Personal Finance and Healthcare Expert
Health insurance for companies is becoming increasingly popular in the UK and is seen as a valued benefit by employees. Once considered a benefit of working for large corporate businesses, health insurance today is accessible to businesses all size and description. In this article, we explain everything we think you need to know about company health insurance.
Company health insurance works by giving your employees access to private healthcare treatment options should they become unwell with certain illnesses. By receiving treatment privately, your team can avoid potential delays on the NHS and be back to work sooner. All health insurance policies, whether they are for business or for private individuals, will only provide treatment for illnesses which are deemed to be acute and curable - chronic illnesses which can't be cured are usually excluded. Of course, what is and isn't covered by your policy will depend on your provider and the terms you've agreed.
There's a huge range of benefits of company health insurance, both to the individual and to the employer. Employees can expect all of the following:
As for you as an employer, there are a number of benefits you'll enjoy. Firstly, you can expect a reduction in staff absenteeism, with employees coming back to work sooner from illness. Secondly, as private health insurance is seen as such a valuable benefit. You'll likely reduce employee turnover and improve staff retention. Finally, by providing a benefit like this, you'll stand out in the recruitment market as an employer that values their staff and wants to look after them.
As we've already mentioned, company health insurance will only cover acute conditions which are curable - chronic conditions won't be covered on your policy. In addition, and in most cases, pre-existing conditions won't be covered either, unless you've opted for the more costly "Medical History Disregarded" underwriting. That means that if your employees have sought any medical treatment or even advice for a certain condition in recent years, that condition will be automatically excluded.
A workplace medical insurance policy will usually cover:
All private health insurance policies cover the cost of treating conditions where a hospital bed is required overnight and usually for a day too. In-patient and day-patient treatments form the foundations of all health insurance policies.
One of the disadvantages of only having this level of cover and not opting for outpatient cover too is that when one of your team becomes unwell, they will usually need to be diagnosed through the NHS before being referred privately for treatment. What that can mean is that private treatment can be delayed by the employee needing to wait for diagnosis. To avoid this, we'd recommend taking out a more comprehensive cover, as we've explained in the next section.
To avoid your employee's treatment being delayed by diagnosis on the NHS and to give them a broader range of benefits, you can opt for more comprehensive insurance and have out-patient diagnosis and treatments included too. This means that should your employees become unwell, they will almost always be referred directly from their GP to private healthcare for diagnosis and then treatment. The best private health insurance in the UK will always include comprehensive out-patient cover.
Small business health insurance covers a wide range of illnesses and treatments, but it won't cover everything. In this section we look at what isn't covered under a company health insurance policy:
Of course, what is and isn't covered by the insurance companies will vary from provider to provider and indeed policy to policy, so it's always work speaking to a health insurance broker to ensure your policy covers everything you'd expect.
The cost of company health insurance will, of course, vary from business to business. To give you an example though, and making a few assumptions, if there is a £1,500 outpatient cap, a £100 excesses on the policy and a mid-tier hospital list, you can expect to pay anywhere from £40 - £80 per employee per month for a comprehensive policy.
Some of the factors that will affect the cost of your premiums are:
As we've mentioned, one of the most significant choices you can make when it comes to your small business health insurance is whether you have basic cover, which only includes in-patient treatments, or if you wish to extend the cover and include out-patient cover too. That is just one of the choices you'll need to make - in this section we look at some of the other considerations you'll need to think about and discuss with your broker.
Your excess is the amount of money your employees will need to pay towards a claim before the policy covers the rest. Excesses typically are per annum, although some providers will impose them on a per claim basis. Adding an excess can dramatically cut the cost of your premiums but do rely on your employees being able to afford them should they need treatment. Small business health insurance excesses typically start from £100, although it is possible to not have one at all if you so wish.
Not all policies will include mental health cover as standard but almost all will allow you to add it as an optional extra. Psychiatric care is one of the most sought after benefits of small business health insurance, but it's also one of the most expensive to add. When your broker is looking at policies with you, be sure to ask whether this is included or if it's going to be an optional extra.
Most business health insurance policies will include surgical procedures such as cataract removal or wisdom tooth extraction, however, routine dental and optical treatments are usually excluded. You can opt to include routine checkups and eye tests for a small additional fee on your premium.
The 6-week NHS wait option is a way of reducing the cost of your premiums by agreeing that if treatment is available within 6 weeks on the NHS, then your employees will opt for that rather than going privately. It's useful if you're looking to bring down the cost of your healthcare cover, but it also undermines one of the core reasons for having private health insurance.
Finally, some employers will also choose to cover family members, or at least allow staff to add them to the policy for a small fee. For many employees, having the option of including family members and especially children is hugely valuable, so while it might be an expensive perk to add, it's something that should be considered seriously.
As an increasingly popular type of business insurance, it's one that we recommend to many of the small businesses we work with, and there are a good number of reasons why you might introduce it in your workplace.
While we are very fortunate to have the NHS in the UK, it's also true that it's under immense strain, especially because of the Covid-19 pandemic. There were over 4.24 million people on NHS waiting lists at the end of March 2020 and more than 1 in 5 such people had been waiting for more than 18 weeks for treatment.
For many companies that put the health and wellbeing of their staff first, statistics like these can give them the impetus to invest in healthcare cover.
We hope that you found this guide useful - if you'd like to get a quote for health insurance for your company or have any questions, please complete our quote form and one of our brokers will be in touch with you shortly. Small business health insurance continues to be one of the most popular products we advise on as an increasing number of businesses want to provide medical insurance for their team.
Disclaimer: This information is general and what is best for you will depend on your personal circumstances. Please speak with a financial adviser or do your own research before making a decision.
Kirsty is a personal finance and healthcare expert who enjoys demystifying legal and insurance topics for a wider audience. She’s a former solicitor with a personal injury and insurance background.
Save up to 37%* on your insurance by comparing policies
*Based on 461 quotes between 01/22-01/23
