Director Health Insurance provides a business owner with access to private medical treatment. This means you bypass any lengthy NHS waiting list and get medical attention just when you need it most. With few directors and contractors wanting to rely on sick pay from their business, it’s usually vital they get back on their feet and earning again as soon as possible.
Treatment for all health concerns is broadly split into:
All private healthcare insurance covers inpatient and day-patient treatment as standard. This means all policies cover surgical procedures. However, outpatient cover is an optional extra at additional cost.
You don’t have to add outpatient care to your plan if you don’t want to. Yet if you don’t, you rely on the NHS for all diagnostic tests and procedures. This could delay access to private inpatient care.
In the medical world, there are two main types of health conditions you could develop:
Medical Insurance will only cover acute conditions. For all ongoing management of chronic conditions, you’ll continue to receive NHS care.
Many Health Insurance plans include cancer cover as standard. It’s one of the most valuable aspects of any PMI plan as it can provide access to drugs, therapies, treatments and procedures the NHS may not yet offer due to cost.
Cancer care generally includes:
Particularly popular among our busy contractor and company director clients is the fact that Health Insurance offers access to digital GP services.
To combat growing waits for NHS GP appointments and the need for you to fit them around your working life, insurers introduced remote GPs. These offer telephone or video consultations with a UK-registered GP from your smartphone.
You can usually book an appointment 24 / 7 and have your consultation wherever and whenever suits you. The digital GP can do everything your own GP can, from offering medical advice to issuing prescriptions and making referrals for further private healthcare under your plan.
As a company director, we know how busy you are. What’s more, your company no doubt relies on you firing on all cylinders. A health problem can therefore throw a serious spanner in the works.
In some cases, NHS waiting lists mean you may not be able to start treatment for weeks. For example, at the end of July 2020, there were 4.05 million people on NHS waiting lists in England. 2.15 million of these patients — more than half — had been awaiting treatment for more than 18 weeks. 83,203 had been waiting more than a year.
Insurers examine a range of factors when setting your premiums. For example, they’ll look at your:
To calculate the cost of PMI in the table below, we’ve have obtained the most competitive quote from the leading insurers and assumed the policyholder is:
30 Year Old
40 Year Old
50 Year Old
40 Year Old Couple
Parents Age 35, Children Age 13 and 11
Yes, if you’re concerned about premiums then it is possible to adjust your plan to reduce the cost of cover.
ADVISER TIP 🤓
Most ways to reduce premiums impact on how comprehensive your policy will be. We therefore feel it’s important to discuss your options with an adviser so you don’t inadvertently adjust your plan in a way that limits the scope of cover.
As mentioned, outpatient cover is an optional extra for an additional cost. Removing it entirely will cut costs. However, it means you’ll have to rely on the NHS for all outpatient diagnostic tests and scans, which could delay access to fast inpatient care.
We therefore tend to recommend retaining at least some outpatient cover on your plan.
One way around this is to limit your outpatient cover. This sees your insurer place a fixed monetary limit — usually £1,000 — on the amount of outpatient care it will pay for per policy year. This is known as a mid-range plan.
An excess is the amount you agree to pay upfront towards your health care before your PMI kicks in to cover the rest. In most cases, you pay the excess once per policy year.
The higher your excess, the lower your premiums will be as you’ll be meeting a greater amount of the cost of private healthcare yourself.
Excesses start at £100 and go all the way up to £5,000 depending on the care you need and the provider you choose.
With this option, before granting authorisation for inpatient private medical care, your insurer first examines the NHS waiting list in your area.
If the waiting time for that treatment is longer than 6 weeks, or the NHS doesn’t offer the procedure you need, you receive care privately.
If, on the other hand, the waiting list is under 6 weeks you have your care under the NHS.
Note that this only applies to inpatient care. If you add outpatient treatment to your plan, your insurer will take care of this privately as normal.
Your hospital list decides which facilities you can have treatment in. Depending on your provider, you may have the option to either reduce your hospital list to cheaper facilities or expand it to include some of the top private hospitals in London.
The more comprehensive your list and the pricier the facilities included on it, the more you’ll pay in premiums.
