Group Health Insurance provides your employees with access to private healthcare paid for by an insurer.
This allows them to bypass lengthy NHS waiting lists for eligible conditions, getting them back on their feet and in work again faster than if they’d had to wait for NHS care.
When it comes to medical issues, there are two types of conditions you could suffer from: acute conditions and chronic conditions.
Group Private Medical Insurance is designed to treat acute conditions – those which can benefit from private treatment and then subside.
When someone receives medical treatment, this will be split into inpatient and outpatient care.
The biggest decision is whether to include any level of outpatient cover on your plan. While all policies will cover inpatient treatment as standard, you’ll have to add outpatient care separately.
If you don’t have outpatient cover, then your employees will still be covered for big procedures, such as operations, but all outpatient treatment will need to be through the NHS. This runs the risk of delaying your care as waiting lists for outpatient treatment can be long.
You can either add full outpatient cover (where all eligible outpatient procedures are covered) or limited outpatient cover (which only cover outpatient procedures up to a set monetary limit per policy year).
In the UK an Employee Health Insurance scheme isn’t designed to provide all medical treatment. In some cases, especially for chronic conditions, you’ll still need to use the NHS for care. Common exclusions include:
Whether or not your policy will cover employees’ pre-existing conditions depends largely on the type of underwriting you choose.
Employer Health Insurance is incredibly modular, meaning you can add and subtract cover from the policy to create the ideal plan for you and your workforce.
Options you may want to consider adding to your Employee Health Insurance policy as well as outpatient cover include…
The company pays for the Employee Health Insurance scheme and your staff receive an insurance that allows them to receive healthcare in top-notch private medical facilities across the country.
When your employees need to make a claim, they’ll need to get authorisation from the insurer. They’ll look at the medical need for the claim (e.g. a GP referral).
Once the employee receives the claims authorisation number, they can take it to an appropriate private facility for treatment.
This treatment will usually be faster than would be available on the NHS. However, even with the best Private Medical Insurance, the process will start with a referral from an NHS GP. This is because Employee Private Health Insurance usually excludes GP (also known as primary) care.
Once your employees have a GP referral, their treatment will depend on the type of Group Medical Insurance cover you’ve provided.
As a company, your decision on how to underwrite your employees is very important. It will likely effect the cost and what your policy covers your workers for.
The underwriting options available to you will depend partly on the size of the group, as only larger companies are eligible for certain types of underwriting.
As a business looking for Corporate Health Insurance, you have three underwriting options plus a fourth option if you’re looking to move between schemes at renewal.
Full medical underwriting involves employees making a full disclosure of their medical history. The insurer will likely exclude any pre-existing conditions, but employees will know exactly what these are and which exclusions apply to them from the outset.
This option is available to schemes of all sizes and is usually the cheapest option because of its upfront exclusion of pre-existing conditions. However, given employees must declare all medical history there can be a lot of paperwork to get such a policy off the ground.
Unlike FMU, insurance with moratorium underwriting requires less in the way of administration. A moratorium underwriting means that a condition will be excluded if, at the start of the policy, the employee has suffered from it in the past five years.
No medical disclosures will be made upfront – rather, when it comes to a claim the insurer will check the employee’s medical history to make sure that condition hasn’t occurred during a period where it would be disqualified. Providing it hasn’t, the employee will be eligible to claim for it.
Moratorium underwriting is one of the most commonly chosen options as it allows for pre-existing conditions to be covered after employees have spent two consecutive years on the policy without receiving any advice, medication or treatment for that condition.
Health & Wellbeing Expert at Drewberry
MHD underwriting is the best Medical Insurance underwriting available. It ignores any pre-existing conditions, no matter when your employees have suffered from them. As the name suggests, your employees’ previous medical history is totally disregarded and they’re able to claim for any eligible condition under the policy’s terms.
It’s the most expensive type of medical underwriting because it’s so all-encompassing. Medical history disregarded underwriting is only available to large groups, usually starting with at least 20-25 people.
This is because the risk of a claims is spread wider over many more people, making it more economical to offer such comprehensive Health Insurance for employees.
Lastly, switch or continuing personal medical exclusions (CPME) underwriting are terms you need to look at if you’re moving from one insurer to another. This will ensure any pre-existing conditions you’ve suffered from and received treatment for under the previous policy should continue to be covered going forward with the new insurer.
You’ll need to provide your new insurer with your current insurance certificate and possibly answer some questions about your employees and any members who’ve received treatment under the old policy. Any exclusions already on the old policy will also be copied across.
Four main factors that determine the cost of Group Health Insurance scheme are:
It’s hard to provide a ballpark figure for the cost of Group Private Health Insurance because it depends so much on various different factors.
If you’re wanting to better understand your options we are in a good place to help. We’ll compare the market for you and put together a free report comparing best options from the top UK providers.
Head of Employee Benefits at Drewberry
There are several factors which have an impact on your policy’s premiums that can’t be changed, such as where the employees are based for work or the demographic of your workplace.
However, there are multiple factors you can adjust within your policy to increase the level of cover or reduce your premiums.
An excess is the option to have employees pay a set amount per year or per claim towards any treatment they may receive. Including an excess and having the employees pay for a proportion of the treatment reduces the risk to the insurer and so can lower premiums.
Choosing a 6 week wait option will result in your plan only paying for treatment if the waiting list on the NHS for that particular inpatient procedure exceeds six weeks. If the waiting time on the NHS is below 6 weeks, then employees have the operation on the NHS.
This only applies to inpatient care; if you’ve added outpatient care to the policy, your employees will receive this privately as normal.
Although this limits the cover provided, it can make significant savings on your premiums as for certain acute conditions many NHS trusts have had waiting lists below 6 weeks.
To keep the cost of your scheme down, many providers offer more than one ‘tier’ of treatment facilities. The most expensive and exclusive hospitals and clinics are on the top tier and access to these may be included for an extra premium.
Some employers choose to implement a Health Cash Plan alongside their Private Medical Insurance. This offers cash towards certain routine health expenses, such as dental and optical treatment. It can also be used to cover any excess you implement on the plan.
The employee can claim back the cash they’ve paid upfront as an excess from the Health Cash Plan. Despite having two policies, this often works out cheaper than having just Group Health Insurance with no excess.
As an employer, you can usually pay for your employee Health Insurance from pre-tax earnings. This makes the premiums allowable as a business expense against corporation tax.
For employees, their employer paid medical insurance is known as a P11D benefit or a taxable benefit in kind. This refers to a benefit your employees receive that’s not counted as part of their salary but is nonetheless a benefit and so HMRC will levy tax against it.
As HMRC views Group PMI as part of employees’ remuneration, as a company you’ll generally need to pay employer’s National Insurance on the premiums, also.
That usually means employees have their annual income tax allowance reduced by the same amount of the premiums paid on their behalf, meaning they 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.
Many providers will only offer Group Private Medical Insurance quotes via intermediaries such as Drewberry, so if you want to research every UK provider you may have to use an expert.
Fortunately, the team at Drewberry are here to help you research the whole the market and ensure you can make an informed decision when it comes to setting up your group scheme.
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Martyn Coates from Drewberry provided an excellent service with prompt handling of any question that we asked him. I would highly recommend Drewberry for anyone wanting Insurance.