Corporate Health Insurance for Large Companies in the UK

As an FCA-authorised expert helping businesses navigate complex insurance needs, WeCovr understands that protecting your people is as vital as protecting your assets. This guide explores structuring corporate health insurance, a key part of your duty of care, alongside essential considerations for your company's motor insurance in the UK.

An HR managers guide to structuring corporate PMI packages

For Human Resources managers in large UK companies, designing an effective benefits package is a perpetual challenge. You need to attract and retain top talent, boost productivity, and manage costs—all while demonstrating a genuine commitment to employee wellbeing. Corporate Private Medical Insurance (PMI) is one of the most valued and impactful benefits you can offer.

This comprehensive guide will walk you through every aspect of structuring a corporate PMI scheme, from understanding the core components to navigating the tax implications and linking employee health to wider corporate risk, such as fleet safety.

Understanding Corporate Private Medical Insurance (PMI) in the UK

In simple terms, Corporate PMI is a health insurance policy paid for by an employer that gives employees access to private medical care. In a time of significant pressure on the NHS, with the British Medical Association reporting record waiting lists, PMI offers a tangible solution for employees seeking prompt diagnosis and treatment.

How does it work? Typically, if an employee feels unwell, they will first visit their NHS GP. If the GP recommends further tests or specialist consultation, the employee can use their PMI policy to be referred to a private consultant and hospital. This bypasses the NHS waiting list, allowing for faster access to care.

Key Benefits for the Employer:

• Reduced Absenteeism: Faster treatment means employees return to work sooner. The Office for National Statistics (ONS) estimated that 185.6 million working days were lost because of sickness or injury in 2022, the highest since records began. PMI can directly reduce this figure.
• Talent Attraction & Retention: A strong health and wellbeing package is a powerful differentiator in a competitive job market. It signals that you are an employer who cares.
• Increased Productivity: A healthy workforce is a productive one. Employees who aren't worried about their health or waiting for treatment are more focused and engaged.
• Duty of Care: Demonstrates a proactive approach to looking after your team's physical and mental health.

Key Benefits for the Employee:

• Speed of Access: Significantly shorter waiting times for consultations, scans, and surgery.
• Choice and Control: Employees often have a choice of specialist and hospital from an approved list.
• Comfort and Privacy: Access to private rooms in hospitals.
• Access to Specialist Drugs & Treatments: Some treatments and drugs not yet available on the NHS may be covered.

The Core Components of a Corporate PMI Policy

Not all PMI policies are created equal. As an HR manager, your role is to work with your provider or broker to build a package that balances comprehensive cover with your organisation's budget. Here are the fundamental building blocks.

In-patient and Day-patient Treatment

This is the foundation of any PMI policy.

• In-patient Cover: This applies when an employee is admitted to a hospital bed overnight or longer for treatment, such as major surgery.
• Day-patient Cover: This covers procedures where the employee is admitted to hospital for a day but does not stay overnight (e.g., minor surgical procedures like cataract removal).

Virtually all policies cover these treatments in full, including hospital accommodation, nursing care, surgeon and anaesthetist fees, and specialist consultations while in hospital.

Out-patient Cover

This is one of the most significant variables affecting the cost of a policy. Out-patient cover pays for diagnostic tests and consultations that do not require a hospital stay. This includes:

• Specialist consultations
• MRI, CT, and PET scans
• X-rays and blood tests
• Physiotherapy and other therapies

You can structure this cover in several ways:

Cancer Cover

Comprehensive cancer cover is often a primary reason for taking out PMI. Insurers typically offer extensive support, from diagnosis through to treatment and aftercare. Policies will specify what is covered, but this often includes:

• Chemotherapy and radiotherapy
• Surgical procedures
• Advanced therapies and new-generation drugs
• Palliative care and end-of-life support
• Wig provision, prosthetics, and cash benefits for NHS treatment

Mental Health Support

Mental health is no longer a peripheral issue. According to the Health and Safety Executive (HSE), stress, depression, or anxiety accounted for 49% of all work-related ill-health cases in 2022/23. Providing robust mental health support is not just ethical; it's a commercial imperative, especially when considering its impact on roles that require high concentration, such as driving.

Mental health cover can range from a limited number of talking therapy sessions (counselling, CBT) to full cover for psychiatric treatment, including in-patient stays. This is a crucial area to invest in, as it directly impacts employee presence, focus, and safety.

Connecting Employee Wellbeing to Corporate Risk: The Fleet Insurance Perspective

A responsible large company manages all its risks holistically. An employee suffering from stress, anxiety, or lack of sleep due to a health concern is not just a productivity risk; they are a safety risk, particularly if they drive a company vehicle. This is where your PMI strategy directly intersects with your fleet insurance and duty of care on the road.

