Business Health Insurance: What Is It and How Does It Work?

business health insurance
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Health insurance is similar to a private medical insurance policy in that it covers the costs of various medical treatments and care. Business health insurance, on the other hand, is intended to be purchased by employers to cover the health of their employees. When an employee is diagnosed with an illness, the insurance policy can be used to help pay for or contribute to the cost of their treatment.

In this article, we will be discussing the meaning of business health insurance, what it covers and what it doesn’t cover, the benefits of business health insurance and how to reduce business health insurance costs.

What Exactly Is Business Health Insurance?

Business health insurance, also known as corporate health insurance, is a way for businesses to provide private healthcare to their employees. It is a type of private medical insurance that businesses purchase for their employees, giving them quicker access to appointments, diagnosis, and treatment, as well as the choice to stay in a private hospital.

It is a way for the company to reduce the short-term absence of their employees, lowering the cost of sick days by providing them with more efficient access to medical treatment, resulting in faster recovery times. It’s also an appealing benefit for employees, which can lead to higher staff retention and more applicants for new positions.

How Much Coverage Do I Need?

Because this is an optional type of insurance, there is no set amount of coverage that your business requires. Of course, the more comprehensive the coverage, the more benefits your employees will receive, which could result in better long-term savings for your company if it contributes to fewer sick days and a happier team.

Consider your employees’ needs when determining the level of coverage you require. Certain coverage features may be more important to businesses in certain industries. Access to opticians, for example, may be especially important to your company if your employees spend long periods looking at screens.

Another factor to consider is selecting a policy that covers mental health care. Accessing mental health support, care, and treatment is notoriously difficult, often involving a lengthy referral process and lengthy waiting periods. Taking out a policy that includes mental health care can significantly improve your employees’ well-being and may be a worthwhile investment for the business as well, to retain your employees and keep them as happy and healthy as possible.

How Much Does Business Health Insurance Cost?

The business and the people you want to insure both play a role in determining the cost of business health insurance. The following are typical factors that insurers will use to assess your risk and determine your premium rate:

  • The size of the group you wish to protect Although there is a cost per employee, the larger the group, the greater the discount, which can lower the cost per employee
  • The age of employees In most cases, younger employees are less expensive to insure than older employees. 
  • Some jobs carry a higher risk of illness or injury, which can raise the cost of your premiums depending on the company’s location. 
  • Treatment, appointment, and procedure fees and costs vary between private practises and hospitals and are typically higher in certain areas, such as central London.

Some insurers may request additional information on employees who have insurance under the policy, such as their smoking status, medical history and current state of health.

Why Should Companies Provide Business Health Insurance to Their Employees?

Business health insurance, as part of your company’s benefits package, can help reduce sickness-related absences and increase productivity. Employees who are less likely to miss work for an extended period of time can avoid NHS waiting lists and receive treatment for an acute condition sooner. 

Private health insurance is another highly valued employee benefit that can attract people to your business and encourage them to stay. It might give your employees a sense of value and care from the company.   It might give your employees a sense of value and care from the company. 

Many health insurance companies provide virtual doctors, health advice lines, and online stress counselling with flexible appointment times. Discounts on gym memberships are also available, all of which can help keep your workforce happier and healthier.

Business health insurance policies can also include mental health coverage, which is a significant benefit given that, according to the most recent AXA Mind Health Report, employees are three times more likely to thrive if they work for a company that provides mental health support.

What Does a Business Health Insurance Policy Cover?

Depending on the type of policy the business purchases, employees may have access to either completely free or heavily discounted private health care. Different providers provide varying levels of protection, but a policy should typically cover:

  • physiotherapy
  • chiropractic therapies
  • tests and scans
  • Online or phone access to GPs is available 24 hours a day, seven days a week.
  • personal consultations
  • exclusive drugs not available on the NHS
  • Acupuncture and other complementary therapies
  • surgery insurance
  • If cancer is present, radiotherapy and chemotherapy are used.
  • additional hospital procedures
  • hospital admissions
  • access to mental health care, including an initial assessment as well as counselling, psychiatric treatment and cognitive behavioural therapy.

Access to private facilities allows your employees to take advantage of a variety of benefits that are not typically available through the NHS. This could include:

  • private quarters
  • Visitation hours are flexible for friends, family, and colleagues.
  • shorter procedure, surgery, and treatment wait times
  • flexible appointment times
  • a range of consultants and experts
  • the option to choose the facility where they receive treatment.

What Does Business Health Insurance Not Cover?

Health insurance is intended to provide you and your employees with private medical treatment for sudden illnesses. Each provider also has a list of services that meet the standard policy does not cover. Other exclusions may apply depending on each employee’s medical history.

The following are typically excluded from coverage:

  • Addiction and substance abuse treatment
  • Procedures for cosmetic and weight loss
  • Maternity and pregnancy care

Chronic illnesses

As previously stated, health insurance only covers acute conditions, so chronic diseases are not covered. Chronic conditions such as asthma, diabetes, and angina will not be covered because they require ongoing care.

Existing medical conditions

A pre-existing condition is any illness or symptom for which an individual sought medical attention in the five years preceding enrollment in the policy. For example, if an employee received physiotherapy for a bad back before starting work for you, they would be unable to receive private medical treatment if the condition returned.

However, there is a two-year moratorium period, so if their symptoms do not return within the first two years of joining, the policy may cover the condition.

