Group PMI Policies Maximising Staff Benefits
As an FCA-authorised broker that has helped arrange over 900,000 policies, WeCovr understands the vital role a strong benefits package plays in a successful UK business. This guide explores how group private medical insurance (PMI) can become the cornerstone of your employee wellness strategy, boosting morale and your bottom line.
Guide for employers on setup and tax tips
Navigating the world of corporate health benefits can seem complex, but the rewards are significant. Offering group private medical insurance is a powerful statement about how much you value your team. This comprehensive guide will walk you through the process, from understanding the core benefits to mastering the setup and navigating the tax landscape.
What is Group Private Medical Insurance (PMI)?
Group private medical insurance is a single policy taken out by an employer to provide healthcare cover for its employees. Instead of individuals seeking out their own cover, the business arranges it on their behalf, often securing more favourable terms and broader cover than an individual could typically access.
It’s designed to work alongside the NHS, offering your staff quicker access to diagnosis and treatment for acute conditions.
Critical Point: Standard UK private medical insurance is designed for acute conditions—illnesses or injuries that are likely to respond quickly to treatment. It does not cover pre-existing conditions (ailments you had before joining) or chronic conditions (long-term illnesses like diabetes, asthma, or high blood pressure that require ongoing management rather than a cure).
The primary benefit is speed. With NHS waiting lists reaching record levels—the referral to treatment (RTT) waiting list in England stood at around 7.54 million in late 2024—PMI allows employees to bypass these queues, see a specialist, and receive treatment promptly.
Why Should Your Business Offer Group Health Cover?
Investing in your team's health is one of the smartest financial decisions a business can make. The benefits extend far beyond simply providing medical care; they create a resilient, motivated, and loyal workforce.
Tangible Benefits for Your Business
-
Reduced Sickness Absence: A healthier workforce means fewer sick days. According to the Office for National Statistics (ONS), an estimated 185.6 million working days were lost because of sickness or injury in the UK in 2022. With PMI, employees get diagnosed and treated faster, enabling a quicker return to work and minimising disruption.
-
Enhanced Staff Retention: A generous benefits package makes employees feel valued. In a competitive job market, health insurance is a highly sought-after perk that can significantly improve loyalty and reduce costly staff turnover.
-
A Powerful Recruitment Tool: When a candidate is weighing up two similar job offers, a comprehensive health plan can be the deciding factor. It signals that you are a caring employer willing to invest in your people's long-term wellbeing.
-
Increased Productivity and Morale: When employees aren't worried about their health or languishing on waiting lists, they are more focused, engaged, and productive. Knowing they have support reduces stress and boosts overall morale.
Invaluable Benefits for Your Employees
- Fast-Track Medical Care: Swift access to consultations, diagnostic tests (like MRI and CT scans), and treatment.
- Choice and Control: Employees often have a choice of leading specialists and a nationwide network of high-quality private hospitals.
- 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: The psychological benefit of knowing you and your family can get help when you need it most is immeasurable.
Setting Up Your Group PMI Policy: A Step-by-Step Guide
Creating a group scheme is a structured process. Following these steps will ensure you build a plan that aligns with your company's goals and budget.
Step 1: Define Your Objectives and Budget
Before looking at policies, ask yourself:
- What is our goal? Is it to reduce absenteeism, boost recruitment, or simply reward our staff?
- Who do we want to cover? The entire company, specific teams, or management only?
- What is our budget? Work out a realistic cost per employee per month or year. This will be the single biggest factor in determining the level of cover you can offer.
Step 2: Choose Who to Cover
You have flexibility in how you structure your scheme:
- All Employees: This is the most inclusive approach and fosters a strong sense of company-wide equality.
- Defined Groups: You can create different tiers of cover. For example, senior managers might receive a comprehensive policy, while other staff receive a more basic level of cover. This can help manage costs but must be handled carefully to avoid perceived inequality.
