How health insurance works for contractors

Health insurance  is designed to allow you to get the treatment you need quickly. As a self-employed contractor, you probably don't get sick pay. While you wait for treatment on the NHS, a lengthy absence from work is the last thing you need. Health insurance pays for private treatment and speeds up your access to high-quality medical care. There's a wide range of options on the market, so you can choose the right policy for you in terms of cover and affordability. When you become ill or sustain an injury, you simply contact your health insurance provider to make a claim and arrange the treatment you need.

Contractors reviewing health insurance in the UK
UK-based self-employed contractors can benefit significantly from private health insurance

Why is health insurance important to contractors?

The main benefit of health insurance for contractors working in the UK is that it helps you get back to work more quickly, giving you much-needed protection should the worse happen and you suffer a serious illness or require hospital treatment. A musculoskeletal condition might affect your ability to sit at a desk, so you have to reduce your working hours until you've recovered. Other conditions could affect your ability to concentrate and carry out complex tasks which carry a higher day rate or project fee. We'd all like to think we're indispensable, but would your clients wait for you to recover or would they need to find a replacement?

It's worth thinking about how much time you can afford to take off work before your income suffers. The statistics on NHS waiting times show that 65.5% of patients are still waiting for treatment 18 weeks after their initial referral

Of course, there's no way to predict how any health condition will affect your work long term, so it may also be worth considering taking out income protection insurance which will give you financial support should you need it.

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The cost of private medical treatment

You might think that health insurance sounds like a good idea but still hesitate over the cost of a monthly premium. It's worth remembering that you don't need insurance to access private treatment in the UK. You can still see your GP for primary care, visit an NHS consultant for diagnosis, and then opt for private treatment as a next step. The question is, what might you expect to pay?

The cost of your treatment depends on several different variables. Unsurprisingly, the price is likely higher if you're treated in London. The nature and complexity of the procedure will also have an impact. A consultant with years of experience will come at a higher price than someone more junior. Treatment costs can vary between hospitals and treatment centres depending upon their level of investment in the latest equipment, medicines and staffing costs.

Broadly speaking, the average cost of private surgery ranges from around £1,500 to £2,500 for simple procedures like carpal tunnel release, wisdom tooth removal or cataract surgery. The most complex operations are inevitably the most costly, with shoulder, hip or knee replacement costing between £11,000 and £13,200 on average.

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Core benefits of health insurance

Avoiding loss of income isn't the only benefit of health insurance if you're a contractor. You have a busy life, and private healthcare lets you choose when and where you're treated, so it fits around your other commitments. Ill health and stress can harm your overall well-being, and your health insurer can provide you with helpful resources to support you. These additional services can include access to a virtual GP, mental health support or resources, discounts and rewards that help you improve your overall health and prevent illness.

Most of the best health insurance providers in the UK offer cover for musculoskeletal conditions, cancer care and mental health support, and various other conditions and treatments - including access to drugs that aren't routinely available on the NHS. You'll also find a range of optional extras so you can tailor your health insurance to suit you. A family member's illness or injury can affect you as much as your own. Some insurers allow you to add your family to the policy for free or at a reduced cost so that you can offer the same benefits to them and reduce everyone's stress levels. 

Benefits of health insurance for contractors:

  • Be treated at a time that suits you
  • Choose where you're treated
  • Choice over who provides your treatment
  • Avoid NHS waiting lists and get back to work sooner
  • Get mental health support when you need it
  • Access to private GP services (many of which are available 24/7)
  • Access to drugs not routinely available on the NHS
  • Discounts and rewards
  • Protection for your family
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What's covered by health insurance?

The exact health cover you receive will depend on the insurance provider and the policy you choose. Typically, you'll be offered cover for inpatient and day-patient treatments and surgery, with things such as outpatient diagnosis and physiotherapy often being optional extras. Most health insurers will also pay for cancer care, although this is sometimes only offered as an optional extra. The leading health insurance providers will also include mental health treatment and additional mental health support that you can access when you need it, without a GP referral. 

It's important to remember that health insurance only covers acute conditions, which a course of treatment can cure. On the plus side, it enables you to recover quickly and get back to work.

What's not covered?

We've already mentioned that most private healthcare only covers acute conditions. It probably won't come as a surprise to learn that most chronic illnesses are excluded. If you have a long-term health condition like diabetes, asthma or angina that can't be cured but needs ongoing management, your health insurance won't cover it.

Pre-existing conditions are also excluded, with most policies excluding anything you've sought medical advice or treatment for in the last five years. These may not be excluded permanently, however. There's often a moratorium period of two years on most policies, meaning that if you haven't had treatment for a condition within that time, your insurer may offer cover in the future. 

Some insurers have a lengthy list of exclusions, so it's always worth checking the details, especially if you have any particular health concerns or risks. Apart from chronic illnesses and pre-existing conditions, health insurers will typically exclude the following:

  • Treatment for addiction
  • Cosmetic surgery or other purely cosmetic procedures
  • Pregnancy and maternity cover (although some will offer cover for complications related to pregnancy, which helps if you can't return to work or need to take maternity leave earlier than you'd planned)
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Best health insurance for contractors in the UK

In this section, we highlight the eight best health insurance providers in the UK, with each of them offering excellent cover depending on your individual needs and budget. 

1. WPA

WPA offer, in our opinion, the best contractor health insurance as they give a 20% discount to self-employed people and professionals. They offer excellent customer service with straightforward claims via their app. Their two flexible policies offer superb cover with cancer care and a comprehensive list of hospitals and treatment providers. The only downside is that you can't get cover if you're over 65.

