Drewberry™ provide pensions, investment and insurance advice for Money to the Masses readers throughout the UK.

How much does Business Health Insurance cost per employee?

How Much Does Business Health Insurance Cost?

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.

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The cost of health insurance for each employee will depend on several 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

Occupation

Geography

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.

Average cost for 5 employees company health insurance

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.

Insurance Provider

Average Per Employee
(Annual)

Total Premiums
(Annual)

Aviva logo

£805.10

£4,025.52

AXA logo

£887.01

£4,435.07

Bupa logo

£823.97

£4,119.84

Vitality logo

£1,332.94

£6,664.68

BitWare Ltd, Manchester

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.

It’s obvious to say that the cost of a Business Health Insurance policy will go up when you add more employees to the scheme, but not many people know that the cost of cover per employee actually goes down when you add more people to the policy.

Insurance Provider

Average Per Employee
(Annual)

Total Premiums
(Annual)

Aviva logo

£467.86

£35,557.20

Axa logo

£572.53

£43,512.31

Bupa logo

£541.86

£41,181.36

Vitality logo

£619.14

£47,054.28

Nadeem Farid Head of Employee Benefits at Drewberry

The prices per employee above 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, so it’s best to contact an expert for personalised quotes tailored to your employees to get an accurate idea of what you can expect to pay for your cover.

Nadeem Farid
Head of Employee Benefits at Drewberry

With the right policy options, employers can reduce the cost of Group Health Insurance while still keeping a high level of cover.

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

6 Week Wait

Outpatient Cover

Hospital List

Additional Cover Options

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.

 

Francis Webster, Health & Wellbeing Expert at Drewberry

While a smart choice in options can reduce the policy premiums, choosing to be too frugal with your cover can leave your employees lacking and been unable to take advantage of the benefits this insurance product is supposed to offer.

The key to finding the right policy is striking the right balance between affordable and comprehensive. To do this, employers need to first understand the needs of their employees and that process can start with a simple survey like our 2018 Employee Benefits Survey.

Francis Webster
Health & Wellbeing Expert at Drewberry

Getting Advice

Need Some Help?

Emma Wilson Employee Benefits Expert at Drewberry

We help businesses of all sizes throughout the UK set-up and manage their corporate health insurance schemes. Rather than you having to contact each provider separately and do all the chasing, our experts can compile quotes from the top providers and find you the most competitive policy for you and your employees.

If you would like some help please do not hesitate to pop us a call on 02074425880.

Emma Wilson
Employee Benefits Expert at Drewberry

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