One of the many employee benefits a business owner can offer to attract and retain top talent is health insurance. Traditionally, larger companies have been able to offer these group schemes, but if you run a small business, you too could reap the rewards by adding a healthcare policy to your employee benefits program.

What is Business Health Insurance?

Business health insurance functions much like an individual health insurance policy. It covers a large portion of the cost of various private medical treatments and care, but it’s taken out by employers to cover their employees. When an employee is diagnosed with an illness, they typically pay a small excess, while the insurer covers the cost of treatment.

Your business will have one policy to cover all enrolled employees, and you can choose who receives coverage—provided that the decision is not made on discriminatory grounds. By spreading the risk across a group, the cost of premiums is generally lower than individual policies.

Why Should I Offer Health Insurance to My Employees?

Providing health insurance to employees can deliver significant long-term benefits for both your business and your workforce.

Employee Benefits:

• Access to high-quality healthcare for a wide range of illnesses and conditions, including mental health and musculoskeletal issues
• Shorter waiting times for treatment and generally more flexible appointment hours
• More personalised care based on individual preferences
• Some policies include coverage for family members
• 24-hour GP or nurse practitioner phoneline (depending on the policy)

Business Benefits:

• Employees aren’t subject to NHS waiting lists, allowing them to receive treatment and return to work faster
• Employees can consult with a doctor outside of working hours, reducing absenteeism
• Improved overall employee well-being can boost workplace productivity
• A strong health insurance plan can make your company more attractive to top talent, enhancing recruitment and retention efforts

How Much Does Business Health Insurance Cost?

Group health insurance policies typically start at around £250 per employee per year but can reach up to £1,000. Several factors affect the cost of premiums, including:

• Group Size – The more employees covered, the lower the cost per person. Small businesses may face higher costs, but specialised policies exist for those with fewer than 250 employees.
• Average Age – Premiums are generally lower for younger employees since they are less likely to require frequent medical care.
• Coverage Level – More comprehensive policies (covering outpatient care, dental care, psychiatric care, physiotherapy, or second opinions) will cost more.
• Occupation Type – If employees work in high-risk jobs, premiums may be higher due to an increased likelihood of claims.
• Location – Treatment costs vary by region, with Central London generally being more expensive.
• Excess Amount – Employees usually pay an excess for treatment; lower excess amounts lead to higher premiums.

Since business health insurance is considered a benefit in kind, you must also factor in the costs of National Insurance contributions. Employees will also need to pay income tax on this benefit.

How Many Employees Do You Need for Group Health Insurance?

To qualify for a group health insurance policy, most providers require at least two employees. If your business has fewer than 250 employees, you will likely need a specialised small business health insurance policy.

If you are a limited company director, you can take out business health insurance for yourself, but it will be considered a taxable benefit-in-kind.

Is Small Business Health Insurance Cheaper Than Individual Coverage?

Even small businesses may find that corporate health insurance is more cost-effective than individual policies. Spreading the risk among as few as two employees can help reduce premiums. Additionally, group policies tend to be less flexible and personalised, which can contribute to lower costs.

For self-employed contractors, specialised policies exist, but it may be worth comparing the cost-effectiveness of a business policy versus an individual one.

Where Can I Get a Business Health Insurance Policy?

Many businesses work with financial advisers to access specialist policies and simplify the process of finding the best coverage options. A professional adviser can help you compare policies, ensuring you get the best value for your business and employees.

Are you considering health insurance for your small business? Speak to us today!

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