What Is Group Private Medical Insurance? How Much Does It Cost?

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09-09-2020

Group Health Insurance grants your employees access to private healthcare treatment in the UK all paid for by an insurer. It enables them to bypass potentially long NHS waiting lists, getting them back on their feet quickly and speeding up their return to work.

We’re so fortunate to have the NHS in the UK. However, the reality is that the system is under strain. A funding squeeze coupled with greater demand has seen waiting lists rise.

Why Choose Group Health Insurance?

Employee benefits are a huge plus for any company. This is especially true for Private Medical Insurance given just how keen staff are on it — it’s the most popular insurance benefit workers would like to see.

Providing staff access to private healthcare services can cut time spent off sick (potentially on reduced sick pay) by enabling them to bypass NHS waiting lists. They receive treatment promptly when they need it most.

Digital GP Services

Most Group Private Medical Insurance schemes now come with a digital GP service, offering phone or video GP appointments (usually 24 / 7) from the comfort of your own home.

Staff no longer need to wait for an NHS GP appointment. They also can be seen outside office hours, so they don’t need to miss work, take holiday or use unpaid leave.

CLIENT SUCCESS STORY 🥳
Read why Trailmix, the rapidly expanding mobile gaming start-up chose to set up Health Insurance for their employees.

What Does Private Medical Insurance Cover?

It’s important to recognise that Private Medical Insurance is designed to supplement and complement the NHS rather than replacing it fully. It therefore doesn’t cover every medical need that may arise.

Medical treatment is broadly split into:

  • Inpatient care
    Where a patient needs a hospital bed overnight, for example post-surgery. Also includes day-patient treatment, where a patient needs a bed just for the day. All policies cover both as standard.
  • Outpatient care
    An optional extra, this includes all healthcare where a patient doesn’t need a hospital bed, for example diagnostic tests and scans.

While outpatient cover is optional when setting up a policy (not having it cuts costs), relying on NHS outpatient care runs the risk of delaying private inpatient treatment.

No Outpatient Cover

Group Medical Insurance No Outpatient Process

Including Outpatient Cover

Group Private Health Insurance Outpatient Process

To avoid this delay, employers can:

  • Add full outpatient cover
    Covers all eligible outpatient procedures.
  • Choose limited outpatient cover
    Covers outpatient procedures up to a set limit per patient per policy year, often £1,000.

Chronic vs Acute Conditions

There are two broad types of medical conditions:

  • Acute conditions
    Pass with time / treatment, for example joint pain needing a joint replacement.
  • Chronic conditions
    Won’t go away with treatment, these lifelong conditions include diabetes and asthma.

So, while a policy covers acute conditions, it won’t treat chronic conditions. The NHS will therefore continue to take care of conditions such as asthma and diabetes.

Other Healthcare Exclusions

Most insurers have a number of standard exclusions which often include:

  • Emergency care
  • Ongoing management and treatment of chronic conditions
  • Kidney dialysis
  • Fertility treatment / IVF
  • Pregnancy and childbirth (unless there are complications)
  • Treatment for alcoholism / substance abuse
  • HIV / AIDS
  • Pre-existing conditions (dependent on underwriting).

How Much Does Group Private Health Insurance Cost?

There are five main factors that decide the cost of a policy:

  • The size of the group
  • The age of each employee
  • Your location
  • Your underwriting
  • The level of cover you choose.

Below we’ve provided examples of the average cost of cover per employee for variously-sized businesses. To do so, we’ve made the following assumptions:

  • There is a £1,000 outpatient cap
  • There’s a £100 excess on the policy
  • The client has chosen a mid-tier hospital list.
Average cost per employee per month
10 Employees

£54.54

50 Employees

£35.36

100 Employees

£28.79

These premiums are for illustration only. The cost per employee depends on a wide array of factors. If you want to compare quotes from the top UK insurers call us on 02074425880 or email help@drewberry.co.uk.

Key Policy Options

There are a number of options you can choose which will impact the level of cover and the overall cost of a Business Health Insurance scheme.

