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How Much Does Business Health Insurance Cost?

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If you’re looking to implement Business Health Insurance for employees, the first thing many people consider is just how much it will cost.

There are a variety of factors that will influence the cost of the scheme, however, which makes it tricky to give a general idea of the cost.

We’ve laid out quotes below for two very different companies with different needs to give a rough idea of pricing for a Company Health Insurance policy, but please be aware the cost of a scheme per employee varies considerably and depends on a range of factors.

Average Cost of a Business Health Insurance Scheme per Employee

Business Health Insurance schemes are very similar to Private Medical Insurance paid for by individuals, with the main difference being that the policy is paid for by the company rather than the individual receiving the cover.

This means that the same factors affecting the cost of Private Medical Insurance will also have an impact on your group scheme.

Group Size

One of the most obvious influences on the cost of a group policy is the size of the group you want to insure. While there is an additional cost per employee, the larger the group size the greater the discount and the lower the cost per employee.

Employee Age

Just as with individual cover, employees are rated based on their age. Each individual employee is considered before their premiums are added up into the total you pay for Business Health Insurance. This means a workplace with mostly older employees will likely face a higher total premium than a younger workforce. For example, a thirty-something employee might have individual premiums of around £40 per month while an employee over 60 could cost more than £120 per month to cover.

Occupation

The cost of Business Health Insurance depends partly on the occupation risk class your employees are in. Therefore, if your employees work in occupations that put them at greater risk of falling ill or being injured, you will likely be required to pay more for your group insurance policy. If your employees work in an office setting, then the risk would be reduced compared to a scheme covering scaffolders or firefighters, which may pay more in premiums to reflect the increased chance of them making a claim.

Geography

The location of your company will have an impact on the cost of your policy. This is because private hospitals and treatments vary in cost depending on where you are in the UK. If your company is based in London, for example, private hospitals can be particularly expensive, especially those situated in central London. Because of this, you can expect your policy to cost more than it might for a company based elsewhere in the UK.

It’s important to note that Company Health Insurance is a taxable P11D benefit in kind for employees, so there’s usually additional tax due from employees on the value of premiums paid on their behalf.

Nadeem Farid Head of Employee Benefits at Drewberry

The prices per employee below are for illustration only and much about your circumstances can affect the cost of your policy, including the age of your employees.

The policy options you choose will also affect the cost of your policy and many of these choices will depend on your needs as a company.

Nadeem Farid
Head of Employee Benefits at Drewberry

Case Study: Cantilever Architects, London

Cantilever Architects is a small team of London based architects consisting of 5 members that want a Business Health Insurance scheme that covers all of their employees.

They’re looking for a scheme with full outpatient cover, psychiatric cover, £100 excess, and moratorium underwriting. Below are some rough quotes of how much this type of policy will cost from each of the different insurers on an annual basis as well as per employee.

Insurer

Average per Employee
(Annual)

Total Premiums
(Annual)

aviva

£805.10

£4,025.52

AXA PPP Healthcare

£887.01

£4,435.07

bupa

£823.97

£4,119.84

vitality

£1,332.94

£6,664.68

Case Study: BitWare Ltd, Manchester

BitWare is a Manchester based company with a total of 76 employees that they want to have covered by their Group Health Insurance scheme. This company is also looking for moratorium underwriting, a £100 excess and full outpatient and mental health cover.

While there are more employees than the above example, there can be a group discount for larger schemes, leading to a lower cost per employee.

Insurance Provider

Average Per Employee
(Annual)

Total Premiums
(Annual)

aviva

£467.86

£35,557.20

AXA PPP Healthcare

£572.53

£43,512.31

bupa

£541.86

£41,181.36

vitality

£619.14

£47,054.28

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Which Policy Options Will Affect Your Premiums?

The cost of Group Health Insurance schemes can vary wildly depending on the level of cover they provide. The more comprehensive you make your policy, the more you can expect to pay in premiums.

Excess

An excess is an amount that employees agree to pay to cover part of their medical costs if they make a claim. Adding an excess to the policy will reduce the amount that your insurer is required to pay out to cover medical bills, which will in turn reduce the cost of the policy’s premiums.

The greater the excess you agree to pay, the more your policy’s cost is reduced. However, employers should take into consideration how much their employees may be able to afford when deciding on an appropriate level of excess.

6 Week Wait

Adding the 6 week NHS wait optional add-on to a policy will considerably reduce the cost of premiums but also prevent employees from claiming on their policy in certain circumstances.

A 6 week wait option is essentially an agreement that policyholders will only be able to have private medical bills for their treatments covered if the waiting time for the same treatment with the NHS is longer than 6 weeks.

Outpatient Cover

Adding outpatient cover to your policy will improve the range of cover provided by the policy, but also have a considerable affect on the cost of your Business Health Insurance.

As standard, a corporate policy will cover the cost of inpatient treatments and day patient treatments, which are those that require the use of a hospital bed either during the day or overnight.

Outpatient treatment will not require the use of a hospital bed and unlike other the types of treatment, Group Health Insurance providers will not usually offer this cover automatically as part of a standard policy. Instead, policyholders may add the cover to their policy, which will increase the overall cost.

Some policy providers will offer a choice of several different levels of outpatient cover to choose from, ranging from reduced to comprehensive. Choosing a lower level of cover will allow employees to receive the fast treatments they need without making premiums difficult to afford.

Hospital List

Each Company Health Insurance policy has a hospital list, which outlines which facilities around the country you are able to use for your private medical treatments. Many insurers will have several different hospital lists to choose from that will adjust the policy’s range of cover.

A reduced hospital list – the least expensive option – will usually cover only hospitals in your local area or private hospital rooms within NHS hospitals.

A standard hospital list will cover a good range of private hospitals around the UK, giving you more options as to where policyholders can receive their treatment. More expensive hospitals, however, will not usually be covered by this list.

A comprehensive hospital list will cover most private hospitals around the UK, including more expensive or luxury private facilities, such as those based in central London. A hospital list with this level of cover will be the most expensive and will usually be optional rather than applied to a policy as standard.

Additional Cover Options

Most providers will offer several different optional covers that can be added to a policy to increase its cover. Examples of these types of cover include,

  • Psychiatric Cover
  • Routine Dental & Optical Treatment
  • Therapies
  • Second Opinion

Adding these additional options can offer a range of benefits to employees covered by the policy, however each option will add to the policy’s premiums. It’s up to you to decide which cover options are worth the cost.

Get Expert Company Health Insurance Advice

Not everyone has time or the expertise to do all of the work involved in taking out an insurance policy for a group of people.

We work with all of the UK’s leading insurers, understand all the T&Cs and have processes in place to make setting up a new company health insurance scheme is as hassle free as possible.

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 2215 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

We help businesses of all sizes throughout the UK set-up and manage their corporate health insurance schemes.

If you would like some help please do not hesitate to pop us a call on 02084327333 or email help@drewberry.co.uk.

Nadeem Farid
Head of Employee Benefits at Drewberry

Great service. Cannot recommend highly enough.

Kirsty Bain
17/04/2019
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