Key Corporate Healthcare Options
You have a number of options when arranging Private Medical Insurance for your employees. Each will impact the overall cost of the cover.
Choose how much outpatient cover your staff receive. Your options are:
- Full cover, where all eligible treatment is covered
- A capped policy, where outpatient treatment is limited, say to £1,000 per year
- A basic inpatient-only policy, where staff aren’t entitled to any outpatient care.
Excesses typically start at £100. The larger your excess, the more staff will have to pay towards their treatment but the cheaper premiums will be.
Every year the UK loses £70 billion as a result of mental health issues, making access to quality mental healthcare vital.
However, not all Company Health Insurance includes psychiatric cover as standard — it may be an optional add-on. Choosing it gives employees a set amount of mental health treatment per year.
Dental and Optical Cover
Most plans cover surgical procedures such as cataract and wisdom tooth removal. However, a policy usually won’t cover routine optical and dental care, such as the cost of check-ups, fillings, new glasses etc. This option expands your Health Insurance to cover such routine care.
6 Week NHS Wait
This option can cut the cost of premiums. It means staff can only claim if the NHS waiting list for the inpatient treatment they need exceeds 6 weeks. If not, they’ll use the NHS.
Cover for Family Members
You have the option to add employees’ families. The business can pay for this or you can ask the individual worker to pay.
Including family members may be beneficial as it could reduce the amount of time employees are absent while caring for ill family members.
Underwriting Corporate Medical Insurance
You have three underwriting options, plus a fourth if you’re looking to move between providers. Each is different and will determine just what staff can claim for based on their pre-existing conditions.
- Full medical underwriting (FMU) requires upfront disclosures of employees’ medical history. Once the insurer has this information, it usually excludes pre-existing conditions.
- Moratorium underwriting requires far less initial administration. Any condition the employee has had in the 5 years leading up to the policy start date will be excluded.
- Medical history disregarded underwriting is the best available on the UK market. Available to groups of at least 20-25 members, it ignores any pre-existing conditions, no matter when your staff suffered from them. Employees can therefore claim for any eligible condition under the policy’s terms.
- Switch or Continuing Personal Medical Exclusions (CPME) can be used if you have an existing scheme and want to switch providers. It ensures that the new insurer will cover any pre-existing conditions which the old policy covered.
How Does HMRC Tax It?
Premiums are usually an allowable business expense against your corporation tax bill.
However, for employees, corporate health insurance is a P11D / taxable benefit in kind.
As such, HMRC levies tax against premiums by reducing employees’ annual income tax allowance by the same amount of the premiums paid on their behalf, meaning staff can earn less before becoming subject to tax.
As an employer, you’ll need to fill out a P11D form to declare to HMRC that you’ve provided your employees with a benefit in kind and pay employer’s National Insurance on the premiums.