TL;DR
As an experienced UK broker that has helped arrange over 900,000 policies of various kinds, WeCovr understands that choosing the right business private medical insurance is a critical decision. This definitive guide is designed to help you compare providers, understand policy features, and make an informed choice for your organisation. Compare business private medical insurance options for UK companies of all sizes Navigating the UK's business private medical insurance (PMI) market can feel complex.
Key takeaways
- It covers acute conditions: These are diseases, illnesses, or injuries that are likely to respond quickly to treatment and lead to a full recovery. Examples include joint replacements, cataract surgery, or hernia repairs.
- It does NOT cover chronic conditions: These are long-term conditions that require ongoing management but have no known cure, such as diabetes, asthma, or high blood pressure. These remain under the care of the NHS.
- It typically excludes pre-existing conditions: Standard policies will not cover medical conditions an employee had before joining the scheme, at least for a set period. We'll explore this in more detail under 'Underwriting'.
- Reduced Sickness Absence: Faster diagnosis and treatment mean employees return to work sooner. According to the ONS, 185.6 million working days were lost because of sickness or injury in 2022, the highest on record. PMI directly tackles this productivity drain.
- Boosted Recruitment & Retention: A quality health insurance plan is a highly sought-after employee benefit. It demonstrates that you value your staff's wellbeing and can be the deciding factor for a candidate choosing between two job offers.
As an experienced UK broker that has helped arrange over 900,000 policies of various kinds, WeCovr understands that choosing the right business private medical insurance is a critical decision. This definitive guide is designed to help you compare providers, understand policy features, and make an informed choice for your organisation.
Compare business private medical insurance options for UK companies of all sizes
Navigating the UK's business private medical insurance (PMI) market can feel complex. With numerous providers, intricate policy details, and varying costs, it’s essential to have a clear understanding of what you’re buying. This guide simplifies the process, breaking down everything you need to know to find the best health cover for your team, whether you're a startup of three or a corporation of three thousand.
The core purpose of business PMI is to give your employees swift access to high-quality private diagnosis and treatment for acute medical conditions. This not only supports their wellbeing but also provides significant benefits for your business, from reducing sickness absence to attracting top talent.
What is Business Private Medical Insurance?
Business private medical insurance, also known as company health insurance or group PMI, is a policy taken out by an employer to provide healthcare cover for its employees. It acts as a parallel system to the NHS, offering access to private hospitals, specialists, and treatments.
The key thing to understand is what PMI is designed for:
- It covers acute conditions: These are diseases, illnesses, or injuries that are likely to respond quickly to treatment and lead to a full recovery. Examples include joint replacements, cataract surgery, or hernia repairs.
- It does NOT cover chronic conditions: These are long-term conditions that require ongoing management but have no known cure, such as diabetes, asthma, or high blood pressure. These remain under the care of the NHS.
- It typically excludes pre-existing conditions: Standard policies will not cover medical conditions an employee had before joining the scheme, at least for a set period. We'll explore this in more detail under 'Underwriting'.
In essence, business PMI is your team's fast-track ticket to getting diagnosed and treated for new, eligible health issues that arise after their cover begins.
The Strategic Benefits of Offering Company Health Insurance
Investing in your team's health is one of the most effective ways to invest in your business's future. With NHS waiting lists remaining a significant concern, the advantages of PMI are more compelling than ever.
Benefits for Your Business:
- Reduced Sickness Absence: Faster diagnosis and treatment mean employees return to work sooner. According to the ONS, 185.6 million working days were lost because of sickness or injury in 2022, the highest on record. PMI directly tackles this productivity drain.
- Boosted Recruitment & Retention: A quality health insurance plan is a highly sought-after employee benefit. It demonstrates that you value your staff's wellbeing and can be the deciding factor for a candidate choosing between two job offers.
- Improved Employee Morale & Loyalty: Providing cover gives your team peace of mind. Knowing they have support when they need it most fosters a positive and loyal company culture.
- Duty of Care: It provides a tangible way to fulfil your duty of care as an employer, supporting both the physical and mental health of your workforce.
Benefits for Your Employees:
- Fast Access to Specialists: Bypass lengthy NHS queues for consultations and diagnostic tests like MRI and CT scans.
- Choice and Control: Employees often get to choose the hospital and the specialist overseeing their care.
- Comfort and Privacy: Treatment is provided in a private hospital, typically with an en-suite room.
- Access to Advanced Treatments: Some policies provide access to new drugs or treatments not yet available on the NHS due to cost or other restrictions.
- Peace of Mind: Reduces the stress and anxiety associated with waiting for treatment.
How Business PMI Policies Work: The Key Components
To compare policies effectively, you need to understand their core building blocks. Almost all UK PMI policies are modular, allowing you to build a plan that fits your budget and your team's needs.
1. Core Cover
This is the foundation of every policy and almost always includes:
- In-patient Treatment: When a member is admitted to a hospital and stays overnight. This covers hospital fees, specialist fees, and diagnostics.
- Day-patient Treatment: When a member is admitted to a hospital for a planned procedure but does not stay overnight (e.g., minor surgery).
