Business Health Insurance

Company Health Insurance provides your employees with access to private healthcare paid for by an insurer.

Employees receive treatment when they need it most ensuring they are back on their feet as soon as possible.

A highly valued insurance for employees – the most popular paid-for benefit – it can help you to recruit and retain the best people whilst reducing employee absenteeism.

What Does Business Medical Insurance Cover?

It is designed to cover the cost of medical care to help speed up the diagnosis, treatment and recovery of an acute medical condition which might include:

• Scans and tests
• Consultations
• Surgical procedures
• Exclusive drugs
• Alternative therapies
• Hospital stays.

In addition to having access to the latest medical treatments and medications some of the other perks you can expect from your company private health insurance plan include:

• Private room
• Flexible visiting hours
• Shorter waiting times for treatment
• Flexible appointment times that can be tailored to suit your schedule
• Choice of consultants and specialists related to your medical issue.

Private health cover is designed to cover acute conditions which are defined as conditions that can be reversed with medical treatment. An example of an acute condition would be the need for a hip replacement, which can be solved by replacing the joint.

Inpatient vs Outpatient Treatment

There are two distinct types of cover provided by a health insurance business policy, almost all cover inpatient in full with the cost of your policy largely depending on the level of outpatient cover you opt for.

Inpatient and Day-Patient Treatment

Inpatient treatment is the foundation of any private medical insurance policy and tends to be covered in full. It covers any conditions that require an overnight stay which includes most operations where there is a recovery period such as kidney stones.

Day-patient on the other hand may require the use of a hospital bed during the day without needing it for an overnight stay. Examples of day-patient treatment might include minor surgery such as varicose veins, cataracts or a hernia.

Outpatient Treatment

Outpatient treatment covers the cost of care where the use of a hospital bed is not required, typical examples of such treatments would be x-rays, consultations and scans.

You can usually opt to either exclude outpatient treatment, cover an amount per employee up to a cash value (often £1,000 per year) or cover outpatient treatment in full. Naturally the more outpatient cover you opt for the higher you can expect your premiums to be.

Why Take out Business Health Insurance?

Health Insurance can be a valuable feature of a comprehensive Employee Benefits package, but the benefits of such a policy are not exclusively for the employees. While they will have access to free or reduced cost private healthcare, employers will benefit in a number of ways.

• 15% of employees looking for employment elsewhere are doing so due to a lack of benefits and 44% of employees consider employee benefits to be one of the most important qualities that they look for in a new employer.
• At the end of June 2017, 1 in 10 people waiting for hospital treatment had been waiting for more than 18 weeks. If your employee suffers from a debilitating illness or injury, they may not be able to work during this time.
• In 2016, an estimated 137.3 million UK working days were lost due to sickness, with musculoskeletal problems being among the top causes. A health insurance business policy could cover employees for fast therapy to resolve similar problems.

Small Businesses Can Benefit the Most…

For larger organisations there is strength in numbers and if one employee suffers an illness which leaves them on an NHS waiting list for treatment their workload can often be managed by the rest of their team.

Helping a small family business nurse it’s company health insurance back to health…

For smaller firms those resources may not be available leaving an absent employee’s workload with no where to go. A small business health insurance plan can be set-up for companies with two or more employees. Ensuring the workforce of a small business is healthy and can access treatment as quickly as possible should they need treatment can make all the difference when it comes to delivering business as usual.

Find out how we worked with Ytron-Quadro to set-up their small business health insurance scheme with Vitality.

Covering a business owner or single employee

If you are a small business owner wanting to pay for individual private health insurance through your limited company you can set-up a director health insurance policy.

It will be taxed in the same way as a company health insurance policy and it will be treated as a P11d benefit.

How Much Does Business Medical Insurance Cost?

The cost of your policy will depend on a range of factors, some of which you will be able to control while others you won’t:

• The size of the group you want to insure
• The underwriting
• The level of cover
• Average age of the group
• Your geographical location
• Your industry and occupation
• Optional cover ‘add-ons’.

Getting an accurate quote for a Business Health Insurance policy by yourself is no easy feat. There are so many policy options and details around your business that can influence the price of your policy.

Below we’ve provided examples of the average cost of health insurance per employee for different size businesses however we’ve had to make a number of different assumptions about the level of cover. For instance, we’ve assumed:

• There is a £1,000 outpatient cap
• There’s a £100 excess on the policy
• There is a mid-tier hospital list.

Note that these premiums are for illustration purposes only. The cost per employee for your business will depend on a wide variety of factors, so it’s always best to seek advice.