How to Find a Business Health Insurance Provider

It’s time to find a suitable provider once you’ve determined the type and extent of coverage you require in a policy. You can find an insurer in three ways.

#1. Directly Approaching Insurers

When looking for business health insurance, you can conduct your market research by approaching insurance providers directly. Many insurers post information about their policies on their websites, where you can review the features of coverage they offer as well as any perks to their policy, such as health incentive schemes. Choose a provider who is authorised by the Financial Conduct Authority (FCA). This UK regulatory body protects consumers by ensuring that the companies it regulates adhere to stringent industry standards.

#2. Utilising a Broker

Brokers have the advantage of being industry experts with years of experience and extensive insurance market knowledge. Their knowledge can assist businesses in locating policies that meet their specific insurance requirements. With greater market access, they can often find more extensive products at more competitive prices, which insurers may only offer to brokers.

Despite taking a commission, many businesses can find themselves with a lower premium when using a broker than if they sought insurance on their own. Brokers with industry expertise can assist in negotiating better terms for complex insurance products, such as health insurance.

#3. Websites for Comparison

Using a comparison website is one way to scope out the market and start your market research. These websites can aggregate the policies available from various providers in one location, allowing you to easily access a wide range of insurance solutions. Comparison websites show each product along with the key features of the policy. 

They usually have the option of filtering search results based on specific criteria or ordering the plans based on price or level of coverage. These websites can help you get a sense of the market and find policies that meet all of your requirements.

What Are the Benefits of Business Health Insurance?

Some of the benefits of business health insurance include the following:

  • Employees benefit from faster access to diagnostic tests, treatment, and surgery, which allows them to recover more quickly.
  • Avoid long NHS waiting lists, which can result in more time away from work.
  • Could boost business productivity.
  • Attracts people to work for and stay with your company.
  • It makes your employees feel valued and cared for, which increases motivation.
  • A physically fit team that receives mental health support as needed can help your business perform better.
  • Employees who have access to flexible appointments can schedule appointments at times that are convenient for them, allowing them to balance work and family obligations.

How to Reduce Your Business’s Health Insurance Premiums

There are several ways for businesses to reduce the cost of business health insurance. You can also contact your provider directly to see if they can offer lower rates. Typical methods for obtaining lower premiums include:

  • Choosing a larger excess 

Many plans provide excess amounts ranging from £50 to £500. Insurance companies typically apply the excess once per member per policy year, regardless of how many claims are filed during that time. The more you pay in excess for your employees, the lower your monthly premiums will be, making your business more cost-effective.

  • You’re lowering your cover

Some providers provide optional extras such as dentist and optician services. You can avoid extra charges by selecting the basic or standard level of coverage. Where insurers include these features as standard, it is sometimes possible to request that these elements be removed in connection with the cost of your premiums.

  • Your subscription will be fixed for two years

Many insurers allow you to lock in your policy for several years. Although this has no bearing on the price they offer you, you can be certain that it will not increase during the fixed period, which may save you money on a policy that would have otherwise increased in price the following year. 

  • Using only the hospitals on the insurer’s list

As part of a health insurance policy, most insurers provide a hospital list that specifies the facilities in the UK where you can receive private medical treatment or procedures. Suppliers typically provide multiple lists from which to choose, which affects the price of the policy.

How Does Company Health Insurance Work in the United Kingdom?

You can provide health insurance as a standard employee benefit (where you pay the premiums) or voluntarily, where employees choose whether or not to sign up and pay the premiums. The voluntary option provides private health insurance to employees at a lower cost than an individual policy.

Who Pays for Health Insurance in the United Kingdom?

The premium for your health insurance is usually paid monthly. Your insurer will pay for any necessary treatment that falls under your policy. It is intended to provide treatment in addition to the NHS service.

How Much Does Private Health Insurance in the UK Cost per Month?

In the United Kingdom, the average monthly cost of a health insurance policy is £86.07 (as of January 2023). This average, however, is based on people aged 20 to 70. If you are under the age of 50, your policy will most likely be less expensive than average.

What if You Don’t Have Health Insurance in the United Kingdom?

If you haven’t paid and don’t have medical insurance, any care you receive will be charged 150% of the standard NHS tariff. Unless you are from a country with a reciprocal healthcare agreement with the UK or qualify for an exemption, this is not the case.

How Do I Go Private Rather Than the NHS?

Obtaining a referral from your primary care physician. If your doctor believes you should see a specialist and you prefer to pay for it privately, they can write a letter of referral to a private consultant or specialist outlining your condition and medical history. This will not be charged to you.

Final Thoughts

As life becomes more hectic, jobs become more stressful, and society becomes more aware of the negative effects of stress on overall well-being, investing in your health is more important than ever. Business health insurance can provide quicker access to medical advice as well as a broader range of treatments. You can provide a highly sought-after employee benefit to your employees by purchasing a health insurance plan for your business. It can also assist you in attracting and retaining talent, thereby reducing staff turnover.

Business health insurance can not only improve your employees’ well-being and boost company morale, but it can also be a wise financial investment. Companies can reduce their financial losses caused by sick days and decreased productivity due to poor health. Any company’s success is dependent on its employees. Consider purchasing a business health insurance policy to invest in the health of your most valuable assets, increase profits, and foster a happier, healthier workplace.


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