Understanding health insurance jargon for businesses

Health insurance has its own language, and knowing what your health insurance policy covers means you must understand those terms and explain them to your staff so they know when they can claim. We've split common health insurance terms into sections with definitions for each term.

You can tailor your health insurance policy to offer cost-effective coverage depending on your needs and budget. These are the terms you can expect to find in relation to medical conditions and treatment types.

Acute condition

An acute condition can typically be cured with the proper treatment. Health insurance covers treatment for acute conditions that arise after your employee joins the policy, including cancer, mental health issues and musculoskeletal conditions. Treatment types vary depending on your chosen policy.

Chronic condition

A chronic condition is one for which there is no known cure but which can be managed long-term. Examples include diabetes, asthma and high blood pressure. Health insurance doesn't cover chronic conditions, so your employees will need treatment via the NHS.

In-patient treatment

In-patient treatment is any care that involves a hospital admission. This commonly involves surgery but can include other health care services such as in-patient rehabilitation. Depending on your chosen policy, it could also cover in-patient psychiatric treatment. Your private medical insurance will cover treatment and accommodation costs in a private room or hospital.

Day-patient treatment

Treatment in a day patient unit is typically offered to patients whose treatment will take several hours but don't need an in-patient admission. This can include cancer treatment, where patients need various tests and time to rest after treatment.

Outpatient treatment

Out patient treatment can include treatment in a hospital or an out patient clinic. It includes treatments such as physiotherapy and diagnostic tests, blood tests and scans. Your health insurance policy needs outpatient cover if you want your employees to access a private diagnosis.

Mental health coverage

Mental health care can include many types of treatment, from counselling and CBT to psychiatric treatment in a hospital. Your coverage depends on your chosen policy and whether you opt to pay to enhance your mental health coverage.

Optical and dental coverage

Free dental and optical treatment is available to anyone meeting the relevant age criteria or who receives certain benefits. Your employees may already pay privately for eye tests, glasses, dental check-ups and treatment. Adding optical and dental coverage to your employee health insurance will cover those costs.

Here are some common health insurance terms you can expect to find in an insurance company quote. Each health insurance provider's coverage and terms and conditions differ, so always check the small print.

Annual renewal

Health insurance policies renew annually, although some allow you to pay a monthly premium. When your renewal is due, your insurance company will contact you with a quote so you can decide whether to renew with them or seek a lower premium or better coverage with another insurance company.

Group health insurance

Group health plans cover all your employees, and your company pays the premium. Your insurance policy starts paying when you add a new employee to the scheme, meaning they can claim for eligible treatment, and your insurance company pays the treatment costs.

Insured person

An insured person is anyone the policy covers. This is typically an employee for business health insurance but can also include their spouse or dependent children, depending on your chosen policy. You can include non-discriminatory membership conditions. For example, you might specify that a new employee must pass probation before they're covered.

Core coverage

Core coverage is offered by even the most basic health insurance policies. It typically includes in-patient, day-patient and cancer treatment and some mental health cover. It also provides access to virtual GP appointments and membership benefits.

Optional extras

You can tailor your health insurance by adding optional extras to your insurance provider's core coverage. Medical care, including outpatient treatment, dental and optical care and enhanced mental health insurance, are typically only available as optional extras.

Comprehensive policy

A comprehensive policy includes a comprehensive range of medical care, with many optional extras in addition to core insurance coverage. Many insurance companies offer a packaged comprehensive policy with their full range of medical services and member benefits.

Treatment-only policy

A treatment-only policy includes basic health care services, which are typically the same as an insurance company's core coverage. Some providers offer enhanced treatment-only policies, including some diagnostic tests. Every policy provides access to member health services, such as a private GP.

Cash plan

A cash plan doesn't cover private medical treatment but pays cashback on your employees' out-of-pocket medical expenses, such as private physiotherapy or dental treatment. It can also pay a fixed sum if an employee is admitted to an NHS hospital. Some health insurance policies also include cashback plans.

Hospital list

Insurance companies' hospital lists detail the hospitals and treatment centres their policies cover. Your employees can choose where they're treated if your policy covers it. Every policy includes a standard list, but you can pay more for an extended list, including hospitals with higher treatment costs. These typically include hospitals in Central London and other major cities.

Pre-existing condition

Pre-existing conditions are any medical conditions your employee sought treatment or advice about in the five years before they joined the policy. They're automatically excluded from coverage for the first two years but can be added later if your employee stays symptom-free.

Health insurance exclusions

Every health insurance policy has standard exclusions detailing treatments the policy doesn't pay for.

These typically include:

• Straightforward pregnancy and birth
• Treatment for addiction
• Cosmetic or weight loss treatment

Each insurer has its own exclusions, so check before you buy.

Policy limits

Policy limits can be financial, setting out how much your policy will pay for each treatment type. Alternatively, it can limit the number of treatment sessions an employee can receive.

Policy coverage

Policy coverage is detailed in your policy documents and sets out the specific details of what the policy covers regarding treatment type, financial limits and exclusions.

Employee assistance program

Employee assistance programs are provided to business customers by health insurance companies and include employee support services such as access to counselling and financial and legal advice online and via telephone helplines.

Underwriting is the process your insurance company follows to assess what coverage to offer and how much your premium should be. It looks at various factors, such as your location, industry and employee age, to assess the risk an employee will claim on the policy. There are different underwriting types.

Moratorium underwriting

There's a two-year moratorium period on pre-existing conditions, meaning they aren't covered for the first two years of the policy. When you choose moratorium underwriting, your insurance company won't ask employees for medical information when they join but will investigate whether any exclusions apply when they claim.

Full medical underwriting (FMU)

With full medical underwriting, the two-year moratorium also applies, but your employees must provide medical details when they join. This gives everyone certainty about what's covered and excluded from the start and also makes FMU cheaper than moratorium underwriting.

Medical history disregarded underwriting

Medical history disregarded underwriting is the most expensive option and is only available to larger businesses. However, it means that there are no exclusions for pre-existing conditions.

Business medical insurance can be expensive, but there are ways to reduce your premium.

Guided consultant choice

Guided consultant choice gives your employees a shortlist of 3-5 preferred providers when they claim, as opposed to free consultant choice. It's cheaper as the list will only include qualified consultants with lower treatment costs.

Policy excess

A policy excess is the amount your employees will pay towards their treatment when they claim. A higher excess gives you a lower premium.

However, if you set it too high, you may discourage your employees from using their health insurance, meaning you lose some of the benefits.

Six-week wait

A six-week wait option means that your employees can only claim for private medical treatment if they'll wait longer than six weeks for NHS treatment. NHS waiting lists mean that most patients are waiting longer than six weeks.

However, if an employee receives emergency treatment, they won't be able to use health insurance for their follow-up care, which could mean a lengthy absence from work.

Getting professional advice

We hope our health insurance glossary has helped you understand some of the most common terms. While understanding insurance jargon is important, an insurance broker can help you understand the impact of policy terms on your business.

Globacare is a regulated broker offering tailored advice to help you choose the right private medical insurance for your business. Contact us for a comparison quote.