Group Private Medical Insurance

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.

• Private Health Insurance was the second-most sought-after benefit in 2018 according to a survey of SME employees – it’s incredibly popular among workers.
• Employers can benefit from reduced absenteeism and improved productivity in the workplace.

What Does Group Private Health Insurance Cover?

When it comes to medical issues, there are two types of conditions you could suffer from: acute conditions and chronic conditions.

• Acute conditions
  Those which can be treated and get better with time. Such conditions include joint pain caused by the need for a joint replacement.
• Chronic conditions
  Chronic conditions are lifelong conditions that won’t get better with time and treatment as they’ll always be underlying. These include diabetes and asthma.

Private Health 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.

• Inpatient care
  That which requires a hospital bed overnight, such as after surgery. Also includes day-patient treatment, where you need to occupy a hospital bed just for the day. This is covered as standard by all Health Insurance policies.
• Outpatient care
  This is an optional extra on Health Insurance and encompasses all treatment where no hospital bed is needed, such as diagnostic tests and scans.

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.

No Outpatient Cover

With Outpatient Cover

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).

Group Health Insurance Exclusions

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:

• Emergency care
• Ongoing management and treatment of chronic conditions
• Kidney dialysis
• Fertility treatment / IVF
• Pregnancy and childbirth (unless there’s complications)
• Treatment for alcoholism/other substance abuse issues.

Will a Group Private Health Insurance Scheme cover pre-existing conditions?

Whether or not your policy will cover employees’ pre-existing conditions depends largely on the type of underwriting you choose.

Additional Cover

Options you may want to consider adding to your Health Insurance policy as well as outpatient cover include…

• Routine dental and optical cover
  While Private Health Insurance covers procedures such as cataract operations, routine dental treatment (e.g. checkups, fillings etc.) and routine optical treatment (e.g. glasses, contact lenses and checkups) aren’t typically included as standard.
• Psychiatric cover
  Most Group Health Insurance schemes won’t include psychiatric care as standard – it’s an optional extra to add to your policy.
• Family cover
  You can opt to include spouses / civil partners and children on your employees’ Health Insurance for an additional cost.

What are the Benefits of Group Health Insurance?

 For Employees

• Fast access to private medical care that your employer pays for
• Can cut time spent off sick on reduced sick pay
• Potentially offers cover for therapies, e.g. physiotherapy. This can help with back pain office workers often suffer with
• Employers may choose to allow you to add family members to the scheme, offering them the same cover
• Potential cover for pre-existing conditions if your group scheme is large enough.

For Employers

• Reduced staff absenteeism
• Gets employees treatment faster and therefore back to work sooner
• It’s a valued employee benefit and can therefore improve employee retention and recruitment
• Premiums are usually an allowable business expense against corporation tax (although there are other tax implications – see below)
• If employers pay for family members via salary sacrifice, it may reduce your National Insurance bill.

How Does Group Health Insurance Work?

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.

Making a claim

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 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 Health Insurance cover you’ve provided.

How is Medical Insurance Underwritten?

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 (FMU)

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.

Moratorium underwriting

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.

Drew Nelson
Health & Wellbeing Expert at Drewberry

Medical history disregarded (MHD)

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 a comprehensive Health Insurance option.

Switch or Continuing Personal Medical Exclusions

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.

How Much Does Group Medical Insurance Scheme Cost?

Four main factors that determine the cost of Group Health Insurance scheme are:

• The size of the group
  Although larger groups obviously cost more to insure as there are more employees, you may be entitled to a group discount for larger schemes
• The age of each individual member
  As we get older, the risk of us developing illnesses and diseases rise, so PMI for older people is more expensive as a general rule
• Your location
  Incidence of various illnesses varies depending on where you are in the country, as does the cost of private medical treatment (London hospitals are far more expensive than those in the rest of the country)
• The underwriting and level of cover you choose

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.

Nadeem Farid
Head of Employee Benefits at Drewberry

Policy Options to Reduce the Cost of Cover

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.

Excess

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.

6 week NHS wait option

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 procedure exceeds six weeks. If the waiting time on the NHS is below 6 weeks, then employees have the operation on the NHS.

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.

Additional hospitals

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.

Adding a Health Cash Plan

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.

How is Group Private Health Insurance Taxed?

As an employer, you can usually pay for your employees’ 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.

Get Expert Group Private Health Insurance Advice

Many providers will only offer Group 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.

Why Speak to Us?

We started Drewberry because we were tired of being treated like a number and not getting the service we all deserve when it comes to things as important as protecting our health and our finances. 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 impartial
  Drewberry isn’t tied to any insurance company, so we can provide completely impartial advice to make sure you get the most appropriate policy based solely on your needs.
• We’ve got bargaining power on our side
  This allows us to negotiate better premiums for you than you going direct yourself.
• You’ll speak to a dedicated expert from start to finish
  You will speak to a named expert with a direct telephone and email. No more automated machines and no more being sent from pillar to post – you’ll have someone to speak to who knows you.
• Benefit from our 5-star service
  We pride ourselves on providing a 5-star service, as can be seen from our 2149 and growing independent client reviews rating us at 4.92 / 5.
• Benefit from the protection of regulated advice
  You are protected. Where we provide a regulated advice service we are responsible for the policy we set-up for you. Doing it yourself or going direct to an insurer won’t provide this protection, so you won’t benefit from these securities.
• Claims support when you need it the most
  You have support should you need to make a claim. The most important thing when it comes to insurance is that claims are paid and quickly. We are here to support you during the claims process and make sure it’s as smooth and stress free as possible.

For help and advice with all your employee benefit needs, please don’t hesitate to pop us a call on  02084327333 or drop us an email on help@drewberry.co.uk.

Tom Conner
Director at Drewberry