Business Health Insurance or Corporate Health Cash Plan

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18-02-2020

Many people are under the impression that Corporate Health Cash Plans and Business Health Insurance policies are similar, but that is certainly not true.

There are multiple differences between these two types of policies, so you’ll want to consider each type of insurance carefully when considering setting up one as part of an employee benefits package.

These two products offer drastically different cover, which is why employers need to do their research before deciding which is the right one to buy for their employees. To help with this decision, we’re here to provide all the information you need and offer expert recommendations. Broadly:

  • Business Health Insurance provides private medical care to employees paid for by an insurer, offering treatment for acute conditions
  • Corporate Health Cash Plans rebate employees a fixed lump sum towards various everyday medical expenses (e.g. prescriptions, eye tests / glasses, dental work) rather than paying for private medical care.

Difference Between Company Medical Insurance and Cash Plans?

A Corporate Health Cash Plan will pay out a lump sum to employees to cover the cost of routine medical check-ups and treatments. After employees receive and pay for their treatment or check-up they can use their receipts to claim back the cost from their Cash Plan provider up to a fixed limit per type of treatment.

In comparison, Business Health Insurance policies don’t pay out to employees, but rather pay out to private hospitals and facilities to cover the cost of private treatments that employees have been referred for. Employees are referred to private facilities for their treatment and the bill is then sent to the insurance provider for them to pay, less any health insurance excess which is the responsibility of the employee to meet.

Shortfall of a Cash Plan

One of the biggest problems with Cash Plans is that they require an employee to cover the initial costs of their treatment and take an active role in claiming the cost back from their provider. This can cause issues if an employee is unable to initially afford the treatment or if they forget to claim back the cost. But, with Medical Insurance, the bill goes directly to the insurer so employees don’t need to pay for anything unless their policy includes an excess.

Which Product Gives Better Cover?

Health Cash Plans and Medical Insurance policies primarily differ when it comes to what they intend to cover. While Cash Plans are designed for ordinary and routine expenses, Health Insurance covers occasional, more substantial medical costs.

Corporate Health Cash Plan Coverage

Corporate Health Cash Plans can cover a variety of routine health treatments and check-ups as well as a few extras to help employees better manage their health in their day-to-day life. Typical cover usually consists of:

  • Dental check-ups
  • Optical check-ups
  • Prescriptions
  • Physical therapies
  • Inpatient Hospital Benefits (a daily sum for each day spent in hospital as an inpatient)
  • Private or specialist consultations
  • Child benefit (a lump-sum when a child is born into the family or adopted).

Whether or not you receive all of these benefits or additional ones will depend on your provider and the level of cover you choose. Overall, no matter which policy or provider you choose, a Health Cash Plan will only ever cover a set list of health related costs.

Business Health Insurance Coverage

A Health Insurance policy’s coverage will cover private healthcare treatment which is split into inpatient and outpatient cover.

  • Inpatient and Day-patient medical treatments in a private hospital are treatments that require the use of a hospital bed either overnight or during the day.
  • If you want to increase the coverage you can include Outpatient cover. This type of optional cover will pay for consultations, diagnostic tests and scans where a hospital bed is not required.

Do they cover existing medical conditions?

Because a Health Cash Plan is so limited in cover compared to a Medical Insurance policy, providers have no issue with covering employees with pre-existing conditions. Some policies are even willing to cover treatments for chronic conditions (e.g. paying for prescriptions for steroid creams for psoriasis), whereas treatment for chronic conditions is typically excluded from Business Health Insurance.

Overall, Health Cash Plans are likely to be used more often in an employee’s everyday life, but their cover usually doesn’t equate to much more than a couple of dental check-ups and maybe a new pair of glasses each year. Health Insurance policies, on the other hand, aren’t likely to be used as often because they cover more serious medical needs, but the cover they provide can be life-changing for employees. If an employee needs an operation such as a joint replacement while covered by the policy, a Health Insurance policy will ensure their treatment starts quickly and that the majority of the costs are covered.

Which Product is Cheaper?

Despite how many employers want to genuinely do what’s right for their employees and give them the best possible benefits, ultimately cost is going to play a role in the type of benefits they are able to offer. For that reason, a lot of employers choose a Business Health Cash Plan over a Health Insurance policy because it is cheaper.

However, that doesn’t mean that the cost of Group Health Insurance is always enormously expensive. There are a lot of different details about your business, your employees and your policy that will have an effect on the premiums and you can adjust your cover accordingly if you’re cost-sensitive.

One of the benefits of a Medical Insurance policy is that you are given more control over the price. There are a range of policy options that you can choose that will reduce the cost of a Business Health Insurance policy and make this valuable cover more affordable for your business.

Reducing the number of private hospitals available to your employees or increasing the policy’s excess can make a great group policy a lot more affordable.

What Extra Benefits Do They Offer?

Employee Assistance Programmes are a common benefit to receive with any group protection product, but the services these programmes provide can differ a lot depending on the product you purchase and your provider.

Most group insurance policies will come with certain benefits that are offered to provide extra support for employees.

When it comes to Business Health Insurance policies, however, services tend to be more extensive than those offered by Health Cash Plans, if any are offered at all.

Many Business Health Insurance policies have been known to provide:

  • Hospice donations for those receiving palliative care
  • Consultant services for employers and managers
  • Digital GP services
  • Helplines
  • Over the phone and face-to-face counselling services.

One of the best benefits of a Group Health Insurance policy is also the extensive cover that so many offer for cancer. Some policies really go above and beyond to not only provide employees’ with their treatments but also cover the cost of prostheses, wigs, home nurses and more.

Get Expert Business Health Care Advice

Being completely impartial we help businesses of all sizes set-up the most appropriate and cost-effective healthcare policies for their employees. Where Company Health Insurance and Corporate Cash Plans are so different it often makes sense to get expert advice.

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 2766 and growing independent client reviews rating us at 4.92 / 5.
  • Gain 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.
Nadeem Farid, Head of Employee Benefits at Drewberry

While Group Health Insurance offers the most cover, ultimately employers will need to find the right balance between the cost and the benefits of these products.

If you are interested in providing employees with some form of healthcare policy please do not hesitate to pop us a call on 02074425880 or email help@drewberry.co.uk.

Nadeem Farid
Head of Employee Benefits at Drewberry

Great service assisting me obtain the right product. Would happily recommend Drewberry following their professional and efficient way of working.

Jonathan Chadwick
08/06/2020
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