2. The Exeter

The Exeter is a friendly society and offers a community-rated scheme that extends to policyholders aged between 70 and 80. Their core policy includes outpatient surgery, cancer and mental health care and can be tailored with a range of optional extras. They're among the highest-rated insurers for customer satisfaction and paying out on claims, which could be important when you want to access treatment and get back to work. That may not matter to you now but is worth bearing in mind if you want a policy with longevity.

3. Axa Health

AXA Health's health insurance gives you access to inpatient and day-patient care as standard, with a choice of over 250 private hospitals. Cover for outpatient treatment is provided as an optional extra. This gives you the flexibility to tailor your policy, and the cover itself is generous. There's also no limit on the number of physiotherapy or chiropractic sessions, which could be appealing if you work in a physically demanding business.

4. Freedom Health Insurance

Freedom Health Insurance gives you comprehensive core cover with no restrictions on consultant choice. Your premium isn't based on your postcode, and they guarantee that your premium won't increase in the first two years, which should help you with budgeting. There are also lots of optional extras, including outpatient care. They also provide cover for pregnancy complications, which can potentially significantly affect your working life.

5. Bupa

Bupa is one of the UK's best-known health insurance providers. Their comprehensive policy includes everything you might expect as standard, including cover for mental health care. When you take out a policy with them, you also access an extensive network of private hospitals and clinics. There's no age restriction, and they offer an impressive range of rewards and discounts to their members.

6. National Friendly

National Friendly isn't a name you might recognise, but they have a straightforward and friendly approach to health insurance. They offer flexible policies with comprehensive cover and an excellent choice of hospitals. They guarantee that your premium won't increase during the first five years of your policy, which could be appealing if budget is a key factor for you. There are some limits on diagnostic tests and some cancer treatments, but they generally know how to look after their policyholders.

7. Vitality

Vitality is known for its innovation and commitment to promoting a healthy lifestyle amongst its members. Join Vitality without any pre-existing conditions in the previous three years, and you'll receive a 10% discount on your premium, with continuing discounts if you stay healthy (and can prove it). They also offer comprehensive cover, including a promise to pay all of your hospital bills.

8. Aviva

Aviva's Healthier Solutions policy is comprehensive and includes both inpatient and outpatient care in hospitals and clinics across the UK, although you are limited to the experts that Aviva chooses for you. You'll benefit from comprehensive cover, including cancer care, access to a digital GP and a 24-hour stress counselling helpline. It's great for the budget-conscious as they offer many ways to reduce your premium.

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As a contractor, do you need health insurance?

Here's why health insurance could benefit you as a contractor.

  • You can bypass NHS waiting lists and get treatment quickly.
  • You'll get back to work sooner and potentially avoid a significant loss of income.
  • You can access treatment at a time to suit you and your busy schedule.
  • Health insurance can provide resources to help you look after your health and well-being.
  • Some providers allow you to add family members to your policy.
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Frequently Asked Questions

How much does health insurance cost for a contractor?

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The cost of your policy will be based on a large number of factors, from your age and location to the level of cover you choose. We recently conducted some research into the average cost of health insurance in the UK, and here is a summary of our findings:

Average cost of health insurance by age
Applicant age Restricted Consultant Access Unrestricted Consultant Access
20 years £32.84* £40.65*
30 years £43.98* £52.96*
40 years £55.24* £65.85*
50 years £72.44* £84.13*
60 years £101.89* £123.91*
70 years £163.81* £195.79*
Source: myTribe Insurance

*Average based on quotes from eight leading health insurers in 10 UK cities. We opted for a comprehensive policy, with a £250 excess (or as close as possible), outpatient cover limited to a maximum of £1,500 in claims per year, and we included therapies cover. We defaulted to each provider's standard hospital list and used moratorium underwriting. Mental health cover, dental, optical and travel cover were all excluded. Prices accurate as of 16th February 2022. Please note these prices are purely illustrative; the cost of your policy will be different. Aviva, Axa, Bupa and Vitality offer discounts if you opt for "guided consultants", which gives you less choice over who provides your treatment. Not all insurers offer this, so we opted to include both guided and non-guided prices in our research.

*Average based on quotes from eight leading health insurers in 10 UK cities. We opted for a comprehensive policy, with a £250 excess (or as close as possible), outpatient cover limited to a maximum of £1,500 in claims per year, and we included therapies cover. We defaulted to each provider's standard hospital list and used moratorium underwriting. Mental health cover, dental, optical and travel cover were all excluded. Prices accurate as of 16th February 2022. Please note these prices are purely illustrative; the cost of your policy will be different. Aviva, Axa, Bupa and Vitality offer discounts if you opt for "guided consultants", which gives you less choice over who provides your treatment. Not all insurers offer this, so we opted to include both guided and non-guided prices in our research.

Which health insurance providers is best for contractors?

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For most contractors, WPA, The Exeter or Axa Health will be the best choices, but other providers could be a better fit in some cases. To find out which is the best for you, please request a comparison quote.

Can I put health insurance through my business?

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Yes, you can put your health insurance through your business, however, it's not always the best way of doing it. Usually, if it's just yourself and your family, you'd be better to pay for it personally, although there are some exceptions. When you request a comparison quote through us, you'll get free advice from an expert health insurance adviser who will help you find the best way to buy it.

Is private medical insurance an allowable expense?

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Yes, health insurance is tax-deductible, however HMRC class it as a P11D benefit in kind, meaning you'll need to pay income tax on it.

Is private health insurance a P11D Benefit in kind?

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Yes, private health insurance is seen as a P11D benefit in kind in the UK, meaning it'll contribute to your personal tax bill.

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