What Is A Corporate Health Cash Plan? How Much Does It Cost?

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21-10-2020

A Corporate Health Cash Plan is a simple and affordable way to help your staff with the cost of everyday healthcare. Depending on the level of cover, it can provide your employees with cashback to help cover the cost of a range of everyday health treatments including dental check-ups, eye tests, prescriptions and physiotherapy.

What Does A Health Cash Plan Cover?

This depends on your policy and the tier you choose. For example, a first tier might only offer £100 towards dental treatment whereas a higher tier could offer £250. You get to choose which tier your employees are on.

Guide to business health cash plans in the UK

The most common areas a policy covers include:

  • Dental cover
    Anything from a simple checkup all the way to fillings, root canal treatment etc.
  • Optical cover
    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
    Cash towards 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
    This may include telephone support and advisory services; counselling; personal accident insurance; or cover for ‘lifestyle’ treatments (e.g. paying for massages or teeth whitening).

Do We Need A Business Cash Health Plan?

Company Private Medical Insurance is the most sought-after insurance benefit among employees.

However, while it’s very popular among workers, it often comes with a big obstacle — the cost. Not every business can afford a comprehensive Corporate Health Insurance scheme.

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

Benefits for Employers

There are numerous benefits for companies:

  • Healthier employees are more productive.
  • Better access to healthcare may help 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.

Benefits for Employees

What’s The Difference Between A Cash Plan And Private Health Insurance?

Business Health Insurance

Corporate Health Cash Plan

Covers medical treatment for acute conditions in private UK hospitals, letting staff 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 policy excess.

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 pay towards both private and NHS healthcare, bridging the gap between free NHS 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 receive and where you get them, providing the policy covers a given treatment.

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 the insurer reimburses you.

How Much Does A Corporate Health Cash Plan Cost?

While every business is different, Company Health Cash Plans are usually relatively cheap.

Ultimately, the cost of a scheme depends on:

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

While workers’ age is a factor, the cost per employee is far more dependent on the level of cover you provide rather than the demographic of your workforce.

Below we provide example quotes 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

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How Do I Make a Claim for Treatment?

The general route to a claim is:

  • Have an eligible treatment as listed in your policy documents.
  • Pay as you normally would for this, 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 policy covers the treatment you’re seeking, 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 can make a claim. This will depend on your insurer, but they can be as long as 6 months.

How Does HMRC Tax A Cash Plan?

Companies providing Health Cash Plans can typically offset the cost against their corporation tax bill. Generally, premiums are a tax-deductible business expense.

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

As it’s also a P11D / benefit in kind for employees, staff must pay additional tax as a result of having the policy as well. To achieve this, HMRC reduces a worker’s annual allowance — the amount they can earn before HMRC deducts tax — by the same amount as the premiums a company pays on their behalf.

Who Are The Best UK Providers?

We are an independent adviser with access to every leading UK provider. Below is a list of the main insurers we work with:

  • Bupa
  • Healthshield
  • Medicash
  • SimplyHealth
  • Westfield Health

Each insurer has their own way of working so it is important to do your research. Price is often a driver but there are other things to consider, such as customer support and the speed of paying claims.

How Does It Fit Into an Employee Benefits Package?

As mentioned, a scheme can slot in as a happy medium between having no health cover and comprehensive Private Medical Insurance.

EXPERT TIP 🤓
In some cases we have been able to help our clients by implementing a cash plan alongside their business health insurance. The cash plan can be used to cover a higher excess which can help reduce the overall cost.

Other options to build a rounded employee benefits package include:

  • Death in Service Insurance
    Pays a lump sum equivalent to a multiple of an employee’s wages 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’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.

Compare Business Quotes & Get Expert Advice

Not every business has the time or expertise to set up and administer a benefits package for their staff.

When you choose Drewberry, we take all the heavy lifting off your desk. We’ll do what we’re best at — managing a great staff benefits package — so you can get on with doing 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 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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