The ultimate guide to company health insurance plans for employees

Valentina GolubovicValentina Golubovic
Last updated on:
January 4, 2023
Published on:
December 21, 2022

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The number of people in the UK willing to pay for private medical cover has doubled since the pandemic. Company health insurance plans can be a major benefit for employees, providing them with access to affordable medical care and protection against unexpected health expenses.

What is private health insurance?

Health insurance is a type of insurance that covers the cost of medical services. Paying a small excess, it helps to cover the cost of medical care such as doctor visits, prescription medications, hospital stays and various other treatments and procedures. It can also provide access to preventive care services, such as screenings and vaccinations, which can help to keep you healthy and prevent the need for more costly medical treatment in the future. 

ABI reported that in 2018, around 6% of the UK was paying for some sort of private medical insurance. Given this was before the pandemic, the percentage of the population contributing to private medical insurance is likely to be much higher.

What is covered?

Usually, private medical insurance covered the following:

- Access to GP

- Treatment in a private hospital

- Scans, tests and x-rays

- Dental care

- Optical care

- Physiotherapy

- Mental health support

What isn't covered?

The following are usually not covered under a standard insurance policy:

- Emergency care

- Treatment for pre-existing conditions

- Treatment abroad

- Chronic illnesses

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The benefits of going private when it comes to healthcare

Due to the extensive pressure the NHS is under, private healthcare guarantees a better quality of service. Obtaining treatment and care under the NHS can often take months due to increased demand and supply constraints. Depending on the treatment required this can be extremely uncomfortable and costly for an individual. Going through a private will avoid NHS waiting lists and help access treatment quicker, which is why many are forced to take this option. 

Obtaining a diagnosis and receiving treatment sooner can have a significant impact on an individual's quality of life.

How much does health insurance cost?

The average cost of medical insurance is £85 a month or £1020 per year. This can vary depending on your age, any pre-existing conditions, your family's medical history, smoker status, whether you had made any claims and other factors.

Business health insurance is a benefit-in-kind, which means that although employees don't directly pay for it, their income tax increases as a result of this benefit.

For the employer, the cost can vary depending on the factors mentioned above. small business health insurance can help you reduce your tax bill as it is a tax-deductible expense.

Why do companies offer health insurance?

Having corporate health insurance has significant benefits not just for your employees but also for your business. The ONS reported that in 2021 an average of 4.6 days per employee were taken as sick days. If your business had just 5 employees, this equated to approximately a month's work lost due to sickness. Access to private healthcare means that employees can be seen much quicker and a long-term illness can be prevented, improving productivity.

A survey by CIPHR found that 1 in 14 adults feel stressed every day, 79% feel stressed at least once a month and a typical UK adult feels stressed approximately 8.27 days a month. When asked about causes of stress, 18% said the workload was contributing factor as well as money and health. In an age where mental health issues are prevalent, a health insurance policy would provide employees with easy access to mental health support when and if needed, helping to prevent burnout.

The last thing you want your employees to worry about is their health. To ensure that your workforce is productive, healthy and happy, providing private medical insurance as a benefit will help you to attract and retain talent as well as improve the general health of your workforce.

3 Common Health Insurance providers

As a business owner, HR staff or operation staff, you may be wondering which provider to go with.

Below are the top health insurance providers in the UK:

- Aviva

- Vitality

- Bupa

Those are the big, established health insurers however there are many smaller providers in the industry that could be worth looking into. Using comparison websites can help to find an affordable small business health insurance provider for your company.

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