Yes, your limited company can pay for your Health Insurance.
There are two ways it can do so:
For Business Health Insurance, you’ll need at least 3 members of staff. With many of our clients operating as solo limited company directors or otherwise running a small business, we know this isn’t always a viable option.
The other route is for you to run your Private Medical Insurance policy through your company.
Here, your company pays premiums on your behalf. Thanks to corporation tax relief, this typically works out marginally cheaper than paying for a policy personally from income HMRC has already taxed.
Medical insurance is a P11D / Benefit in Kind when your limited company pays for it. This means it’s a benefit that HMRC effectively sees as bumping up your take-home pay without you paying any additional tax.
As an individual, you’ll therefore have to pay personal tax on the premiums your company is paying for you. Meanwhile, the company will have to pay employer’s national insurance contributions at 13.8% on the premiums.
You’ll need to report your private health insurance policy to HMRC at the end of each payroll year as part of your P11D submission. HMRC then reduces your personal allowance to account for the additional tax due.
IMPORTANT NOTICE 🧐
We recommend speaking to your accountants before running your Health Insurance through your limited company to check your personal tax position. Tax treatment is dependent on individual circumstances and is subject to change.
There are two underwriting options available for personal Health Insurance: moratorium underwriting and full medical underwriting.
Which one is best for you depends on your medical history — not just on the conditions you’ve had but also how severe those conditions were.
It’s critical you get this right, so if you have a pre-existing medical condition don’t hesitate to pop us a call on 02074425880 for help and advice.
This is the most common form of underwriting. Moratorium underwriting means your insurer will usually exclude any medical complaint you’ve had advice, medication or treatment for in the past 5 years.
This will typically be on a 2 year rolling moratorium basis. This means your insurer will consider coverage for that pre-existing condition if you spend at least 2 years on the plan without receiving any medical attention for that condition.
With full medical underwriting, you fill in a form declaring all pre-existing conditions when you take out your plan. The insurer will then typically exclude those conditions.
While this means you’ll understand your coverage from the beginning, there’s usually very little opportunity to get the exclusions removed.
Conditions you had more than 5 years ago usually aren’t taken into account when insurers underwrite you on a moratorium basis. However, they will most likely be considered when you choose full medical underwriting.
Although there are a few specialist insurers the majority of the UK market is made up of five major providers:
Where the cost of cover depends on a variety of factors including your age, location and medical history it is important to compare quotes from all the leading insurers to make sure you get the best deal.
Private Medical Insurance renews on an annual basis. Every year, your insurer will write to you about your premiums for the upcoming year.
You may find that your premiums rise. This is typically down to medical inflation, the largest component of which is covering the increasing cost of the latest, cutting edge medical advances, drugs and treatments.
If you’re unhappy with your premiums and want to review the market to ensure you’re still getting the most competitive deal, your adviser will be happy to help. Just as when you first took out the plan, we’ll compare the whole market on your behalf.
Then, if we find that another insurer is offering lower premiums, we’ll be able to assist in switching you with the right underwriting terms so you get vital continuity of coverage.
If you buy a UK Health Insurance policy, it’s rare the plan will cover you while you’re travelling abroad as standard. UK policies provide private medical treatment in the UK only.
You can add international cover to some policies for an additional premium, but not every provider will offer this option.
Your alternative is to buy International Medical Insurance. Global Health Insurance is far more comprehensive than a UK-only policy, as a domestic UK plan is only designed to supplement the healthcare the NHS provides.
A global policy, on the other hand, is designed to meet all your healthcare requirements while you’re abroad. It therefore covers scenarios such as routine maternity care, emergency treatment and often chronic conditions.
PMI is already fairly complex due to all the ins and outs and options to choose. However, this becomes especially apparent for company directors, who must choose whether to buy a plan personally or pay for it through their limited company.
We started Drewberry™ because we were tired of being treated like a number.
We all deserve a first class service when it comes to issues as important as protecting our health. Below are just a few reasons why it makes sense to talk to us.
If you are wanting to review or set-up a new director or company health insurance policy give us a call on 02074425880 or email email@example.com.
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.