Employee health insurance

Employee health insurance allows you to offer private health insurance to all of your employees to enable them to get private healthcare when they need it. NHS waiting lists mean that they could face a lengthy delay before being treated. Business health insurance allows them to be seen quickly, regain their quality of life, and get back to work if they've been absent.

Business health insurance is offered via a group health insurance policy that you can provide to your employees. The cost of the premium per head is typically lower than that of an individual private health insurance policy.

There are various business medical insurance policies offering different cover options and services. You choose your preferred policy and the level of coverage you need.

Applying criteria to your company's health insurance

When you offer employee health insurance, you may decide to provide it to all of your staff. Alternatively, you can apply criteria to determine who is covered. If you do, these criteria mustn't be discriminatory. Before deciding, you should discuss this with your HR department and occupational health services.

Private health insurance as a standard benefit vs voluntary enrolment

When you offer company health insurance, you may decide that the benefits justify paying the premium to include all your employees. If that's the case, you can provide health insurance as a standard company benefit.

Alternatively, you can offer your staff the option of voluntarily signing up for the policy, so they pay the premiums themselves. This enables them to access private healthcare while being more affordable than an individual health insurance policy.

Private health insurance policies vary in terms of the cover they offer. All of the well-known providers offer core cover along with a range of optional extras to allow you to tailor the policy to suit your needs and budget.

Every insurance provider covers in-patient and day-patient treatment, along with cancer care. However, outpatient treatment and rehabilitation services such as physiotherapy are typically only offered as an optional extra. Your employees will only be able to access private consultant appointments and diagnostic tests with outpatient cover, so this is worth including to enable them to avoid a potentially lengthy wait for diagnosis via the NHS.

Other optional extras

You can opt to include other types of healthcare, for example, dental and optical care or mental health support, to take care of employees' mental well-being and physical health. It's worth investigating your business's challenges regarding workplace well-being and employee absence so that your company's health insurance can form part of an overall well-being strategy.

Health insurance is designed to give you and your employees private medical treatment for acute conditions. Each provider also has a list of treatments excluded from cover as standard. Other exclusions can also apply depending on each employee's individual medical history.

The following are typically automatically excluded from cover:

• Treatments for addiction or substance abuse
• Cosmetic and weight loss procedures
• Pregnancy and maternity care

Chronic conditions

We've already mentioned that health insurance covers acute conditions, which means that chronic diseases are excluded. Chronic conditions such as asthma, diabetes and angina won't be covered as they need ongoing management.

Pre-existing conditions

A pre-existing condition is any illness or symptoms that an individual consulted their doctor about in the five years before they enrolled in the policy. For example, if an employee had physiotherapy for a bad back before they came to work for you, they wouldn't be able to have private medical treatment if it returned.

There is, however, a two-year moratorium period, so if their symptoms didn't return in the first two years after they joined, the policy could then cover the condition.

The company health insurance that's best for you will often depend upon how many employees you have.

Corporate health insurance schemes are only available if you have more than 20 employees. However, it's still worth offering employee health insurance if you have a small business. Here's what you can expect from each type of policy.

Corporate health insurance

A corporate health insurance policy is designed for businesses with 20+ employees. Some providers offer their corporate clients additional workplace well-being services and management tools to reflect the challenges of managing a larger workforce.

One of the main benefits is that a corporate policy can allow you to access medical history disregarded underwriting. It's the most expensive underwriting option but allows your staff to be treated privately for any acute condition, regardless of their medical history. This could be worth considering depending on the type of work you do and the risks involved.

Small business health insurance

Private health plans aren't just for larger employers. If your company has two or more employees, a group policy can still be cheaper than two individual ones. Small business health insurance can allow your people to access services, including support for mental health issues and 24/7 virtual GP services.

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Private medical insurance underwriting and tax considerations

The cost of your medical insurance will vary depending on the cover you choose and whether you're a large corporate or a small business, among other things. The type of underwriting also impacts the overall cost and the process when your employees make a claim. We've already mentioned that medical history disregarded underwriting is an option for larger businesses. Small businesses can choose from moratorium or full medical history underwriting.

Moratorium underwriting

If your staff member has been treated for any condition or consulted their GP about relevant symptoms in the five years before they joined the policy, that condition will be excluded from cover for a two-year moratorium period at the start of the policy. It can be added later if the symptoms don't reoccur.

This is the cheapest type of underwriting as your employees don't have to provide any medical information when they join. However, it can take longer for your insurers to process claims as they'll look at any relevant medical history at that stage.

Full medical underwriting

Full medical underwriting has the same five-year exclusion period and two-year moratorium as moratorium underwriting. The main difference is that new policyholders will be asked to complete a medical questionnaire when they join. The premiums are higher, but the claims decision-making process is quicker as your insurers already know what's included and what's excluded.

Taxation

Medical insurance is a taxable benefit, so you'll need to consider the impact on your tax position. Your accountant will be able to advise, and guidance is available from HMRC. You'll need to report to HMRC using form P11D so that they can calculate the tax and National Insurance liability.

In the current climate, one of the biggest challenges for employers is making themselves attractive to the best available talent. Private medical insurance is an attractive benefit that could help you recruit the best people and increase employee retention.

Benefits for your business

If anyone in your team needs healthcare or mental health support, insurance can help them to get it more quickly. If the care they need isn't classed as urgent they could be facing a long wait on the NHS which could affect their mental health and keep them away from work or with reduced productivity. That could significantly impact your business, particularly if you have a small business where a team member's sick days mean an increased workload for your other staff.

Offering private medical insurance also shows that you're committed to workplace well-being. Recent research from Gallup found that employers with a health and wellbeing strategy and initiatives improved their staff's health outcomes and overall productivity.

Benefits for your team

Access to private healthcare improves employee well-being making it valuable to your business and employees. Private medical insurance allows your staff to get medical advice and check-ups at a time to suit them and receive private treatment quickly and at a location of their choice. Many insurers also allow policyholders to add their family members to their policy to extend the same benefits.

The importance of looking after your mental health has become a sharp focus over the past few years, and the services that many insurers provide also allow your workforce to seek support when needed. Some providers also offer legal support and guidance along with advice on money worries.

Are there any downsides to providing business health insurance?

The only real disadvantage of a group healthcare insurance policy is its lack of flexibility. You'll work with your insurer to provide cover for a specific set of eligible conditions, treatment types and services. The cover will be tailored to your business rather than individual employee needs.

How to get cover

Contact us to request a comparison quote, and we'll provide you with an outline of the insurance providers and policies tailored to your business.

Globacare is an insurance broker registered in England and regulated by the Financial Conduct Authority.