How to lower reduce health insurance premiums (6 ways to lower costs)

1. Increase your excess
2. Review optional extras
3. Reduce out-patient cover
4. Review your hospital list
5. Add a 6-week NHS wait
6. Speak to a health insurance broker
   

Business health insurance is a valuable benefit for your employees. It gives your team access to private healthcare when they need it, allowing them to effectively bypass NHS waiting lists and receive high-quality treatments.

Fortunately, there are several ways businesses can reduce their premiums to make sure the policy remains affordable.

How To reduce business health insurance premiums

The cost of your business health insurance will depend on various factors, some of which you’ll have control over and others you won’t. Factors such as the age of your employees and where your business is located of course can’t be changed easily.

In this article we explain six ways you can control the cost of your company health insurance, allowing you to make your policy more affordable.

Increase your excess

Certain insurers will have a standard excess that’s included in the policy, but you’ll also find that many providers will give you the ability to set an additional optional excess to a value of your choosing. 

By increasing the policy’s excess, your employees will need to pay more towards their treatments, which in turn will reduce the costs to the insurer and your premiums. As a consequence, premiums can be lowered significantly but we’d always recommend exercising some caution before doing this.

Remember to keep the excess at an affordable level

Ramping up the excess will, of course, bring your premiums down, but by doing so you are effectively reducing the benefit the employee receives. Ultimately you want the employee to be able to afford private medical treatment should they need it, so ensuring that the excess remains affordable is key.

Increasing the policy’s excess means that employees will cover more of the costs of their treatments, reducing the insurer’s upfront bill per treatment or per policy year, depending on how your excess works. As a consequence, premiums can be reduced considerably if a higher excess is chosen.

Review policy extras

Of course, all of these options can be very useful, but adding them to your policy will increase your premiums. It’s worth checking with your employees which of the add-ons they might value as you may find that certain parts of your cover isn’t being utilised and can be removed without issue.

• Alternative therapy cover - Cover for treatments such as acupuncture and homeopathy
• Dental and optical cover - Cover for dental accidents and routine expenses
• Extended cancer cover - Contributes more to the costs of treatment and expands on cover
• Mental health cover - Covers in-patient and out-patient psychiatric treatments and / or therapies
  

Of course, all of these options can be very useful, but adding them to your policy will increase your premiums. It’s worth checking with your employees which of the add-ons they use and value as you may find that certain parts of your cover isn’t being utilised and can be removed without issue.

Reduce group outpatient cover

Company health insurance provides cover for three different types of treatment:

1. In-patient - included in all policies, it covers the cost of treatments which require an overnight stay
2. Day-patient - requires the use of a hospital bed but not an overnight stay - also usually covered in most policies
3. Outpatient - in most cases offered as an optional extra, it covers the cost of treatments which don’t require an overnight stay or a hospital bed.
   

All health insurance policies will cover in-patient treatments, with most also covering day-patient treatments, however, out-patient treatments are generally an optional extra which you’ll have to pay more for.

The higher the level of outpatient cover you provide, the higher your premiums will be. Out-patient cover is one of the largest factors affecting the cost of group health insurance policies. 

There are several options when it comes to out-patient cover - you can exclude it altogether, add limited cover or add full cover. By removing out-patient cover or adding limits to it, you can usually significantly reduce your annual premiums.

Just bear in mind though, that reducing or removing out-patient cover can mean that employees will need to rely on the NHS for some or all of their diagnosis/treatment.

Review your hospital list

With most company medical policies, you’ll receive a set list of private hospitals that your employees can use for their treatments. Many insurers will, however, also give you the option to change this standard list, to include or exclude certain medical facilities. 

Extended hospital lists

An extended hospital list will cover more of the costly hospitals around the UK, including the top private hospitals found in London. As you would expect though, adding cover for those hospitals does come at a significant cost and will affect your premiums accordingly.

6 Week NHS wait option

A 6 week NHS wait option is another way you can reduce the cost of your company health insurance premiums, but it will severely reduce the level of cover your employees enjoy.

Effectively, a clause will be inserted into the policy which says that if the NHS can offer treatment for the condition within 6 weeks, then the employee will be treated through the NHS rather than privately. If the waiting time is longer than six weeks, then the individual will be treated privately. 

Review your policy with an independent advisor

The best advice we can give you is to regularly review your policy with an independent advisor. Health insurance can be a bit of a minefield, so by working with a trusted health insurance broker, you will ensure that you always have the right cover at the best price.

To speak to an FCA Approved broker about your company’s policy, please request a quote and one of our account managers will be in touch.