Small Business Health Insurance

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WPA LogoFreedom LogoCS Healthcare LogoGeneral Medical Logo
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The Exeter LogoAXA PPP Healthcare Logo
WPA LogoGeneral Medical Logo
CS Healthcare LogoFreedom Logo
Aviva LogoVitality LogoAXA PPP Healthcare LogoBupa LogoThe Exeter LogoWPA Logo
CS Healthcare LogoFreedom LogoGeneral Medical LogoHealth Online Logo

What is company health insurance?

Company health insurance gives your employees access to private healthcare in the UK should they ever need it. By avoiding potential delays on NHS waiting lists and having more treatment options, they’ll be better and back to work as soon as possible.

Do we need small business health insurance?

Health insurance is one of the most sought after paid benefits from prospective employees. Providing medical insurance to your team will protect them should the worst happen, but also demonstrates your commitment to their health and wellbeing.

Benefits of business health insurance for employees:

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    Access to high quality treatment at a time that suits them
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    They’ll be seen quicker and avoid potential delays on NHS waiting lists
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    Choice over treatments and specialists
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    Access to medicines which may not be available on the NHS
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    Mental health protection and help managing stress

Benefits of business health insurance for employers:

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    Reduce absenteeism, get unwell employees back to work sooner
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    Stand out in the employment market by providing a sought after benefit
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    Lessen employee turnover and improve staff retention
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    Look after your staff and create a culture where every employee’s wellbeing is important
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What does business health insurance cover?

Like private medical insurance, business health insurance will only cover acute conditions, meaning those which can be cured with medical treatment. Chronic conditions, which aren’t curable, or conditions for which you’ve recently received treatment for, won’t be covered.

Inpatient treatments - included as standard in most policies

Basic health insurance will typically cover the treatment of acute conditions where a hospital bed and overnight stay is required -commonly called inpatient treatment. While this gives your employees access to potentially faster treatments, they would still need to be diagnosed through the NHS first.

This isn’t always an issue, but if there is a waiting list for a certain diagnostic test and your team member’s problem is deemed as non-urgent, they could find themselves waiting for diagnosis and therefore have their treatment delayed.

Outpatient diagnosis and treatment

Outpatient diagnosis and treatment covers the cost of initial investigations and tests into acute conditions and treatments where an overnight hospital stay isn’t required. The level of outpatient cover you provide your staff is up to you, but as you would expect, the more you provide, the higher the premiums will be. You could choose to include outpatient cover in full; limit it to a cash value per year (typically £1000) or exclude it entirely to keep the cost of the policy down.

Comprehensive cover will of course vary from provider to provider, but essentially it will give your staff full access to both in and outpatient treatments, alongside private diagnostics and testing, to establish a diagnosis quickly.

Why small businesses benefit most from private medical insurance

Most large corporations provide health insurance to their employees and it has almost become standard practice for them have policies in place. But it’s actually smaller businesses that can benefit most from company medical insurance. These are the top benefits of health insurance to small businesses:

Reduce staff absenteeism

If you have a small workforce and one of your key team members is signed off for even a short period of time, it can seriously affect the performance of the business. Business health insurance helps get your team better quicker, reducing disruption and keeping the business on track.

Attract new employees

While it may be common for large employers to offer private medical insurance to staff, it isn’t widespread amongst smaller businesses. That means there is an opportunity to stand out from the crowd, demonstrate your commitment to your people and hopefully attract the brightest talent.

Reduce stress

Stress in some form is inevitable today, and it’s likely members of your team will suffer from stress or other mental health issues at some point. Many small business health insurance policies include mental health support as standard and others give you the ability to add it as an optional extra.

Small Business Health Insurance

How is small business health insurance taxed?

Small business health insurance is paid for by the company with pre-tax profit. Most often, the cover is a business expense and not liable for corporation tax. Health insurance is, however, a P11D/benefit in kind for the employee receiving it. That means that the employers are required to fill out a P11D form and declare it to HMRC, with employees then being taxed accordingly.

How much does small business health insurance cost?

The cost of your company’s medical insurance policy will be impacted by a number of factors which we have detailed below. Some of these you will have control over, whereas others you won’t.

Cost of health insurance for a small business

The cost of cover will vary depending on a range of factors, but we want to give you an example so you can get a ballpark idea of costs. Assuming there is £1,500 outpatient cap, a £100 excess on the policy and a mid-tier hospital list, you could expect to pay around £60 per employee-per-month for a 10 employee company and around £40 per employee-per-month for a 50 employee company. As we say, there are many variables which will affect this price so please take it as just an example and speak to us to get your own quotes.

The main factors affecting policy cost (click to expand)

Private medical insurance for a business owner

For small business owners, directors and single employees, you can take out a policy which is paid for through the business and treated as a P11D benefit. Often, the company director is an invaluable asset within the small business and therefore ensuring that he or she is firing on all cylinders is vital.
Private medical insurance for business owner

The main types of company health insurance underwriting

We previously mentioned that underwriting is a significant factor in the price of your company’s health insurance policy, in this section, we outline the three main types of underwriting and their associated benefits and disadvantages.

Full Medical Underwriting (FMD)

Full medical underwriting is often the cheapest option for companies looking to arrange health insurance. It involves each of your employees completing a detailed medical questionnaire and in some cases, the insurer writing to your employees GPs to gain an accurate understanding of their medical history. The great thing about full medical underwriting is that everyone knows exactly what is or isn’t going to be covered up front. The insurer will clearly point out when an employee’s historical condition leads to an exclusion and will equally be open to discuss and review those exclusions at a later date. The drawback of full medical underwriting is that it is extremely time consuming and unless you have less than five employees, it’s a route we would tend to advise against.

Moratorium Underwriting

Moratorium underwriting is the most common type of both company and private medical insurance underwriting. The reason for that is the insurer effectively defers the underwriting process until such time a claim is made. Moratorium underwriting will cover your employees on the basis that any pre-existing conditions which have been present in the past five years will be automatically excluded. In the event of a claim, the insurer will look at your employees’ medical history to determine whether or not they will pay the claim. This approach is often far more attractive to small businesses, as the amount of paperwork and the time it takes to get a policy in place is significantly reduced. However, it does mean that your staff won’t know if they are covered until such time as they make a claim. As we mentioned, it is the most commonly used but it is important to understand its limitations.

Medical History Disregarded (MHD)

Medical History Disregarded does as the name suggests and disregards your employees’ medical history and covers them for acute conditions, regardless if they are pre-existing. Typically, only companies with 20 or more people on the scheme can access this type of underwriting and as you would expect, the cost of these policies tends to be higher due to the increased risk.

What’s not covered by business health insurance

The conditions which are and aren’t covered by business health insurance will differ depending on the policy chosen, however, you will find with most policies, the following will be excluded:

These are the most common exclusions but you should always check your policy documentation to find out exactly what your insurer will cover you for.

Typical exclusions (click to expand)

Get free quotes and expert advice from myTribe

Health insurance for small businesses can be a complicated subject, and one that you can end up spending a lot of time researching to get the right policy. myTribe provides a completely free service to small businesses, reviewing the leading insurers on your behalf and then providing you with our expert impartial advice.
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Benefits of our service:

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    It’s free of charge and you’ll get the best prices currently available
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    Our advisors are experts in health insurance and will save you time
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    Our advice is impartial and independent -we aren’t tied to a single insurer
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Small Business Health Insurance FAQs

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