What Is A Corporate Health Cash Plan? Do We Need One? How Much Does It Cost?

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25-07-2020

A Company Health Cash Plan is a simple and affordable way to help your staff with the cost of everyday healthcare.

Depending on the plan, it can provide your employees with cashback towards treatments ranging from dentistry to physiotherapy.

Each plan has multiple ‘tiers’ of cover, with each tier offering a specified amount towards a given treatment per policy year. You get to choose which tier your employees will be on at the outset.

What Does A Corporate Health Cash Plan Cover?

For example, a first tier might only offer £100 towards dental treatment whereas a higher tier could offer £250. This will be dependent on the insurer and the tier of cover you opt for.

The most common treatments a Corporate Health Cash Plan covers include:

  • Dental cover
    Money towards anything from a simple checkup all the way to fillings, root canal treatment etc.
  • Optical cover
    Money for checkup fees, glasses and contact lenses etc.
  • Prescription cover
    Covers the cost of a set number of NHS prescription fees in a given policy month / year.
  • Therapies cover
    Pain-relieving therapies such as physiotherapy, chiropody, osteopathy and acupuncture.
  • Cashback for hospital stays
    A set amount for each day you spend as a hospital inpatient, up to a fixed number of days per year.
  • Additional benefits
    Such as support services or complementary benefits. For example, this may include telephone support and advisory services; counselling services; or cover for ‘lifestyle’ treatments (e.g. payments towards massages or teeth whitening).
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Do We Need a Business Cash Health Plan?

Company paid Private Medical Insurance is the second-most sought-after employee benefit among workers, and the most sought after insurance benefit.

Yet while Health Insurance is popular among workers, it comes with one main obstacle — the cost. Not every business can afford to provide a full blown Corporate Health Insurance scheme.

This is where a Health Cash Plan can step in. Implementing such a scheme can be a nice intermediary between offering staff no health cover at all and full Private Medical Insurance.

Benefits for Employers

Health Cash Plans can have numerous benefits:

  • Healthier employees form a more productive workforce, while better access to healthcare may reduce sickness absence.
  • May foster improved employer / employee relations and make it easier to attract and retain staff.
  • Ensures workers can afford to get the treatment they need as soon as they need it, as opposed to putting it off due to its cost.
  • Cash towards services such as physiotherapy can be used for sessions with a private provider in some instances. Staff may therefore be able to skip NHS waiting lists for treatment for musculoskeletal issues, one of the most common causes of workplace absences.

Benefits for Employees

A tangible benefit your employees will gain regular value from given it supports with their everyday health care costs. It shows them you care for their health & wellbeing.

Covering Dental Costs

In March 2019, the British Dental Association slammed an above-inflation increase in dental charges in England. It also revealed official statistics stating that nearly 20% of English dental patients had delayed seeking treatment due to cost.

A Corporate Health Cash Plan offering money towards dental treatment could encourage employees to visit the dentist regularly. This in turn could mean they don’t go on to develop much larger problems requiring more extensive (and costly) dental work.

Even if they do require such dental work, a Health Cash Plan can offer money towards that, also.

Optical Cover

According to a joint report from Specsavers and the Royal National Institute for the Blind (RNIB), a quarter of UK adults aren’t having an eye test at the recommended interval of every 2 years. This figure rises to almost 1 in 3 (31%) 18-24-year-olds.

Of those who hadn’t sought out an eye test in the past 2 years, nearly 1 in 5 said they were concerned about the cost of new glasses.

With a Corporate Health Cash Plan paying towards eye tests and potentially new glasses, this could be a notable burden off workers’ minds.

Prescription Cover

Many Health Cash Plan providers offer cover for prescriptions. This is typically up to a set number of prescriptions per month / year.

A study released by the Prescription Charges Coalition revealed that almost 30% of people admit to taking less than the prescribed dose of the medications they pay for.

43% of these people said that this was due to the cost of their prescription. Moreover, as a direct result of skipping or reducing the dosage of their medication, 59% of people became more ill.

Half of these people then needed to take time off work as a result of missing out on important medication.

What’s the Difference Between Health Insurance and a Health Cash Plan?

Business Health Insurance

Corporate Health Cash Plan

Covers the cost of medical treatment for acute conditions in private UK hospitals, allowing staff to skip NHS waiting lists.

Pays for minor and regular medical expenses (e.g. dental and optical checkups, prescription fees etc.)

Usually covers the full cost of treatment for eligible conditions, less any excess on the policy.