If you need any help we are on hand to do the market research and provide you with options from all the leading UK insurers, there is no fee for our service and your premiums will be the same whether you use us or go direct.

How is Business Health Insurance Taxed?

The premiums of a Business Health Insurance policy are paid for by the company with pre-tax profit. The policy is usually a business expense and is not liable for corporation tax.

However, it is a P11D/benefit in kind for the employee who receives the benefit. That means employers will need to fill out a P11D form to declare this benefit in kind to HMRC with employees being taxed accordingly.

Medical Underwriting for Company Health Insurance

When you take out a Health Insurance policy for your business, you will find insurers offering a range of different underwriting options that will affect the level of cover your employees get from the policy.

Full Medical Underwriting (FMU)

Full Medical Underwriting is the least expensive underwriting option, but can also be the most time consuming to apply for. This type of medical underwriting requires all of the employees included on the policy to disclose their medical history to the insurer.

FMU is most commonly used for small business health insurance schemes where only a handful of employees are covered and it is important they all know exactly what they are covered for from the outset.

It is likely that any pre-existing conditions will be excluded from their cover, but the benefit is that employees will know exactly what they are covered for.

Moratorium Underwriting

Moratorium Underwriting is the most common type of medical underwriting that is used and requires a lot less paperwork compared to FMU. This is because employees won’t have to fill out a medical questionnaire before applying for the policy.

Typically conditions that you have suffered from within the 5 years leading up to your policy’s start date will be excluded.

However, with Moratorium Underwriting if you have served a minimum of 2 years on the policy without receiving any treatment, medication or advice for said condition then it can be covered again on the policy.

Something to bear in mind with Moratorium Underwriting is that you cannot be sure what you are covered for until you try to claim.

Because insurers don’t take your medical information when you apply, they will look at your medical history when you put in a claim to see if they will be able to cover you.

Nadeem Farid
Head of Employee Benefits at Drewberry

Medical History Disregarded (MHD)

Medical History Disregarded is the best type of medical underwriting. However, it’s only available to larger groups – typically a minimum of around 20 members on the scheme – and is also the most expensive option.

With MHD Underwriting, all of your employees’ medical histories will be disregarded and they will receive full cover from the policy. This includes all of their pre-existing conditions, which means that this type of underwriting can give full cover to employees who might not be able to get it anywhere else.

Your Business Medical Insurance Options

There are a range of options for employers to choose from that can improve the cover of the policy and adjust the cost.

Level of cover

Choose the level of cover for your employees, including the level of outpatient treatment. While outpatient cover can add to the cost of your policy, it can be a valuable benefit as it can reduce the time it takes for employees to get a diagnosis for their medical issues.

To prevent the cost of your policy going up too much, you can limit the amount of outpatient cover. With limited cover, insurers will limit employees’ outpatient treatments to a set amount per year, often £1,000.

Six week NHS wait

This option will reduce your employees’ cover, but it will also have a significant impact on the cost of premiums. With this added to your policy, insurers will only pay out for a claim if the NHS wait time for the procedure is longer than six weeks. If it is shorter than six weeks, then employees use the NHS for treatment instead.

Excess

By adding an excess you can reduce the cost of the policy, an excess can range from £100 to £1,000. With this option, an amount will be set for employees to contribute either per year or per claim to cover a fraction of the cost of the treatment that they receive from the policy.

Number of employees covered

The number of employees that you enrol in your company health Insurance scheme will affect the cost of the policy and the options available to you.

Most insurers will ask for a minimum of at least 5 employees to qualify for group cover and MHD underwriting will only be available if you have more than 20 people on the scheme. You could introduce different ‘levels’ of cover, with more comprehensive cover reserved for those higher up in the business.

Small business health insurance tends to be more expensive than larger company private health insurance schemes as there are economies of scale in covering more individuals under a single group.

Additional Policy Options

Most insurers will have various optional benefits to add to your cover from dental and travel insurance to alternative therapies. These can all impact on your premiums and where the limits can vary with each insurer it is difficult to compare them like for like.

Psychiatric cover

Psychiatric cover is one of the most coveted options in terms of a business private medical insurance policy, but it can also be the most expensive. With psychiatric cover, employees will be able to claim for a set amount of psychiatric treatments or therapy sessions per year.

This is a great optional benefit to consider. Mental health issues are one of the most common concerns for employers today and every year the UK loses £70 billion as a result of mental health issues.

Dental and optical cover

Most group policies will cover operations and emergency procedures, most policies have an additional option to add cover for routine dental and optical treatments as well.

