What Is Corporate Health Insurance? How Much Does It Cost?

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10-09-2020

With Corporate Health Insurance, you pay insurance premiums for your employees. In return your staff gain access to private healthcare paid for by the insurer. Private treatment enables them to bypass potentially long NHS waiting lists and get them back on their feet and back to work faster.

It is a highly-valued employee benefit. In fact, it’s the insurance policy workers would most like to see their company introduce.

What Does Private Medical Insurance Cover?

Comprehensive Health Insurance, the option many larger corporations choose, includes both inpatient and outpatient cover. It therefore generally covers:

  • Tests and scans (e.g. x-rays, CT and MRI scans)
  • Consultations
  • Surgeries
  • Hospital stays
  • Therapies (e.g. physiotherapy, osteopathy etc.)
  • Exclusive drugs not available on the NHS due to cost
  • Alternative therapies (e.g. acupuncture).

Most policies and private facilities will offer benefits such as:

  • Choice of consultants and specialists
  • Flexible visiting hours
  • Much shorter waiting times for treatment
  • Appointment times tailored to suit an employee’s schedule.

Working Alongside NHS Services

Corporate Medical Insurance treats acute conditions. These are conditions that will improve with treatment (e.g. joint pain treated by having a hip replacement).

It won’t cover chronic conditions (for example those that don’t get better with time and remain with you for life, such as diabetes). For chronic conditions, employees will continue to use the NHS.

Policy Exclusions

As well as not covering chronic conditions, general exclusions you’ll find in most Private Health Insurance policies include:

  • Emergency care
  • Kidney dialysis
  • Fertility treatment
  • Standard pregnancy and childbirth (may be covered for complications)
  • Treatment or rehabilitation for alcoholism / substance abuse
  • Cosmetic surgery that is not medically necessary.

Should We Offer Corporate Healthcare?

The NHS does a fantastic job, but a funding squeeze has limited the amount of cash available even as demand for UK healthcare spikes. As a result, the NHS is under significant and sustained pressure.

For instance, at the end of June 2020, NHS statistics reveal 3.86 million people on NHS waiting lists in England awaiting treatment. Almost half of such patients had been waiting at least 18 weeks.

For employers, providing Corporate Healthcare as part of an impressive employee benefits package can:

  • Attract new employees
  • Improve employee retention and engagement
  • Reduce stress and staff absenteeism.

Happy, grateful and above all healthy employees tend to be more productive.

The Office for National Statistics estimates that illness / injury caused 141.4 million lost UK working days in 2018. Musculoskeletal problems were a major cause of these absences. A plan could, for example, cover employees for fast therapy to relieve aches and pains.

How Much Will Corporate Medical Insurance Cost Per Employee?

The cost of will vary between businesses, even those of similar sizes. That’s because it’s partly based on employee demographics. Factors which impact the cost of cover include:

  • Employees’ ages
  • Postcode(s) staff are normally based in for work
  • The underwriting you’re planning to choose
  • Policy options you want to add.

Below we’ve provided examples of the average cost of premiums per employee for different sized businesses. However, we’ve had to make a number of assumptions about the level of cover. For instance, we’ve assumed:

  • There is a £1,000 outpatient cap
  • There’s a £100 excess on the policy
  • There is a mid-tier hospital list.

These premiums are a guideline only — the cost could be different depending on your needs and circumstances. If you would like to compare corporate health insurance quotes from all the leading UK providers for your business call us on 02074425880 or email help@drewberry.co.uk.

50 Employees

Average cost per employee per month: £35.36

100 Employees

Average cost per employee per month: £28.79

150 Employees

Average cost per employee per month: £21.88

Corporate Health Cash Plan: A Cheaper Alternative

Private Medical Insurance can be an expensive benefit to provide for all staff.

A business with a tighter budget might want to consider a Corporate Health Cash Plan, which is significantly cheaper. Rather than paying for treatment in full it provides a cash reimbursement for every day healthcare costs, for example dental check-ups, physiotherapy and eye tests.

Your Healthcare Policy Options

You have a number of options when arranging Private Medical Insurance for your employees. Each will impact the overall cost of the cover.

Outpatient 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.

Excess

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.

Psychiatric Cover

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.

Who Are the Best Corporate Health Insurance Providers in the UK?

There are four main Company Health Insurance providers:

  • Aviva
  • Axa
  • Bupa
  • Vitality.

Each insurer is different and which one is right for your company and your staff depends on your circumstances. We work with all the major UK health insurers when it comes to negotiating the best deal for you and your business.

Digital GP Services & Other Additional Benefits

Most Corporate Health Insurance policies offer a digital GP service, usually via a smartphone app. This gives staff access to video and / or telephone GP appointments, usually 24 / 7, from the comfort of their own home.

Historically, you had to wait for an NHS GP referral to access private treatment. Now, however, remote GP services can make referrals for private treatment under the Health Insurance scheme if necessary.

In addition to virtual GP services many insurers provide other everyday wellbeing benefits such as counselling helplines and high street discounts.

Compare Corporate Medical Insurance Quotes & Get Expert Advice

Not everyone has time or the expertise to do all of the work involved in setting up a scheme for a large group of people.

So, to help you out, we work with every UK leading insurers and compare quotes from all of them. We also understand all the terms and conditions and have processes in place to make reviewing the market as hassle-free as possible.

Why Speak to Us…

We started Drewberry because we were tired of being treated like a number.

We all deserve first class service when it comes to employee benefits. Below are just a few reasons why it makes sense to talk to us.

  • There is no fee for our service.
  • We are independent and work with every leading UK insurer.
  • You’ll speak to a dedicated expert from start to finish.
  • Benefit from our 5-star service — we’re proud of the 2850 and growing independent client reviews rating us at 4.92 / 5.
  • Gain the protection of regulated advice.
  • Claims support when you need it the most.
  • A personalised benefits page for your business 👍  — see example.

If you need help setting up corporate medical insurance please don’t hesitate to call us on 02074425880 or email help@drewberry.co.uk.

I had a great experience with Drewberry, they have a lot of knowledge and expertise with life insurance and income protection and were able to advise me and arrange suitable products. Highly recommend.

Lachlan Mellings
12/08/2020
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