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.
What Is A Corporate Health Cash Plan?
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.
Why Offer A Company Health Cash Plan?
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.
How Does It Work?
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.
How Can An Employee Make A Claim?
Claiming on a Company Health Cash Plan is pretty straightforward. It usually looks like this:
- The employee has eligible treatment (it must be listed on the policy)
- The employee pays for the treatment, obtaining a detailed receipt
- Then the employee submits a claim (online, via the insurer’s mobile app, or by printing a physical claims form and posting it)
- The insurer pays the agreed cash amount directly into the employee’s bank account, usually within 4-7 working days after receiving the claims form.
This is just a guideline, so it’s important to check the claims process with your specific provider.
What Are The Benefits Of A Health Cash Plan?
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.
Benefits For Employers
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:
- Helps to reduce absenteeism
- Provides access to healthcare
- Creates a healthier, productive team
- Improves employer to employee relations as a result of high value benefits
- Supports staff physically and financially
- Adds a competitive edge during recruitment
- Improves company retention rates.
Benefits for Employees
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:
- Increased value
Staff may feel more valued and appreciated by their employer knowing they actively support their wellbeing
- No initial costs for cover
While staff will have to pay upfront for any eligible treatment they have, it’s the employer who sets up the benefit and pays for the cover. So there’s no initial cost for employees to get access to the Health Cash Plan
- More affordable dental treatment
The British Dental Association revealed that 25% of patients delay or forgo NHS dental treatment due to cost. A Business Health Cash Plan can help to support staff cover these costs and get dental care when they need it
- Financial support towards optical services
Many people put off getting an eye test because of the cost of glasses, despite vision changes. A Company Health Cash Plan can offer monetary support
- Lower price prescriptions
1 in 10 people have skipped necessary medication due to the cost of prescriptions in the UK. If your policy offers this benefit, staff can get their money back up to a specified limit
- Support for musculoskeletal issues
Staff can skip long NHS waiting lists if they need healthcare relating to a musculoskeletal affliction, such as back pain. These issues were one of the top reasons for sickness absence in 2022.
What Do Group Health Cash Plans Cover?
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:
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.
Corporate Health Cash Plan Vs Company Health Insurance
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:
- A Corporate Health Cash Plan aims to help staff out with their everyday healthcare needs. This can be routine appointments, such as dental check ups and eye tests, as and when the employee needs it. I can be an affordable way to offer health support to employees
- Company Health Insurance is more comprehensive and covers treatment of acute conditions. It can cover the entire treatment process, from diagnostic tests and scans, to inpatient care. It’s generally more costly.
Let’s break it down in more detail:
How Does A Company Health Cash Plan Fit Into An Employee Benefits Package?
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?
- Death In Service Insurance
Death In Service pays a lump sum equivalent to a multiple of an employee’s salary if they pass away while under contract with your company
- Group Income Protection
Also known as Group Sick Pay Insurance, it pays out a proportion of your workers’ wages if they can’t work due to accident or sickness. It works alongside and complements your company’s sick pay policy
- Group Critical Illness Insurance
Critical Illness Cover pays out a lump sum to your staff should they become critically ill with an illness listed in the policy. The most common claims are for cancer, heart attacks and strokes.
Using It To Cover Private Medical Insurance Excess
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:
- Support helplines
- Health screenings
- Virtual GP access
- Mental health support
- Hearing tests.
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 Do Employee Health Cash Plans Cost?
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:
- How old your employees are
- How many people you require cover for
- The level of cover.
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.
How Does HMRC Tax A Business Health Cash Plan?
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.
Who pays for a Corporate Health Cash Plan?
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.
Does it cover pre-existing conditions?
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.
What happens if a treatment exceeds the yearly allowance on the policy?
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.
Is it a P11D / Benefit in Kind?
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.
Is a Group Health Cash Plan mandatory?
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.
Who Are The Best UK Corporate Health Cash Plan Providers In 2023?
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:
- Westfield Health.
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.
Compare Group Health Cash Plan Quotes And Get Expert Advice
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 email@example.com.
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.