  • Excess
    An excess means each member pays a set amount per year or per claim towards treatment. This reduces the cost of a claim for an insurer and therefore cuts premiums.
  • Psychiatric cover
    Psychiatric care is one of the most sought-after options but also among the most expensive. This reflects how difficult many mental health problems are to treat. However, given that each year the UK loses £70 billion due to mental health issues, it’s a great additional benefit.
  • Dental and optical cover
    While policies typically cover surgical procedures such as cataract removal or wisdom tooth extraction, this isn’t the case for routine dental and optical care, e.g. eye tests or dental checkups. Adding this enables employees to see an optician or dentist under the policy.
  • Cover for family members
    Many employers allow staff to add immediate family to the policy. This can be at the cost of the employee or the employer.
  • Additional hospitals
    Most insurers have multiple ‘tiers’ of facilities. If you’re happy to not pay the extra premium for access to the top facilities in the country, usually those in Central London, it can reduce the cost of cover.
  • 6 week NHS wait option
    Your policy will only pay for inpatient treatment if the NHS waiting list for that particular procedure exceeds 6 weeks.

Medical Underwriting Options

Your underwriting impacts premiums and what your policy covers staff for. There are three main options, plus a fourth for switching insurers.

Full Medical Underwriting (FMU)

Full medical underwriting sees employees disclose their medical history. The insurer will likely exclude pre-existing conditions, but employees will know exactly which exclusions apply from the start.

This option is usually the cheapest because it excludes pre-existing conditions upfront. However, as employees must declare all medical history, there’s usually lots of paperwork.

Moratorium Underwriting

Moratorium underwriting requires much less initial information. It sees a condition excluded if, at the start of the policy, the employee has suffered from it in the past 5 years.

Employees don’t need to make any medical disclosures upfront. Instead, at claims stage the insurer checks their medical history to make sure that condition hasn’t occurred during a period where it would be disqualified.

Medical History Disregarded (MHD)

MHD underwriting is the best Medical Insurance underwriting. It ignores pre-existing conditions, no matter when an employee had them.

It’s the most expensive underwriting because it’s so comprehensive. It’s also only available to larger groups, usually of at least 20+ people.

Continuing Personal Medical Exclusions

Lastly, you use switch or continuing personal medical exclusions (CPME) underwriting to move from one insurer to another.

This ensures any conditions a worker has had treatment for under a previous Group Health Insurance plan should continue to be covered with the new insurer.

How is It Taxed?

Employers usually pay for employees’ Private Medical Insurance from pre-tax earnings. HMRC typically treats premiums as a business expense.

For staff, employer Medical Insurance is a P11D taxable benefit in kind, so they pay additional tax on this cover.

As an employer, you’ll need to fill out a P11D form declaring that you’ve provided staff with a benefit in kind. You’ll also usually need to pay employer’s National Insurance on the premiums as well.

Who Are The Best UK Group Health Insurance Providers?

There are four main providers in the market. Each offers very different policies and pricing structures:

  • Aviva
  • AXA
  • Bupa
  • Vitality

In addition to the core cover all of the leading providers now provide a video GP service. Other benefits also include counselling helplines, wellbeing services and high street discounts.

Being an independent adviser we work with all the leading insurers in the UK. Given our scale and expertise we are in a great position to negotiate the best deal for your business.

Do You Require International Cover?

If you are looking at health insurance to cover staff abroad there are other international providers including Cigna, Aetna and Allianz which we would consider when comparing quotes and providing recommendations.

Where Does It Fit With an Employee Benefits Package?

Firstly, it’s one of the most popular employee benefits and therefore goes a long way towards promoting goodwill among your employees.

Secondly, it forms a valuable cornerstone to any employee benefits package. Other benefits you might look at include:

  • Group Life Insurance
    Pays a cash lump sum to an employee’s family if they pass away while working for your company.
  • Group Income Protection
    Works with your company’s sick pay policy to offer cover in the form of a continuation of a worker’s monthly income if they are ill or injured.
  • Group Critical Illness Cover
    Offers your employees a lump sum if they’re diagnosed with a critical illness such as cancer, heart attack or stroke.

Compare Group Health Insurance Quotes & Get Expert Advice

Not everyone has the time or expertise to do the heavy lifting to implement this type of wellbeing scheme. We have the knowledge, expert advisers and whole-of-market access to ensure you get the best premiums.

Letting us do the heavy lifting means you can focus on 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.

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 group private medical insurance give us a call 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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