Cover limited per type of treatment (e.g. a fixed amount for dentistry) per policy year.

Covers private healthcare only (although some providers offer cashback if you choose NHS inpatient care over private care).

Can be used towards both private and NHS healthcare, bridging the gap between NHS free-at-the-point-of-use services and those with fees, such as dentistry.

Insurers have private hospital lists and recommended specialists you can be referred to.

You can typically choose the treatments you need and where you get them.

Most insurers help you organise your treatment and the bill goes directly to them.

You have to organise your own treatment and pay for it initially before you are reimbursed by the insurer.

Can We Get a Company Health Cash Plan?

In most cases the answer is yes, you can get a Corporate Health Cash Plan.

There tend to be very few qualifying criteria for staff and they’re easy to implement. Moreover, they’re relatively cheap to set up and administer.

Typically your staff must be within the minimum and maximum age range of the policy. You may also have to have a minimum number of staff, but this will vary between providers.

Covering Pre-Existing Conditions

Even if an employee has a pre-existing condition, it’s unlikely they’ll be refused entry to the Health Cash Plan. There’s rarely a need for a medical before staff can join a policy, either.

This reflects the fact that there are strict caps on the amount an insurer will pay towards treatment in any given policy year.

Also, the treatments Health Cash Plans cover are usually more minor than full Business Health Insurance and so patients pose much less of a risk to an insurer. This means insurers rarely require underwriting for a Company Health Cash Plan.

How Much Does a Corporate Health Cash Plan Cost?

While every business is different, Company Health Cash Plans are usually one of the cheapest insurances you can buy for your staff.

Furthermore, unlike many other policies, Group Health Cash Plans tend to have a flat fee. Usually, people within the same age group cost the same for the same level of cover.

Ultimately, the cost of a Corporate Health Cash Plan depends on:

  • Your workers’ ages
  • The number of people you want to cover with your plan
  • The level of cover you want from it.

Example Pricing of Corporate Health Cash Plans

The cost per employee is far more dependent on the level of cover you wish to provide rather than the demographic of your workforce.

Below we provide example pricing for two clients who wanted to provide a core level of cover for their employees.

Charity

Agricultural Firm

Location

Leicestershire

Isle of Wight

Number of Employees

125

35

Level of Cover

Tier 1

Tier 1

Cost per employee

£5.02
per month

£5.12
per month

How is a Corporate Health Cash Plan Taxed?

For companies providing a Health Cash Plan for your staff, you can offset the cost against your corporation tax bill. Generally, premiums are a tax-deductible business expense.

However, Corporate Health Cash Plans are a P11D / benefit in kind. You’ll therefore need to pay employer’s National Insurance contributions on the benefit.

For employees, a Company Health Cash Plan is also a P11D / benefit in kind. This means staff must pay additional tax as a result of having the policy.

HMRC effectively views a Health Cash Plan as an untaxed increase in workers’ wages. To compensate for this, their annual allowance — the amount they can earn before HMRC deducts tax — will be reduced by the same amount as the premiums paid on your behalf.

How Do Insurers Pay Corporate Cash Plan Claims?

The general route to a Company Health Cash Plan claim is as follows:

  • Have an eligible treatment as listed in your policy documents.
  • Pay as you normally would for this treatment, collecting a receipt detailing the exact treatment you’ve had and the person / practice who provided the treatment.
  • Submit your claim with the insurer — you can do this online, via the insurer’s mobile app or even by printing a physical claims form and posting it in.
  • Get the agreed cash amount towards the treatment you’ve had paid directly into your bank account, usually within 4-7 working days of the insurer receiving the claims form.

You may wish to check with the insurer that the treatment you’re seeking will be covered, as well as the level of cover the insurer offers for that treatment.

Initial Excess Period

When you first take out the policy, your workers may have to wait out an excess period before they will be able to make a claim.

The excess period of the policy will depend on your insurer, but they can be as long as 6 months.

Where Does a Health Cash Plan Fit In An Employee Benefits Package?

Company Health Insurance is the most popular benefit among workers. However, it’s also one of the more expensive insurances to offer your staff.

A Health Cash Plan can therefore slot in as a happy medium between no cover and comprehensive Private Medical Insurance.

A company may take out Health Cash Plan policy alongside Group Life Insurance, another low-cost yet popular employee benefit. This pays out a lump sum should one of your workers pass away while in your employment.