An unwell, distracted, or fatigued driver is a major liability. Data from the Department for Transport consistently shows that driver error is a factor in the vast majority of road traffic accidents. By investing in PMI, especially with strong mental health and fast-track physiotherapy support, you are investing in safer drivers and a lower accident rate for your fleet.

The Legal Imperative: UK Motor Insurance Requirements

For any business operating vehicles on UK roads, the law is unequivocal. The Road Traffic Act 1988 mandates that all vehicles must have, at a minimum, third-party insurance. For a large company, understanding these levels is the first step in risk management.

1. Third-Party Only (TPO): This is the absolute legal minimum level of motor insurance in the UK. It covers injury or damage you cause to other people, their vehicles, or their property. It does not cover any damage to your own company vehicle or any injuries to your driver.
2. Third-Party, Fire and Theft (TPFT): This includes everything in TPO, plus it covers your own vehicle if it is stolen or damaged by fire.
3. Comprehensive: This is the highest level of cover. It includes everything in TPFT but also covers damage to your own vehicle and driver injuries in an accident, even if the accident was your driver's fault. For any business, especially one with valuable vehicles and a reputation to protect, Comprehensive cover is the standard choice.

WeCovr, as an FCA-authorised broker, specialises in helping businesses find the right level of motor policy, from single business cars to large, complex fleets, ensuring you are legally compliant and financially protected.

Managing Your Fleet: A Holistic Approach

Effective fleet management goes beyond just buying the right vehicle cover. It’s about creating a culture of safety that is supported by your company's broader wellbeing initiatives.

• Driver Health: Your PMI scheme plays a direct role here. Quick access to physiotherapy for a bad back or mental health support for stress can prevent an accident waiting to happen.
• Telematics: Many modern fleet insurance policies use telematics data (black box technology) to monitor driving style. This data can be used to coach drivers on safer habits (e.g., smoother braking, speed adherence) and can lead to significant premium reductions for well-managed fleets.
• Driver Training: Regular training, especially for high-mileage drivers, reinforces best practices and updates them on legal changes.
• Vehicle Maintenance: A robust, documented maintenance schedule is essential for safety and is often a condition of the insurance policy.

The Financials of Fleet Insurance: Premiums, Excess, and No-Claims

• No-Claims Bonus (NCB): Just like personal car insurance, fleets earn a discount for every year they go without making a claim. A single accident can have a significant impact on this bonus and, therefore, the following year's premium.
• Excess: This is the amount the company agrees to pay towards any claim. A higher excess will lower the premium, but you must ensure it's an amount the business can comfortably afford to pay in the event of an incident.
• Claims Impact: A high frequency of accidents will lead to a sharp increase in premiums, as insurers will view your fleet as a higher risk. This is why a preventative approach, linking driver wellbeing to safety, is so commercially astute.

Structuring Your PMI Package: Key Decisions for HR Managers

Once you've decided on the core components, you need to make several structural decisions that will define how your scheme operates and what it costs.

1. Underwriting Options

Underwriting determines how the insurer assesses the risk of your workforce and treats pre-existing medical conditions. For large companies, the options are very different from personal policies.

For most large companies, Medical History Disregarded (MHD) is the preferred route due to its simplicity and comprehensive nature.

2. Choosing the Level of Cover and Employee Tiers

Do you offer the same level of cover to everyone, or do you create different tiers based on seniority?

• Universal Cover: Offering the same strong package to all employees is excellent for morale and promotes a flat, inclusive culture.
• Tiered Cover: A common approach is to offer a more comprehensive plan (e.g., with full out-patient, dental, and optical) to senior management and a core plan to the rest of the workforce. This is a way to manage costs while still providing a valuable benefit to all.

3. The 'Six Week Option'

This is a popular cost-containment feature. If the NHS can provide the required in-patient treatment within six weeks of it being recommended, the employee will be treated by the NHS. If the waiting list is longer than six weeks, the PMI policy will cover private treatment. This can reduce premiums by as much as 20-25%, as it means the policy only pays for treatment where the NHS cannot deliver it promptly.

4. Selecting a Hospital List

Insurers group UK private hospitals into bands or lists, usually based on cost. The hospital list you choose for your policy directly impacts the premium. Common options include:

• A list that excludes expensive central London hospitals.
• A national list that includes most private hospitals across the UK.
• A premium list that includes all hospitals, including the most prestigious ones in London.

You can offer different hospital lists to different tiers of employees as another way to manage the overall scheme cost.

Enhancing Your Benefits Package: Value-Added Services and Optional Extras

Modern PMI is about more than just treatment; it’s about proactive health and wellbeing. Insurers now offer a suite of valuable extras that can make your package even more attractive.