- Cancer Cover: This is a vital component. Most policies offer extensive cancer cover, including surgery, chemotherapy, and radiotherapy. The level of cover can vary, so it's a key area to compare.
2. Optional Add-ons
This is where you can tailor the policy. Common options include:
- Out-patient Cover: This is the most popular add-on. It covers diagnostic tests and specialist consultations that do not require a hospital admission. Without this, an employee would need an NHS diagnosis before they could use their PMI for treatment. Cover is usually limited to a set monetary value per year (e.g., £500, £1,000, or unlimited).
- Therapies Cover: Covers treatments like physiotherapy, osteopathy, and chiropractic care. Essential for businesses with physically active staff or a high incidence of musculoskeletal issues.
- Mental Health Cover: A crucial and increasingly requested benefit. This can range from access to counselling helplines to full cover for psychiatric treatment.
- Dental & Optical Cover: Provides money back for routine check-ups, glasses, and dental treatments.
3. Underwriting: Deciding How Pre-existing Conditions are Handled
Underwriting is the most critical and often misunderstood part of a policy. It's the method an insurer uses to decide what they will and won't cover, particularly regarding previous medical issues.
| Underwriting Type | How It Works | Best For |
|---|---|---|
| Moratorium (Mori) | The most common type for SMEs. No medical questionnaire is needed upfront. The policy automatically excludes any condition a member has had symptoms, treatment, or advice for in the 5 years before joining. However, if they go 2 full years on the policy without any issues relating to that condition, it may become eligible for cover. | Small businesses wanting a quick and easy setup. |
| Full Medical Underwriting (FMU) | Each employee completes a full health questionnaire. The insurer assesses their medical history and applies specific, named exclusions to their policy from day one. | Businesses that want complete clarity on what is and isn't covered from the start. Can sometimes be cheaper than a Moratorium. |
| Medical History Disregarded (MHD) | The premium option. The insurer agrees to cover eligible new conditions and pre-existing conditions. No medical history is required. This is a powerful benefit but comes at a higher cost. | Larger groups (typically 20+ employees) looking to provide the most comprehensive cover possible as a key recruitment tool. |
| Continued Personal Medical Exclusions (CPME) | Used when a company is switching its health insurance provider. It ensures that employees remain on the same underwriting terms they had with their previous insurer, preventing any new exclusions from being added for conditions that were already covered. | Any business looking to switch their PMI provider without disadvantaging their staff. |
Adviser Tip: Choosing the wrong underwriting can lead to rejected claims and frustrated staff. A broker like WeCovr can explain the pros and cons of each type for your specific business, ensuring there are no surprises down the line.
4. The Policy Excess
An excess is a fixed amount an employee pays towards their claim. It works just like the excess on a car or home insurance policy.
- How it works: An employee might have a £100 excess. If their treatment costs £2,000, they pay the first £100, and the insurer pays the remaining £1,900.
- Per claim vs. Per year: The excess can be applied once per policy year or for each new claim. A 'per year' excess is generally more favourable.
- Impact on premium: A higher excess leads to a lower premium. Offering a range of excess options (e.g., £0, £100, £250) can be a great way to manage costs while giving employees flexibility.
5. Hospital Lists
Insurers group UK private hospitals into tiers or "lists". The list your policy uses has a direct impact on the premium.
- Tier 1 (Local): A curated list of hospitals, often excluding expensive central London facilities. The most cost-effective option.
- Tier 2 (National): A comprehensive list of several hundred private hospitals across the UK.
- Tier 3 (Premium/London): A full national list that includes the high-end private hospitals in central London (e.g., The Lister, The Cromwell).
For most businesses outside the M25, a national list is perfectly adequate. Choosing the right list is a simple way to control costs without sacrificing quality of care.
Comparing the UK's Leading Business Health Insurance Providers
The UK market is dominated by a few key players, each with unique strengths. It's vital to compare them on more than just price. A specialist broker is essential here, as they can secure quotes that are truly comparable.
| Provider | Key Strengths & Focus | Unique Features | Best Suited For |
|---|---|---|---|
| AXA Health | Strong clinical focus, excellent digital tools, and comprehensive pathways for cancer and heart conditions. Well-regarded for their flexible SME policies. | 'Doctor@Hand' digital GP service, comprehensive mental health support, 'Health Gateway' portal for easy admin. | SMEs and corporates looking for a trusted brand with strong digital integration and flexible cover options. |
| Bupa | The UK's best-known health insurance brand. Extensive hospital network and a huge range of direct-access services for cancer and mental health. | 'Bupa Blua Health' digital GP, direct access for many conditions (no GP referral needed), strong mental health pathways, large owned network of facilities. | Businesses of all sizes, particularly those where brand recognition and trust are paramount for employees. |
| Aviva | A major UK insurer with a strong reputation. Offers excellent value and a 'Clinical Essentials' guide on policies to direct members to quality-assured specialists. | 'Aviva Digital GP', 'BacktoBetter' musculoskeletal pathway, strong mental health support including a dedicated line. | Companies seeking a high-quality, value-driven policy from a large, financially robust insurer. |
| Vitality | Unique 'Shared Value' model that rewards healthy behaviour. Integrates wellness and insurance, actively encouraging employees to be healthier. | The Vitality Programme (discounts on gym memberships, smartwatches, healthy food), rewards for being active, comprehensive cover options. | Companies with a young, active workforce or those wanting to build a proactive wellness culture, not just an insurance plan. |
| WPA | A non-profit provident association known for exceptional customer service and flexible policies, particularly for SMEs and professionals. | Freedom of choice for specialists, often processes claims without GP referrals, 'Health' app for policy management. | SMEs, professional firms (e.g., law, accountancy), and businesses that prioritise customer service and flexibility. |
Expert Insight: No single provider is "the best". The right choice depends entirely on your company's demographics, budget, and priorities. Vitality's wellness model might be perfect for a tech startup, while Bupa's brand trust might be better for a traditional professional services firm. This is where tailored advice from a broker adds immense value.
