Business Health Insurance pays for your employees to have medical treatment in private hospitals and facilities. Offering private healthcare lets your staff bypass potentially long NHS waiting lists and receive treatment when they need it most. This can help them to get back on their feet and return to work quicker.
As far as employee benefits go private medical insurance is the most sought-after paid benefit among workers and therefore a very popular policy.
A workplace medical insurance policy will pay for treatment such as:
Business healthcare is designed to treat acute conditions, which are defined as conditions that pass with successful treatment. This might include cataracts needing surgery or a hernia repair.
On the other hand, it won’t tend to cover chronic conditions, which are lifelong illnesses that can’t be cured. For example, this includes asthma and diabetes. Ongoing care / management of chronic conditions will continue under the NHS.
As well as chronic and pre-existing conditions (the latter depending on medical underwriting), most insurers have a list of standard exclusions. Some of the most common exclusions are:
With it being so popular, there are a number of good reasons to introduce health insurance for your employees.
Whether it’s a simple trip to the GP, a dodgy back or something more serious such as cancer, everyone needs healthcare at some point.
However, although it’s true that we’re incredibly fortunate to have the NHS in the UK picking up the bill for most of our healthcare, the reality is that the system is under strain.
For instance, at the end of March 2020, the NHS revealed that there were 4.24 million people on NHS waiting lists in England awaiting treatment. More than 1 in 5 such people had been waiting more than 18 weeks.
Most policies now come with a digital GP service. These offer staff appointments with a GP, usually 24 / 7, from the comfort of their own home.
Typically via a smartphone app, these video calls with a remote GP mean covered employees no longer need to wait for an NHS GP appointment. They also can have an appointment outside office hours, so they don’t need to miss work.
Remote GP services can also make referrals for further private healthcare treatment if necessary.
The cost of cover depends on a range of factors. Major influences on the cost of premiums include:
Below we’ve provided example quotes for the average cost of healthcare cover per employee for different size businesses. However, we’ve had to make a number of assumptions to do so. For instance, we’ve assumed:
|Average cost per employee per month|
Note that these business health insurance premiums are for illustration only. If you would like to compare quotes from all the top UK insurers for your business give us a call on 02074425880 or email firstname.lastname@example.org.
Below are some of the most common policy options you will need to consider when setting up your private healthcare cover.
All medical care is divided into:
While inpatient treatment tends to be covered in full you will need to decide upon the level of outpatient cover you wish to provide. You have three options:
An excess is the money employees pay upfront towards a claim before the policy covers the rest. Adding an excess can cut the cost of the scheme by reducing the insurer’s overall bill for your workers’ medical care. Excesses commonly start from £100 (although an excess of zero is possible).
Not every scheme includes psychiatric care as standard, even though it’s one of the most sought-after options. However, it can also be one of the most expensive. This reflects how difficult some mental health conditions are to treat.
Most policies cover surgical procedures such as cataract removal or wisdom tooth extraction. However, routine dental and optical treatments such as checkups and eye tests don’t tend to be covered. Adding this option allows employees to claim for such expenses.
Here, insurers only pay a claim if the NHS wait for the inpatient procedure an employee needs is longer than 6 weeks. If the wait is shorter than 6 weeks, then the patient would receive treatment via the NHS.
Some employers extend coverage to family members. This can either be company-paid or employee-paid. You may find this beneficial as it can reduce the amount of time employees are absent while caring for ill family members.
The type of medical underwriting you choose will have a big impact on what your scheme covers.
The two most common types of underwriting are:
The cheapest option. However, it’s the most time-consuming to apply for, requiring all employees to disclose their medical history.
It’s common in small business health insurance schemes which only cover a handful of employees. Usually, the insurer excludes any pre-existing conditions an employee declares.
The most common underwriting, this needs much less paperwork than FMU as staff don’t have to declare their medical history.
The insurer excludes conditions an employee has suffered in the 5 years up to the policy’s start date. However, if they serve at least 2 years on the scheme without treatment, medication or advice for that condition, the insurer may look to include it going forward.
Whether you should choose moratorium or full medical underwriting depends on your needs and any underlying health conditions your employees have. You may be able to negotiate cover for certain minor conditions with one type of underwriting but not the other. This is an area your adviser will be happy to help with.
A third choice for larger companies (of at least 20-25 workers) is medical history disregarded underwriting.
The best type of underwriting, this ignores your employees’ medical history. It therefore includes all pre-existing conditions, which means it can provide cover to employees who might not be able to get it anywhere else.
However, it’s the most expensive option.
For the company, the policy is usually a business expense and is not liable for corporation tax.
However, it is a P11D / benefit in kind for the employees receiving the benefit. That means employers need to fill out a P11D form to declare it to HMRC, which then taxes staff accordingly.
HMRC usually taxes premiums through a reduction in a covered employee’s personal allowance. This will be by the same figure as the price of the premiums paid on their behalf. After this deduction, employees can earn less before tax kicks in.
Providing independent advice we work with all the leading UK insurers however the bulk of the employer health insurance market is made up of four main insurers:
To get the best deal for your business when setting up a private medical insurance scheme you should get quotes from all the top UK insurers as their pricing will vary depending on the demographics and location of your staff.
Each of the above Business Health Insurance providers has a number of additional everyday benefits. These come with the core cover and may include a digital GP with prescription service, stress and counselling helpline, high street discounts and other wellbeing benefits.
Given its popularity, business medical insurance is often one of the first benefits employers introduce into the workplace.
It can form a valuable cornerstone of any employee benefits package. Other insurances you might look at to round off your benefits package include:
While you generally need at least five people to arrange a scheme, it’s possible to get private medical insurance for smaller companies.
This generally involves arranging cover on an individual basis and having the company pay for it. It’s a popular option where there aren’t enough workers to set up a group scheme, or you’re only looking to cover yourself as a director.
CLIENT SUCCESS STORY 🥳
Read why family run engineering firm Ytron-Quadro turned to Drewberry to nurse their company health insurance back to health.
Not everyone has the time to do the heavy lifting required to sort out a competitive employee benefits package for their staff.
We have all the specialist knowledge as well as whole-of-market access to ensure you get the best deal for your business. That way you can focus on what you’re best at: Delivering your own proposition.
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.
If you need help setting up business medical insurance give us a call on 02074425880 or email email@example.com.
The staff have been very knowledgeable and I have enjoyed working with Nadeem on setting up our plan.