Other options to consider to build out a rounded employee benefits package include:

  • Group Income Protection
    Also known as Group Sick Pay Insurance, this pays out a proportion of your workers’ wages if they’re too ill to work. It works alongside and complements your company’s sick pay policy.
  • Group Critical Illness Insurance
    Pays out a lump sum to your staff should one of them become critically ill with one of the illnesses listed in the policy terms. The most common claims are for cancer, heart attacks and strokes.

Using a Health Cash Plan To Pay A Private Medical Insurance Excess

In some cases, employers set up Corporate Health Cash Plans to run alongside full Private Health Insurance.

The Health Cash Plan pays the excess on the Health Insurance policy. Having an excess keeps the cost of full Health Insurance; however, it can deter workers from using the scheme.

With a Corporate Health Cash Plan to cover the excess, companies therefore benefit from lower premiums on their Business Health Insurance and employees are less deterred from using it given the excess is covered.

IMPORTANT NOTICE
Setting up a Health Cash Plan to pay the excess on a full Private Medical Insurance policy can be complicated. It’s best you seek the advice of an expert, such as one of the team at Drewberry, if you’re considering this option.

Who Are The Best UK Corporate Health Cash Plan Providers?

We are an independent advisory firm who have access to all the leading UK health cash plan providers. Below is a list of the main insurers we work with:

  • Bupa
  • Healthshield
  • Medicash
  • SimplyHealth
  • Westfield Health

Each insurer has their own quirks and way of working so it is important to do your research when comparing policies. Price is often a driver when choosing cover but there are other things to consider in terms of customer support and the speed of claims.

Additional Cash Plan Benefits

Traditionally Cash Plans have focused on covering a fixed fee for everyday healthcare costs such as dental, optical and alternative therapies. However, there are a number of additional tangible benefits which some insurers are choosing to include to make their policies more attractive including:

  • 24 /  Virtual GP Service
  • Telephone Counselling
  • Personal Accident Cover
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Frequently Asked Questions

  • Are Health Cash Plans Worth It?

    This depends on your point of view.

    For employers, Employee Health Cash Plans are a very cost-effective employee benefit. It is far cheaper than full Health Insurance if your budget doesn’t quite yet stretch to PMI for every worker.

    Moreover, employee benefits have been shown to make workers feel more valued. Having subsidised access to dental, optical, physiotherapy, osteopathy, chiropractic treatment, acupuncture and prescription costs, among other benefits, can reduce workplace absenteeism through illness and injury also.

    Of course, for the employee, there’s tax payable on the benefit. Cash Health Plans are therefore only worth it if you make use of them to their fullest. This means not only having your routine dental and optical care but also remembering to claim the cost back afterwards from the insurer.

    Providing your staff fully engage with the policy, it can be a valuable employee benefit.

  • How Does A Health Cash Plan Work?

    Cash Plans are fairly simple to understand. You are given a set amount of money you can claim towards certain treatments, such as dental, optical and therapies (e.g. physiotherapy, osteopathy etc.).

    Say you have dental cover with an annual limit of £100. This means each policy year, you’re entitled to claim back £100 towards dental treatment.

    You would:

    • Visit the dentist as normal.
    • Pay for your treatment and ask for a receipt that details the type of treatment you had, when you had it and the details of the practice.
    • Submit this receipt. Traditionally you did this via post but it’s become increasingly common to do this online or through an app with a photo taken with a smartphone.
    • Wait for a reimbursement for the treatment in your bank account — it should arrive within 4-7 working days.

    You can claim as many times as you need to in each policy year providing the cost of your treatment doesn’t breach the cap set for that year. For example, you could have five dental treatments costing £20 each in a policy year where your overall dental cover is £100.

  • Does A Health Cash Plan Have A Qualifying Period?

    Yes, some Health Cash Plans do have a qualifying period.

    This is a delay period between your policy going live and your workers being able to claim. A qualifying period can be anywhere between 1 and 6 months.

    If you want a Health Cash Plan with no qualifying period then it pays to read the policy’s small print carefully. Alternatively, contact an adviser who can help ensure your policy meets this stipulation.

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Compare Health Cash Plan Quotes & Get Expert Advice

Not everyone has time or the expertise to do all of the work involved in setting up a Corporate Health Cash Plan.

When you choose Drewberry, we take all the heavy lifting off your desk. We’ll do what we’re best at — securing competitive employee benefits packages — so you can get on with doing what you’re best at: Delivering your own proposition.

We do this through working with all of the UK’s leading insurers and understanding all the T&Cs. Moreover, we have processes in place to make reviewing the Corporate Health Cash Plan market 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.

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

Kim S
22/06/2020
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