How group health insurance works

Group health insurance works because you can spread the risk by taking out an insurance plan for a more significant number of people and reducing the overall cost per person. Taking out a group health insurance policy allows you to offer private health insurance coverage to all the employees in your business. Your employees can access private healthcare when needed, knowing their medical expenses will be covered, even if they can't afford individual health insurance.

Health insurance providers offer different group health insurance plans, so you can find one that works for your business. There are various options regarding the type of coverage each insurance company offers and the features that different group health plans have.

You can choose to provide health insurance coverage to all of your employees, and the business pays the premiums. Alternatively, you can take out a group health insurance plan and ask your employees to opt in and pay the premiums themselves. This allows your employees to benefit from private health insurance coverage at a lower cost than an individual health insurance plan.

When an employee has to take a leave of absence due to ill health, it impacts your business in terms of productivity and the increased workload for your other staff. Group health insurance allows your employees to access private treatment, which could help them to get back to work more quickly.

COVID-19 severely impacted NHS waiting times, and whilst things are improving, patients are waiting, on average, over three months to start NHS treatment, with over 370,000 patients waiting over a year to see a consultant. By contrast, group health insurance could allow your employees to be seen within a couple of weeks, depending on the type of cover you choose.

One of the main benefits of many insurance policies is that it includes access to online GP appointments and 24/7 healthcare advice, so staff won't have to take time off to see their GP.

Offering health insurance coverage to your company employees also shows that you're invested in supporting their well-being, which can help to make you an employer of choice and improve employee retention. Businesses with health insurance as part of their employee benefits report higher productivity, increased employee engagement and job satisfaction.

Group health insurance benefits employees

Quick access to high-quality private healthcare and GP appointments that fit their other commitments benefits your employees and your business. It gives them the reassurance that they can be treated quickly and return to enjoying their daily life.

Some policies allow group members to add family coverage at no extra cost, giving your staff peace of mind knowing that their family members can also receive medical insurance benefits.

Depending on the policy you choose, your staff will be able to receive private treatment for cancer, musculoskeletal issues and mental health conditions. They'll also be able to choose which consultant treats them and which hospital they attend, which means that they can tailor their care to fit their work and family commitments.

Your group insurance cover can include additional benefits and services beyond private health coverage. They can help you to promote workplace well-being, improve employee retention and reduce absence. Gallup found that well-being schemes had a variety of health benefits and enhanced employee engagement. Health insurance is a highly valued employee benefit, which can also help make your business an employer of choice.

Most health insurance also provides mental health support via a helpline to allow your employees to discuss any stresses or concerns. A service such as this is valuable to all your employees, particularly if you work in a high-stress environment.

Does group health insurance have any disadvantages?

Group health coverage has many benefits; however, it can't be tailored to your employees' needs in the way that individual health insurance plans can. An individual health insurance policy can be designed to include specific types of coverage to suit the individual's circumstances. Group health insurance, where an employer pays the premiums, will typically have specified treatments or health conditions which may not meet an individual employee's needs.

Suppose you are planning to offer health insurance to employees who pay their own monthly premiums. In that case, a group policy could be more accessible to employees who can't afford individual health cover. A group insurance policy typically has lower premiums. If the employer pays the health insurance premiums, employees may be able to afford supplemental health plans to cover specific needs.

A group health insurance policy covers medical care for acute medical conditions that arise after you take out the policy. Acute conditions can potentially be resolved with a course of treatment, as opposed to chronic conditions requiring ongoing management. Each group plan has conditions and treatments that are included as standard, along with a range of optional extras which you can add to tailor your group insurance plan to your business needs.

What's included in group health insurance as standard?

All group health insurance plans include inpatient treatment and cancer care as standard. Your group medical insurance will cover private treatment if you need to be admitted to a hospital for surgery or treatment in a day-patient unit. Some group health plans offer extensive cancer coverage, but most group health insurance includes surgery, radiotherapy and chemotherapy as a minimum.

Most group medical insurance will cover rehabilitation after surgery. Still, if you want your group coverage to include rehabilitation or physiotherapy as a standalone service, you'll need to add it to your policy.

Most group health insurance plans include additional support services, including access to a digital or virtual GP, so your employees can access medical advice at a time that's convenient to them.

