS (as there are certain types of healthcare, such as dentistry, which are not readily available on the NHS).
Another good thing about Company Health Cash Plans is they often come with a variety of extra benefits that your employees can use, even when they’re not claiming for health treatment. These services can include:
When comparing Business Health Cash Plans, you’ll see the variety of benefits and options available to you. Each provider will have a benefit table detailing what treatments your employees are eligible to claim back costs for. Make sure to check what your chosen level of cover includes.
How much you’ll pay for a Corporate Health Cash Plan varies. It’s dependent on your business and employees. Even so, it’s a relatively affordable employee benefit. Some schemes charge as little as £1 a week for the most basic coverage.
The price of your Business Health Cash Plan will depend on:
While the age of your staff is a contributing factor, it’s not the most influential one. The price per employee is more dependent on how much cover you intend to offer them. This differs from Private Medical Insurance, which tends to consider age and health specifically.
To give you a rough idea of prices, we’ve provided two examples below for different clients wanting cover for their staff.
Charity | Agricultural Firm | Location |
|---|---|
Leicestershire | Isle of Wight | Number of Employees |
125 | 35 | Level of Cover |
Tier 1 | Tier 1 | Cost Per Employee | £5.15 per month | £5.96 per month |
As with most employee benefits, there’s always the question of tax. For Corporate Health Cash Plans, HMRC views them as a P11D / Benefit in Kind. Due to this, you, the employer, will have to pay National Insurance Contributions on the benefit.
The good news? By providing your workforce with a Business Health Cash Plan, you can offset the premiums against your company corporation tax. You’ll receive a lower tax bill. This is because HMRC views the costs as a tax-deductible business expense.
As it’s a P11D / Benefit in Kind, your employees are liable for additional tax. HMRC will reduce their annual allowance—the amount they can earn before tax—by the same amount as the premiums paid on their behalf.
For example, if your business pays £5 a month per employee, the employee will pay Income Tax on that £5 payment. For a basic taxpayer paying 20% Income Tax, the employee will pay £1 tax on the benefit.
Health Cash Plans can either be fully company-paid or paid for by the employee. Most of the time, we find our clients pay for the cover on behalf of their staff. The employer will set up the policy and level of cover for their workforce and pay for premiums.
Most providers will cover your employees, even if someone on the group plan has a pre-existing condition. But it’s always worth checking with the insurer you’re considering.
Should an employee have treatment that costs more than the allowance on the policy, they can still make a claim for their treatment. But they’ll only receive cashback up to the specified limit.
A Corporate Health Cash Plan is deemed to have a cash value. Any employees in receipt of cover will be liable to tax as a P11D benefit. To pay the tax, the employee’s tax code will be adjusted so that their personal allowance (the amount they can earn before paying tax) falls.
No, you’re not legally obliged to offer your employees any form of Health Insurance. However, our research shows that healthcare support is in the top 4 benefits that workers want from their employer. So it’s worth considering some form of cover if you want to attract and retain talent.
Here’s a list of all the mandatory employee benefits for UK businesses.
The best Company Health Cash Plan is the one that costs the least but offers the highest amount of coverage. But you also need to find a service that’s right for your business needs.
Here at Drewberry™, we’re an independent Employee Benefits consultancy. We’ve got exclusive access to all leading UK Health Cash Plan providers. These are the main insurers we work with:
Each provider is different, so it’s important to research your options when setting up a Health Cash Plan. Price is often a key factor for businesses, but it’s always good to check other elements, such as customer support and the claims process.
There’s a lot to think about when it comes to running a business. And sometimes that results in little time to think about your employee benefits package.
That’s where we come in. When you work with Drewberry, we take all the heavy lifting off your desk. Our team of expert advisers set up and manage everything on your behalf. Leaving you with more time to focus on what matters, and stay ahead of the competition.
Our team of experts live and breathe employee benefits, and they’re ready to chat about your unique needs. For fee-free advice and access to the most competitive products, give us a call on 02074425880 or email us at help@drewberry.co.uk.
We started Drewberry™ because we were tired of being treated like a number.
We all deserve a first class service when it comes to things as important as protecting our health and our finances. Below are just a few reasons why it makes sense to talk to us.