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Company health insurance for employees
Prioritise your team’s health with company health insurance
What is company health insurance?
Company health insurance is a group health policy provided by employers to give their employees access to private medical care. It helps cover healthcare costs if employees become ill or require medical treatment, ensuring they receive prompt care without long waiting times.
It will typically cover things such as consultations, specialist care, hospital stays, and other essential treatments. Employees may need to pay a small excess for claims, but any policy generally offers significant financial and health benefits.
Company health insurance supports a healthier workforce, boosts employee satisfaction, and can improve productivity by reducing absences due to illness. It’s also a highly valued perk that can enhance staff retention and make your business more attractive to potential hires.
Providing company health insurance demonstrates your commitment to employee well-being and helps foster a supportive, efficient workplace environment.
Who is eligible?
You may be able to get company health insurance if you are a:
Small business
Corporate business
Sole trader with employees
Does my business need it?
Businesses are not legally obliged to offer company health insurance to their employees, but it is definitely worth considering as it’s an attractive benefit for your workforce. Company health insurance is also available for small and corporate businesses - so there's no excuse not to explore it.
What are the benefits of company health insurance?
Company health insurance offers a wide range of advantages for both employees and employers, making it an essential consideration for businesses aiming to support their workforce and improve productivity.
One of the main benefits is faster access to healthcare. Private health insurance often allows employees to skip long waiting times associated with public healthcare. This ensures they can receive the treatment they need promptly, helping them recover quickly and reducing the number of sick days that could impact your business.
Another significant advantage is access to a broader range of treatments, including procedures that may not be available via the NHS. This extra level of support can alleviate stress for employees by ensuring they receive the best possible care without added worry.
Many company health insurance plans also enhance the overall treatment experience by offering employees the ability to choose their hospital and even enjoy the comfort of a private room. These benefits show your staff that their well-being is a priority, fostering a sense of value and appreciation.
Beyond healthcare itself, company health insurance demonstrates your commitment to employee welfare, which can strengthen morale and create a more positive workplace culture. Employees are more likely to feel loyal to a business that invests in their health, improving staff retention and making your company more attractive to potential talent.
By supporting your employees’ health and happiness, company health insurance helps ensure a stronger, more productive workforce while reinforcing your reputation as a caring employer.
What is the difference between corporate and small business health insurance?
Whatever the size of your business, there is health insurance available that supports workplace health - you’ll just need at least two employees to take out a group policy.
Cheaper per employee: Some providers state that if you have more than 250 employees, then you’ll need corporate health insurance and providers will offer an extensive package for your business. This might work out cheaper per employee, as you’ll be able to spread the cost between more members.
Flexible packages: Small business health insurance works in a similar way, but providers will offer packages which are suitable for the size of your business. A small business could be up to 250 employees and it also works well for sole traders who have employees.
Individual health insurance: If you are a sole trader with no employees, you can choose an individual health insurance policy through your business.
What’s covered and not covered in some policies?
What's covered
Not covered
Can I tailor the cover to suit my business?
There are a range of providers in the market offering company health insurance, so it’s important to explore all the options before making a final decision.
You should be able to adapt your cover to suit the needs of your employees, and this will impact the premium depending on whether you are adding or removing benefits. For example, you might decide to increase the cover to include dental and optical expenses or you could reduce the amount of out-patient cover.
Always take the time to think about what cover matters to you and your employees. Then make sure your chosen provider can adapt the cover to suit your needs.
What is the cost of company health insurance?
Level of cover
Size of workforce
Location of business
The excess
What are the tax implications of company health insurance?
It’s important to note that employers will have to pay tax on this insurance. For example, they will need to pay the total premium of the policy and this includes the Insurance Premium Tax; the standard rate is 12%. This is because health insurance doesn’t include VAT in the UK.
However, you can claim tax relief on health insurance premiums as it’s an allowable expense for corporation tax purposes. But HMRC does consider company health insurance as a taxable benefit, so employees will be taxed on the premiums too.
Remember, tax rules and regulations can be complex and subject to change. Consult with a tax professional or accountant to understand the specific implications for your business and ensure compliance with all HMRC requirements.
How do I set up company health insurance?
If you are interested in setting up company health insurance for your business, then the first steps you can do are:
FAQs
What is the minimum number of employees required for company health insurance?
The minimum number of employees for company health insurance is two.
Can employees opt-out of company health insurance?
Yes, some policies will include an opt-out option. This means the employee is in control of whether they want to take advantage of the benefit or not.
Can you change your policy throughout the year?
Whether you can make changes to your company health insurance policy during the year depends on your provider and the terms of your policy. Some insurers allow employers to update their policy mid-term, but this may come with restrictions or additional costs. Common changes include adjusting the level of cover, adding or removing employees, or modifying optional extras.
Employees typically have more defined opportunities to make changes, such as during their initial enrolment period or when the policy renews. However, certain life events, such as marriage, childbirth, or a significant change in employment status, may allow for adjustments outside these windows.
To avoid unexpected penalties or issues, it’s essential to review the terms and conditions of your policy and communicate directly with your provider about any changes you want to make. If flexibility is important for your business, consider this when selecting your insurance provider.
Does company health insurance cover mental health?
Yes, many company health insurance policies include mental health support. This can vary depending on the provider and the specific policy you choose. Some insurers offer mental health cover as a standard part of their package, while others may require you to add it as an optional extra.
Mental health cover often includes access to services like counselling, therapy sessions, or psychiatric care. It may also provide support through helplines or online resources to help employees manage stress, anxiety, and other mental health challenges.
If mental health support is a priority for your business, ensure you review the policy details carefully or speak to the provider to confirm what is included and whether additional cover is needed. Offering mental health insurance can show your commitment to employee well-being and create a healthier, more productive workplace.
Should I choose individual or small business health insurance?
The choice between individual and small business health insurance depends on your specific needs and circumstances. If you have two or more employees, opting for small business health insurance is often the better choice. Group plans typically offer a lower cost per employee compared to individual policies, making them a more cost-effective solution for covering your team.
Small business health insurance can also provide additional benefits, such as unified policy management and tailored group coverage options. However, it's essential to compare policies to understand the costs, coverage, and terms involved. If you're unsure which option is best for your business, consider speaking with an insurance broker or provider for tailored advice.
Should small businesses offer company health insurance?
Offering company health insurance can provide significant advantages for small businesses, in part because it is likely to help attract and retain top talent by making your company a more appealing place to work. Employees value access to private healthcare as it ensures faster treatment, shorter wait times, and peace of mind for themselves and their families.
Additionally, company health insurance promotes a healthier workforce, which can lead to fewer sick days and improved productivity. It also demonstrates that you care about your employees' well-being, fostering loyalty and boosting morale.
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