What optional extras are available with group health insurance?

Adding optional extras to your group health insurance means that your employees can experience the real benefits of medical cover.

Including outpatient treatment in your group health insurance means your employees can access private consultant appointments and diagnostic tests. Outpatient coverage also funds physiotherapy, osteopathy or chiropractic treatment. In other words, the type of care that might find you on a lengthy NHS waiting list if it wasn't available privately.

Most health insurance includes informal mental health support via a helpline. This doesn't amount to psychological or psychiatric treatment. More group health insurance plans are starting to offer some mental health treatment as standard; most group plans don't. If your work has the potential to create high levels of stress, adding more mental health care to your plan could pay dividends.

You could also add optical and dental coverage and health insurance for treatment overseas if your employees regularly travel for work.

This guide was created to guide individuals seeking health insurance. However, it poses some helpful questions when seeking group health insurance.

Health insurance is designed to cover acute conditions that can be treated with a single course of treatment, and group insurance health plans take the same approach. It means your employees won't be able to use their group health benefits to access treatment for chronic conditions such as asthma, diabetes or angina.

On an individual policy, pre-existing conditions will typically be excluded. These are any health issues that an individual sought treatment or advice about in the five years before they took out the policy; they'll usually be excluded for the first two years of the policy and can be added if they don't reoccur within that time. However, one of the benefits of a group health insurance plan is that you can opt for medical history disregarded underwriting, which provides medical insurance for pre-existing conditions as well.

Each health insurance company has a list of exclusions alongside pre-existing and chronic conditions. Some are more extensive than others, but most group health insurance cover will exclude the following:

• Pregnancy and maternity care; some group health insurance plans include coverage for pregnancy-related complications.
• Cosmetic surgery or non-surgical cosmetic treatments
• Surgical and non-surgical weight loss procedures
• Treatments related to drug or alcohol addiction

It stands to reason that the cost of your group health insurance plan is reflected in the amount of coverage you include. However, your health insurance premiums are also calculated based on the risk factors associated with your business and how many employees you have. Obtaining quotes from more than one insurance provider is essential, as you may get the same benefits and coverage at a lower cost.

A group health insurance plan allows you to spread the risk, and the cost, across all the group members and results in lower premiums per head, so the number of group members is an important consideration. You can benefit from lower premiums by offering employee health insurance to as few as two employees. However, corporate medical insurance for larger businesses can give you a group health plan with improved benefits and a more comprehensive range of services to reflect the challenges of running a larger company.

The overall cost of your group health insurance policy also depends on the tax benefits you can claim, and the type of underwriting applied to your health insurance policy.

Moratorium underwriting

As we've already mentioned, medical insurance excludes any condition that required medical advice or treatment in the five years before the individual joins the group health insurance policy. Coverage is subject to a two-year moratorium when they first enter the group health plan but can be added if they stay symptom-free within that two years. When joining the group health insurance policy, your employees won't be asked to provide medical information. This can mean that claims decisions take longer because your insurance company will look at their medical history when they make a claim.

Full medical underwriting

Full medical underwriting has the same five-year exclusion period and two-year moratorium as moratorium underwriting. However, your insurers will ask new group members to provide details of their medical history when they join your group health insurance plan. This means that your employee has more certainty about what's covered from the outset, and claims decisions can be made more quickly. It can also be cheaper than moratorium underwriting.

Medical history disregarded underwriting

Medical history disregarded underwriting is only available on group health insurance plans and is typically only offered to businesses with at least 20 employees. As the name suggests, if your group health insurance has this underwriting, your insurer won't take any details of group members' medical history and will cover any pre-existing acute condition.

You won't be surprised to hear that it's the most expensive option. However, depending on your employees' needs and the risks associated with your business operations, it's worth considering.

Group health insurance plans can have some tax benefits as the premiums your business pays are tax deductible. However, it's also a taxable benefit in kind that needs to be reported to HMRC so they can calculate the income tax and National Insurance you and your employees need to pay. Your accountant will be able to advise you on the tax benefits and implications of group cover, or you can find out more from HMRC's website.

If you want to buy group health insurance tailored to your business and the needs of your employees, Globacare can help. Contact us for a comparison quote.