How Are Corporate Health Cash Plans Taxed?

For Companies If you’re providing a Health Cash Plan for your workers, you can offset the cost against your corporation tax bill. Effectively, premiums are a tax-deductible business expense. However, as Corporate Health Cash Plans are a P11D / benefit in kind, you’ll need to pay employer’s National Insurance contributions at 13.8% on the benefit. For Employees If your workplace offers you a Corporate Health Cash Plan, you’ll be in receipt of a P11D benefit. This means there’s additional tax to pay as a result of having the benefit. To compensate for having the Health Cash Plan, which HMRC views as an effective increase in your wages without you actually being paid more, your tax code will be adjusted so that your personal allowance (the amount you can earn before paying tax) falls. How much extra tax you’ll pay depends on the cost of premiums and the tax band you’re in.

Is a Health Cash Plan Worth It?

This depends on your point of view. For employers, Employee Health Cash Plans are a very cost-effective employee benefit, far cheaper than full Health Insurance if your budget doesn’t quite yet stretch to PMI for every worker. Employee benefits have been shown to make workers feel more valued. Having subsidised access to dental, optical, physiotherapy, physiotherapy, osteopathy, chiropractic treatment and acupuncture, as well as potentially prescription costs, can reduce workplace absenteeism through illness and injury also. Of course, for the employee, given that there’s tax payable on the benefit, Cash Health Plans are only worth it if you make use of them to their fullest. This means not only using benefits such as routine dental and optical care but also remembering to claim the cost back afterwards from the insurer.

What Does a Health Cash Plan Cover?

Different providers will cover different treatments and will pay different amounts towards those treatments per policy year. It depends on the Cash Plan insurer you choose. However, generally speaking, you should expect cover for: Dental treatment Optical treatment Therapies (including physiotherapy, osteopathy and chiropractic appointments) Cash towards prescriptions. You may also have other extras on the policy depending on your provider, such as: Cashback for each night you spend in hospital as an inpatient Chiropody / podiatry Cash bonus on the event of a birth / adoption.

How Do Health Cash Plans Work?

Cash plans are fairly simple to understand. Each policy year 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 a limit of £100. This means each policy year, you’re entitled to claim back £100 towards dental treatment. You would go to 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 location you had it in. You then submit this receipt — traditionally this was done via post but it’s become increasingly common to be able to do this online via a photo taken with a smartphone — to the insurer and wait for a reimbursement for the treatment in your bank account. 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. So you could have five dental treatments costing £20 each in a policy year where your overall dental cover is £100, for instance.

Corporate Health Cash Plan / Compare Best UK Providers

Business Health Insurance	Corporate Health Cash Plan
Designed to cover minor and regular medical expenses (e.g. dental and optical checkups, prescription fees etc.)	Designed to cover minor and regular medical expenses (e.g. dental and optical checkups, prescription fees etc.)
Can cover the full cost of treatment for conditions covered in private healthcare facilities	Cover limited to several hundred pounds per year per condition/treatment
Is designed mainly to cover private healthcare only (although some providers will make payments for nights spent in NHS hospitals instead of using their Health Insurance plan)	Can be used towards both private and NHS provided healthcare if desired, so bridging the cap between the 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 choose the treatments you need and where you get them
Some insurers help you to organise your treatment and the bill will go directly to them	You have to organise your own treatment and pay for it

Common Corporate Health Cash Plan Questions

How Are Corporate Health Cash Plans Taxed?
For Companies

If you’re providing a Health Cash Plan for your workers, you can offset the cost against your corporation tax bill. Effectively, premiums are a tax-deductible business expense.

However, as Corporate Health Cash Plans are a P11D / benefit in kind, you’ll need to pay employer’s National Insurance contributions at 13.8% on the benefit.

For Employees

If your workplace offers you a Corporate Health Cash Plan, you’ll be in receipt of a P11D benefit. This means there’s additional tax to pay as a result of having the benefit.

To compensate for having the Health Cash Plan, which HMRC views as an effective increase in your wages without you actually being paid more, your tax code will be adjusted so that your personal allowance (the amount you can earn before paying tax) falls.

How much extra tax you’ll pay depends on the cost of premiums and the tax band you’re in.
Is a Health Cash Plan Worth It?
This depends on your point of view.

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

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

Of course, for the employee, given that there’s tax payable on the benefit, Cash Health Plans are only worth it if you make use of them to their fullest. This means not only using benefits such as routine dental and optical care but also remembering to claim the cost back afterwards from the insurer.
What Does a Health Cash Plan Cover?
Different providers will cover different treatments and will pay different amounts towards those treatments per policy year. It depends on the Cash Plan insurer you choose.

However, generally speaking, you should expect cover for:
- Dental treatment
- Optical treatment
- Therapies (including physiotherapy, osteopathy and chiropractic appointments)
- Cash towards prescriptions.
You may also have other extras on the policy depending on your provider, such as:
- Cashback for each night you spend in hospital as an inpatient
- Chiropody / podiatry
- Cash bonus on the event of a birth / adoption.
How Do Health Cash Plans Work?
Cash plans are fairly simple to understand. Each policy year 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 a limit of £100. This means each policy year, you’re entitled to claim back £100 towards dental treatment.

You would go to 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 location you had it in. You then submit this receipt — traditionally this was done via post but it’s become increasingly common to be able to do this online via a photo taken with a smartphone — to the insurer and wait for a reimbursement for the treatment in your bank account.

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. So you could have five dental treatments costing £20 each in a policy year where your overall dental cover is £100, for instance.