What Is Business Health Insurance? How Much Does It Cost?

4.9 / 5
Rated 4.92 / 5 by 2949 client reviews

11-12-2020

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.

Access care the NHS may not be able to provide due to cost, such as advanced cancer drugs / treatment.
Provide employees with appointments to suit them, usually with a choice of consultants, specialists and facilities.

As far as employee benefits go private medical insurance is the most sought-after paid benefit among workers and therefore a very popular policy.

What Does Private Healthcare Cover?

A workplace medical insurance policy will pay for treatment such as:

Scans and tests
Consultations
Surgical procedures
Therapies (e.g. physiotherapy, osteopathy etc.)
Exclusive drugs not available on the NHS due to cost
Alternative therapies (e.g. acupuncture)
Hospital stays.

What Is Not Covered?

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.

Complete UK guide to company private medical insurance 2021

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:

Emergency care
Kidney dialysis
Fertility treatment
Standard pregnancy and childbirth (may be covered for complications)
Treatment or rehabilitation for alcoholism / substance abuse
Cosmetic surgery that is not medically required.

Should We Get Company Health Insurance?

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.

Access To Digital GP Services

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.

CLIENT SUCCESS STORY 🥳
Read why Trailmix, the rapidly expanding mobile gaming start-up chose to set up a small business health insurance scheme for their employees.

Compare Top 10 UK Business Insurers

Takes approx. 60 seconds

4.9 / 5
Rated 4.92 / 5 by 2949 client reviews

How Much Does Business Health Insurance Cost?

The cost of cover depends on a range of factors. Major influences on the cost of premiums include:

The size of the group you want to insure
The underwriting
The level of cover
Average age of the group
The location of your workplace
Your industry and occupation
Optional cover ‘add-ons’ (see below).

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:

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

Average cost per employee per month
10 Employees
£54.54
50 Employees
£35.36
100 Employees
£28.79

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 help@drewberry.co.uk.

Key Healthcare Policy Options

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:

Inpatient / day-patient treatment
All policies cover this in full. Inpatient care is any procedure needing at least one overnight stay in a hospital bed. Day-patient treatment meanwhile requires a hospital bed but just for the day, for example after minor surgery.
Outpatient treatment
An optional extra, outpatient care includes any treatment where no hospital bed is necessary. This includes diagnostic tests, scans, therapies and consultations.

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:

No outpatient cover (meaning staff have to use the NHS for diagnostic tests and scans etc.)
Limited outpatient cover (a mid-range option which caps outpatient care, say at £1,000 per employee per policy year)
Full outpatient cover (foots the bill for all outpatient treatment staff may need).

Excess

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).

Mental Health Cover

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.

Dental and Optical Cover

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.

6 Week NHS Wait

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.

Cover for Family Members

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.

Underwriting Your Business Health Insurance

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:

Full Medical Underwriting (FMU)

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.

Moratorium Underwriting

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.

More on the difference between full medical and moratorium underwriting here >>

ADVISER TIP
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.

Medical History Disregarded (MHD) Underwriting

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.

How Is It Taxed By HMRC?

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.

Who Are the Best UK Business Health Insurance Companies?

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:

Aviva
AXA
Bupa
Vitality.

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.

Where Does It Fit Into An Employee Benefits Package?

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:

Group Life Insurance
Pays out a lump sum equivalent to a multiple of an employee’s earnings if a staff member passes away while under contract with your business.
Group Income Protection
Provides employees with a continuation of income (a percentage of their wages) if they’re off sick for any medical reason. It works with your company’s sick pay policy to provide comprehensive protection if a worker is ill or injured.
Group Critical Illness Cover
Offers your employees a lump sum payment if they’re diagnosed with a critical illness such as cancer, heart attack or stroke.

Getting Small Business Health Insurance

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.

Compare Business Health Insurance Quotes & Get Expert Advice

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.

Why Speak to Us?

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.

There is no fee for our service
We are independent and work with all the leading UK insurers
You’ll speak to a dedicated expert from start to finish
We are very proud of the 2949 and growing independent client reviews rating us at 4.92 / 5
Benefit from the protection of regulated advice
Claims support when you need it most
A personalised benefits page for your business 👍

If you need help setting up business medical insurance give us a call on 02074425880 or email help@drewberry.co.uk.

The staff have been very knowledgeable and I have enjoyed working with Nadeem on setting up our plan.

Kim S

22/06/2020

Read our 2949 independent reviews

Compare Top 10 UK Business Insurers

Takes approx. 60 seconds

Or call us on 0208 432 7333