The cost of health insurance for small businesses in the UK is influenced by many factors, so it is difficult to calculate a meaningful average. In addition, we have quotes from leading health insurers showing how much you can expect to pay for a group health scheme.
What is small business health insurance?
Small business health insurance is a policy taken out by an employer to give employees access to private health services in the UK. Although there are different levels of cover to choose from, generally speaking, these policies allow employees to be diagnosed and treated more quickly than would be possible through the NHS.
Is private healthcare worth it?
It is well documented that the NHS is suffering from record backlogs, and even critical services such as cancer care are struggling. It’s not just hospitals that are feeling the pressure; getting GP appointments and accessing services such as physiotherapy, talking therapies and more has become difficult.
Private health insurance allows policy holders to access private health treatment options in the UK. In most cases, they saw and treated faster. Here are some of the fundamental benefits of small business health insurance from an employee and employer perspective
Health insurance benefits for employees
- Avoid NHS waiting lists and get treatment as soon as possible
- Access to medicines and treatments not routinely available on the NHS
- The choice of when and where the treatment will take place
- 24/7 virtual private GP services (most insurers)
- Physiotherapy and other complementary therapies (comprehensive rules)
- Mental health support and talk therapy (comprehensive rules)
- Coverage for family members (at the request of the employer)
- A private room while they are in the hospital
- Discounts on things like gym memberships
Benefits of health insurance for employers
- Make sure employees stay fit and return to work as soon as possible after illness
- Stand out on the labor market and attract employees
- Retain your employees by showing your commitment to their well-being
- Greater flexibility with medical appointments with doctors available 24/7
What does health insurance cover?
All health insurance policies, both for companies and individuals, are designed to cover the costs of treating acute medical conditions, that is, those that can generally be cured. Chronic conditions, i.e. those that cannot be cured and may require monitoring and treatment are usually not covered.
It is difficult to always know what is covered and what is not because, for example, mental health problems or cancer may not be curable but would still be covered, assuming you choose to cover them. Therefore, it is always wise to review the terms of your policy in detail and speak with a health insurance broker to make sure you fully understand what to expect.
Cover levels
Later in this article, we’ll look at the current average cost of small business health insurance and those costs are based on three different levels of coverage. We won’t dwell too much on this, but here’s how we defined each group for which we provided example prices.
Key cover
Key cover includes hospital treatment in a network of private hospitals across the UK. It also includes some cover for outpatient services, meaning that costs relating to diagnostic tests before treatment will only be covered up to a maximum level (usually £1,000). Key cover does not include things like physiotherapy or mental health cover.
Improved lid
Enhanced cover includes everything that Key covers, but the out-patient cover limit is £1,500. In addition, it also includes coverage for therapies, so physiotherapy and other alternative therapies are included.
Comprehensive cover
Finally, Comprehensive cover includes unlimited cover for outpatients, therapies and mental health support.
Other possibilities
None of the types of covers we have listed prices for include a routine dental and optical cover, nor do they include a travel cover, all of which are available as optional extras.
What is excluded?
All health insurance policies usually exclude the following:
- Pre-existing conditions
- Emergency treatment
- Aesthetic surgery
- Childbirth and infertility
- Treatment of chronic conditions
- Self-harm, alcohol and drug abuse
- Treatment is required due to participation in high-risk activities
Tax implications of a group health insurance policy
Health insurance is considered a P11D benefit in kind, which means that if they provide it to employees, they will have to pay PAYE and National Insurance contributions on the value of the benefit. While this is a relatively small amount in most cases, older employees or those with family members who also have coverage will see a more significant increase in their tax bills.
From a business perspective, health insurance is a tax-deductible business expense; therefore, the cost of the policy will be deducted from your profit at the end of the year.
The cost of health insurance for small businesses
In this section, we explain what affects the cost of a small business health insurance policy, along with a few sample quotes. Please note that the quotes we have provided are based on many factors and the price you will pay will be different.
What Affects the Price of Health Insurance for Small Businesses?
Although the list is not exhaustive, in general you can expect all of the following to affect the cost of your policy:
- Number of employees
- Age of employees
- Cover level selected
- Do you cover the employee’s family members?
- Where is your company headquarters?
- Costs of private health treatments at that time
- The industry in which your company operates
- Medical histories of your employees (in some cases)
- Selected type of insurance
Small business health insurance costs in 2022
The prices below are based on quotes from several leading insurers; we received those quotes in June 2022.
How your zip code affects your small business health insurance costs
While the most significant factors in the cost of your small business health insurance plan will be the number of employees you have, their ages, and the level of coverage you choose, your location also has a big impact. In this part of our article, we look at the average cost of health insurance depending on where your business is located.
Average cost of business health insurance based on location
This chart shows the costs small businesses can expect to pay for health insurance in towns and cities across the UK.
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Health insurance for small businesses
Typically, you may need three or more employees to set up a group health insurance policy. So if you’re a small business owner with less than that number, you should take out a personal policy instead. Fortunately, providers like WPA offer discounts for self-employed individuals and professionals, so you could pay less if you do it yourself.
How to compare offers and get the best price and policy
Comparing small business health insurance is not easy and there is no online tool that will allow you to do it. The only way to easily compare prices is to talk to an independent health insurance broker. The service they provide is free and they will do the legwork and give you a summary of what each of the leading providers charge and offer. Not only that, they will be able to answer all your questions and make sure you understand what you are buying.
Waiver: This information is general and what is best for you will depend on your personal circumstances. Talk to a financial advisor or do your own research before making a decision.