How Much Does Business Private Medical Insurance Cost?
The cost of a business PMI policy is determined by several key factors. Understanding these will help you see where you can adjust your cover to meet your budget.
Main Factors Influencing Your Premium:
- Average Age of Employees: Premiums are age-banded. The older your workforce, the higher the average cost per person.
- Location: The cost of private treatment varies across the country. A business based in Central London will pay more than one in rural Scotland.
- Level of Cover: A basic, in-patient-only plan will be far cheaper than a comprehensive policy with unlimited out-patient, mental health, and therapies cover.
- Excess Level: Choosing a £250 excess instead of £0 will significantly reduce the premium.
- Underwriting Type: Medical History Disregarded (MHD) is the most expensive option, while Moratorium and FMU are more cost-effective.
- Industry: Some industries with higher risks of occupational injury may attract slightly higher premiums.
Illustrative Cost Examples
To give you a rough idea, here are some sample monthly costs per employee. These are for illustrative purposes only and can vary significantly.
| Company Profile | Basic Cover (In-patient, Core Cancer) | Comprehensive Cover (Incl. Out-patient & Therapies) |
|---|---|---|
| Startup (5 employees, avg. age 32) | £30 - £45 per employee/month | £60 - £85 per employee/month |
| SME (25 employees, avg. age 38) | £38 - £55 per employee/month | £70 - £95 per employee/month |
| Corporate (100 employees, avg. age 41) | £45 - £65 per employee/month | £80 - £110 per employee/month |
Note: These figures assume a standard hospital list, £100 excess, and Moratorium underwriting. Your actual quote will depend on the specific factors listed above.
The Tax Implications of Business PMI
Understanding the tax treatment is essential for both the business and its employees.
- For the Business: The premiums paid for a business health insurance policy are generally considered an allowable business expense. This means you can deduct the cost from your pre-tax profits, reducing your Corporation Tax bill.
- For the Employee: Business PMI is treated as a benefit-in-kind. This means the value of the premium is added to their income, and they will pay income tax on it. The employer is responsible for reporting this to HMRC on a P11D form for each employee covered.
Example: An employee is a basic rate (20%) taxpayer. Their health insurance premium costs the company £700 for the year.
- The employee will pay 20% of £700 in income tax, which is £140 for the year (or £11.67 per month).
- The business can claim the £700 premium as a business expense.
It is vital to communicate this clearly to employees so they understand the personal tax implications of being added to the company scheme.
How to Compare and Switch Policies with WeCovr
Whether you're a first-time buyer or looking to switch from an existing provider, a structured approach is key. At WeCovr, we simplify this entire process at no cost to you.
- Define Your Goals: We start by understanding your business. What's your budget? What benefits are most important to your team—fast diagnostics, mental health, or physiotherapy? Who do you want to cover?
- Market Review: We use our expertise and technology to search the entire market, including the leading providers like AXA, Bupa, Aviva, and Vitality. We ensure we are comparing on a like-for-like basis.
- Analyse & Recommend: We present you with a clear, easy-to-understand comparison of the quotes we've secured. We'll explain the differences in cover, the pros and cons of each option, and provide our expert recommendation based on your initial goals.
- Implementation & Support: Once you've made a choice, we handle all the paperwork to get your policy set up. If you're switching, we ensure it's done on a CPME basis to protect your team's existing cover.
As a WeCovr client, you also get complimentary access to our AI-powered calorie and nutrition tracking app, CalorieHero, and benefit from discounts on other business and personal insurance policies.
Ready to find the best health cover for your team?
Frequently Asked Questions (FAQ)
Does business health insurance cover pre-existing conditions?
Is business private medical insurance a taxable benefit?
What is the difference between an excess and a 6-week option?
Can I cover my family on a business PMI policy?
Get Your Free Business PMI Comparison Today
Choosing the right private medical insurance is a powerful statement about how much you value your team. It protects your people, your productivity, and your bottom line. But with so many variables, expert guidance is crucial.
Let our team of independent specialists do the hard work for you. We'll compare the UK's leading insurers to find a policy that delivers maximum value for your budget and robust protection for your employees.
Contact WeCovr today for a free, no-obligation market comparison and receive your personalised quotes.
