Business Health Insurance is a valuable part of any good employee benefits package. It provides employees with access to private healthcare for acute conditions allowing them to bypass NHS waiting lists and receive treatment quickly when they need it most.
However, the cost of cover can go up year-on-year thanks to a variety of factors, with the most significant being all of the cutting-edge medical breakthroughs made available through Private Health Insurance that you may not be entitled to on the NHS.
Thankfully, there are certain things that businesses can do to reduce the cost of their policy to ensure it remains affordable but still continues to offer employees Private Health Insurance when they need it the most.
The cost of a Company Health Insurance will depend on a variety of factors that you may not always have control over, such as the average age of the group you are looking to insure or where your employees and your business are located.
Below are 6 ways in which you can manage the cost of your policy, making it more affordable to provide your employees with private medical treatment when they need it most.
A Health Insurance excess is the amount individuals covered by a Health Insurance policy pay towards the initial cost of their treatment.
When employees covered by the scheme undergo their treatment, they pay the first initial amount (the excess) and the insurer will take care of the main part of the bill.
Some insurers have a standard excess that is included automatically with the policy, but you will also find that many providers will give you a range of options to choose from that either increase or decrease the policy’s excess.
Increasing the policy’s excess means that employees will cover more of the costs of their treatments, reducing the insurer’s upfront bill per treatment or per policy year, depending on how your excess works. As a consequence, premiums can be reduced considerably if a higher excess is chosen.
While it might be tempting to ramp up the excess to cut the cost of premiums, employers should think carefully about the kind of excess their employees would be able to afford.
Some companies look to set up a Corporate Health Cash Plan that runs alongside their Company Medical Insurance which, among other things, could be used to pay the excess for any treatment rather than having the employee paying it themselves.
Nadeem Farid
Head of Employee Benefits Advice at Drewberry
Almost all of the top UK health insurance providers will offer a range of optional add-ons to enhance the policy.
The options available will depend mostly on your provider and the size of the group you are looking to insure, but there are a few popular options that you will often find with group policies:
While all of these options can be very useful and can enhance the cover, adding them to your policy will increase your premiums. Some of these add-ons may be highly valued by your employees while others may not get used at all, so it is worth keeping a check on how much they are costing you and how much value they are adding.
Group Health Insurance provides cover for 3 different types of core treatment:
All Health Insurance policies will cover inpatient and usually day-patient treatment as standard. However, outpatient treatment is generally an optional extra you have to pay an additional premium for.
You can opt not to add outpatient cover, add limited outpatient cover (say up to £1,000 per person per policy year or a fixed number of sessions per year), or add full outpatient cover.
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The more outpatient treatment you include in your policy the higher your premiums. This is one of the largest factors when determining the overall cost of your company scheme.
Removing outpatient cover from a group policy or choosing to limit the amount of cover employees get can significantly reduce their premiums.
However, the risk of eliminating or reducing outpatient cover is that employees may have to rely on the NHS for diagnostic tests, lengthening their wait for treatment and prolonging any time off work with a painful health condition.
With most Business Health Insurance policies you are given a standard list of private hospitals and facilities that employees can use for their private treatments. However, many insurers will give businesses several different lists to choose from that will either expand on this list or reduce it.
For companies based in central London such an extensive list gives employees more options when it comes to choosing hospitals that are closer to home; however, adding these hospitals to the covered list can increase premiums considerably.
Although reducing your hospital list will in turn reduce your premiums it will also limit your employees’ access to where they can receive treatment when they need to use the cover.
It’s important to check that they’ll still be able to receive a variety of treatment within a reasonable distance to travel.
An optional add-on to most company health insurance policies is a 6 week NHS wait option.
This clause will limit your employees’ ability to claim on their policy unless the inpatient treatment they need has a waiting list of more than 6 weeks on the NHS.
If the wait for inpatient treatment is longer than 6 weeks, employees can use their Business Medical Insurance to receive their treatment.
The benefit of this clause is that, regardless of whether they use the NHS or seek private treatment, employees will always receive their care within a maximum of 6 weeks. As this clause reduces the need to claim on private health insurance it can significantly reduce the cost to your business.
The 6 week NHS wait only applies to inpatient care (that which requires a hospital bed). If you opt to include outpatient care on your policy (e.g. diagnostic tests / scans that don’t need a hospital bed), you’ll be able to receive outpatient care privately as soon as it’s available.
Joseph Toft
Health & Wellbeing Expert at Drewberry
One of the biggest mistakes to make is becoming complacent with your existing policy. Even if you initially purchase a Group Health Insurance policy at a competitive price, there is no guarantee that your premiums will be as competitive the following year.
Because of this, it is important that you regularly review your policy and go to market to see what other insurers are willing to offer. Doing so means that you can make a switch to a new provider at the right time if there is a more suitable or competitive product for you and your business.
We help companies review their existing arrangements every day and it is scary how many simply have not had the time or the support to keep on top of their current policy.
We work with our clients to review the whole market every year and make sure they are always getting the best deal. If you need any help please do not hesitate to pop us call on 02074425880 or email help@drewberry.co.uk.
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