Common PMI Add-ons:

• Dental and Optical Cover: Can be added to cover routine check-ups, treatments, and eyewear.
• Travel Insurance: A corporate travel policy can be integrated with your PMI.
• Therapies Cover: Extends cover for services like physiotherapy, osteopathy, and chiropractic treatment.

Wellbeing Programmes & Digital Health Tools:

This is a fast-growing area and a key differentiator between providers. Look for schemes that include:

• Digital GP / Virtual GP: 24/7 access to a GP via phone or video call, providing instant advice and prescriptions. This is hugely popular and reduces time taken off work for minor appointments.
• Employee Assistance Programmes (EAP): Confidential support lines for a range of issues, including financial worries, legal advice, and mental health crises.
• Health and Wellbeing Apps: Tools for tracking fitness, mindfulness exercises, nutritional advice, and health assessments.
• Discounts: Many providers (like Vitality) build their model around rewarding healthy behaviour with discounts on gym memberships, fitness trackers, and healthy food.

This mirrors the approach taken in motor insurance, where optional extras are key to tailoring a policy. For your fleet, you wouldn't just buy the core cover; you would add:

• Breakdown Cover: Essential for keeping your employees on the road.
• Legal Expenses Cover: To recover uninsured losses (like your policy excess) if your driver is in a non-fault accident.
• Guaranteed Courtesy Car/Van: Ensuring a suitable replacement vehicle is available to minimise business disruption.

An expert broker like WeCovr can advise on a bundled approach, ensuring your benefits are complementary. WeCovr even offers discounts on other types of cover for clients who purchase motor or life insurance through us, delivering greater value across your entire insurance portfolio.

The Financials: P11D, Tax Implications, and Budgeting

It is vital that both the company and the employees understand the tax implications of a PMI scheme.

• Benefit in Kind (BIK): Because the company is paying for a personal benefit, HMRC classes corporate PMI as a 'benefit in kind'. This means the employee has to pay income tax on the value of the premium. The company must calculate the value for each employee and report it on a P11D form at the end of the tax year. The 'cash equivalent' value of the benefit is then added to the employee's income for tax purposes.
• Insurance Premium Tax (IPT): The premium the company pays to the insurer is subject to Insurance Premium Tax, which currently stands at 12%. This should be factored into your budgeting.
• Budgeting: The cost of a scheme can vary dramatically. Key factors include:

Implementing Your Corporate PMI Scheme: A Step-by-Step Guide

1. Define Your Objectives: Be clear on what you want to achieve. Is it to reduce sickness absence by 10%? To become the employer of choice in your sector? Your goals will shape your design.
2. Gather Anonymous Data: You will need a list of all employees to be covered, including their date of birth, postcode, and job function. This data is anonymised for the quoting stage.
3. Engage an Expert Broker: The corporate PMI market is complex. A specialist, independent health insurance broker will understand your needs, canvas the entire market (including major providers like Bupa, AXA Health, Aviva, and Vitality), and present you with a clear comparison of the best options. This saves you time and money.
4. Review and Select: Compare the quotes not just on price, but on the details: the hospital list, the out-patient limits, the mental health support, the digital tools, and the insurer's service reputation.
5. Communicate the Launch: A successful launch is critical. Hold presentations, create clear and simple documents, and explain exactly how to use the benefit. Crucially, be transparent about the P11D tax implications so there are no surprises for employees.
6. Manage and Review: Your PMI scheme is not a 'set and forget' product. You should review it annually with your broker. Analyse claims data (provided by the insurer) to spot trends. Is there a high number of musculoskeletal claims? Perhaps you need better ergonomic assessments. Are mental health claims rising? This could signal a need for more proactive management support.

The Future of Corporate Health and Wellbeing

The world of employee benefits is evolving rapidly, driven by technology and a greater understanding of what makes a workforce thrive.

• Hyper-Personalisation: Insurers are using AI and data to move towards more personalised wellbeing journeys for employees, rather than a one-size-fits-all approach.
• A Focus on Prevention: The model is shifting from simply treating sickness to proactively preventing it. Expect to see more integrated services that reward healthy living, encourage health screenings, and use data from wearables to provide early warnings.
• Holistic Wellbeing: Leading companies are now integrating physical, mental, and financial wellbeing support, recognising that stress in one area impacts all others.

This holistic approach is mirrored in the evolution of fleet insurance, where telematics and AI are used not just to assess blame after an accident, but to prevent it by coaching better driving habits in real-time. The future is about managing risk and promoting wellbeing proactively, and your PMI and motor insurance strategies should be at the heart of this.

Structuring a benefits package that truly supports your employees while managing corporate risk is a complex task. From comprehensive Private Medical Insurance to robust fleet insurance, getting the details right is paramount.

Ready to ensure your business vehicles have the best possible protection? Contact the FCA-authorised experts at WeCovr today for a free, no-obligation comparison and quote on your motor insurance UK needs.