With this cover, employees will be able to claim for a certain amount of dental/optical checkups per year and have some of their other costs covered, including the cost of eyewear or retainers.

Cover for family members

Some employers extend coverage to family members which can either be set-up to be paid for by the company or the employee. This cover can be beneficial as it may reduce the amount of time employees are absent while they are looking after ill family members.

What’s Not Covered by Business Health Insurance

Pre-existing Medical Conditions

Pre-existing conditions are not always covered under a company health insurance policy however this will largely depend on how your group policy is underwritten.

Depending on the options you choose for your policy, pre-existing acute conditions will either be completely excluded, temporarily excluded, or covered regardless.

Chronic Conditions

Chronic conditions are not typically covered by any health insurance policy. Chronic medical conditions are health issues that are long-term and cannot be reversed by treatment.

Asthma and diabetes, for example, are chronic conditions for which treatment will not be covered by an insurance policy. However, most insurers will cover consultations leading up to the diagnosis or acute flare-ups of certain conditions.

If an employee has an episode of inflammation as a result of arthritis, your insurer may cover the treatment of the flareup.

In addition to chronic conditions, most insurers have their own standard exclusions that you will not be allowed to claim for. Some of the most common ones that you will come across include:

• Emergency care
• Kidney dialysis
• Fertility treatment
• Standard pregnancy and childbirth (may be covered for complications)
• Treatment or rehabilitation for alcoholism/substance abuse
• Cosmetic and plastic surgeries that are not medically necessary.

How to Apply for a Company Health Insurance Scheme

Step 1 :: Figure out what you want from your policy:

You should have a good idea of the what you want to achieve with your policy including:

• Number of employees you would like to cover
• Rough budget per employee
• The core policy options that you really want included in your policy
• Nice to have policy options if your budget suffices
• For larger organisations there are options to provide different levels of cover under the same policy for different tiers of staff.

Step 2 :: Compare quotes from the UK’s leading insurers:

The amount of information required to get a quote for a company health insurance scheme means that you can’t simply compare business health insurance quotes online like you can with individual health insurance.

You will need to gather information about your employees and company in order to get accurate pricing. In addition to the policy options above you will need to provide details of each employee you want covered including:

• Age
• Gender
• Address
• Occupation
• Whether they’re actively at work

Step 3 :: The employer applies for the policy and it is reviewed carefully:

When you have decided upon a level of cover and have chosen a suitable insurer you can make the application to the insurer. Make sure you read the terms carefully before you make your final decision, a lot of the small details can have a big impact on your employees’ ability to claim.

Step 4 :: The application is finalised and the employer sets up the payment of premiums:

After your policy has been put into place, you can set up the regular payment of premiums and your cover will begin on the start date established by your insurer. To make the most of your business health insurance policy clear communication should be provided to all staff through presentations, videos or other literature to ensure they are all aware of their policy coverage.

Get Expert Company Health Insurance Advice

Not everyone has time or the expertise to do all of the work involved in taking out an insurance policy for a group of people.

We work with all of the UK’s leading insurers, understand all the T&Cs and have processes in place to make setting up a new company health insurance scheme is as hassle free as possible.

Why Speak to Us…

We started Drewberry because we were tired of being treated like a number and not getting the service we all deserve 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.

• There is no fee for our service
• We are independent and impartial
  Drewberry isn’t tied to any insurance company, so we can provide completely impartial advice to make sure you get the most appropriate policy based solely on your needs.
• We’ve got bargaining power on our side
  This allows us to negotiate better premiums for you than you going direct yourself.
• You’ll speak to a dedicated expert from start to finish
  You will speak to a named expert with a direct telephone and email. No more automated machines and no more being sent from pillar to post – you’ll have someone to speak to who knows you.
• Benefit from our 5-star service
  We pride ourselves on providing a 5-star service, as can be seen from our 2274 and growing independent client reviews rating us at 4.92 / 5.
• Gain the protection of regulated advice
  You are protected. Where we provide a regulated advice service we are responsible for the policy we set-up for you. Doing it yourself or going direct to an insurer won’t provide this protection, so you won’t benefit from these securities.
• Claims support when you need it the most
  You have support should you need to make a claim. The most important thing when it comes to insurance is that claims are paid and quickly. We are here to support you during the claims process and make sure it’s as smooth and stress free as possible.

If you are reviewing an existing Company Health Insurance scheme or looking to set-up a new policy we are in a great position to help.

Please don’t hesitate to pop us a call on 02084327333 or email help@drewberry.co.uk.

Nadeem Farid
Head of Employee Benefits at Drewberry