- Voluntary Schemes: You can facilitate a scheme where employees can opt-in and pay for their own cover, but at a discounted corporate rate you've negotiated.
Step 3: Select the Right Level of Cover
PMI policies are built from a core foundation with optional extras. Understanding these components is key to tailoring your plan.
| Level of Cover | Description | Best For |
|---|---|---|
| Basic | Covers in-patient and day-patient treatment (requiring a hospital bed). Often has limits on out-patient diagnostics and consultations. | Businesses on a tight budget looking to provide a safety net for major medical events. |
| Mid-Range | Includes full in-patient cover plus a reasonable allowance for out-patient diagnostics, consultations, and therapies. | The most popular choice, offering a great balance between comprehensive cover and cost. |
| Comprehensive | Full cover for in-patient and out-patient treatment. Often includes add-ons like mental health, dental, and optical cover as standard or at a reduced cost. | Companies wanting to offer a top-tier benefits package to attract and retain senior talent. |
Common Add-ons to Consider:
- Out-patient Cover: For specialist consultations and diagnostic tests that don't require a hospital bed. This is arguably the most valuable part of PMI, as it speeds up diagnosis.
- Mental Health Cover: Provides access to therapy, counselling, and psychiatric support. In today's climate, this is a highly valued benefit.
- Dental and Optical Cover: Helps with the costs of routine check-ups, treatments, and new eyewear.
- Therapies: Covers physiotherapy, osteopathy, and chiropractic treatment.
Step 4: Understand Underwriting Options
Underwriting is how an insurer assesses risk. The method you choose has a big impact on what is covered, especially concerning pre-existing conditions.
| Underwriting Type | How It Works | Best For |
|---|---|---|
| Moratorium (Mori) | No medical questionnaire is needed upfront. Instead, the insurer applies a waiting period (usually 2 years) during which they won't cover conditions that existed in the 5 years before the policy started. | Small groups (2-19 employees) who want a quick and simple setup. |
| Full Medical Underwriting (FMU) | Each employee completes a detailed health questionnaire. The insurer then decides what to cover and may apply specific exclusions to individuals based on their medical history. | Very small groups or where clarity on cover from day one is essential. |
| Medical History Disregarded (MHD) | The insurer agrees to cover eligible pre-existing conditions. No medical information is required from employees. This is the 'gold standard' of group cover. | Larger groups, typically 20+ employees. It is a major selling point for staff. |
| Continued Personal Medical Exclusions (CPME) | For groups switching from another provider. It ensures that employees carry over the same underwriting terms they had on their previous policy, providing continuity of cover. | Businesses looking to switch their PMI provider without disadvantaging their staff. |
Step 5: Partner with an Expert PMI Broker
Trying to compare the complex offerings from providers like Bupa, AXA, Aviva, and Vitality can be overwhelming. A specialist broker does the hard work for you.
An independent, FCA-authorised broker like WeCovr provides impartial advice, comparing the entire market to find a policy that matches your specific needs and budget. We can explain the nuances of each policy, negotiate terms on your behalf, and help with the setup and annual review process—all at no cost to your business.
The Financials: Understanding Costs and Tax Implications
A clear understanding of the costs and tax rules is essential for any employer considering group PMI.
How Are Group PMI Premiums Calculated?
Insurers consider several factors to determine your company's premium:
- Average Age: A younger workforce will generally result in a lower premium.
- Company Size: Larger groups often benefit from lower per-person rates.
- Industry: Some professions (e.g., manual labour) are considered higher risk than office-based roles.
- Location: Premiums can be higher in areas with more expensive private hospitals, such as Central London.
- Level of Cover: Comprehensive policies cost more than basic ones.
- Excess: A higher policy excess (the amount an employee pays towards a claim) will lower the premium.
Tax Implications Explained
The tax treatment of group PMI is a key consideration. It's beneficial for the company but creates a small tax liability for the employee.
| Party | Tax Treatment | How it Works |
|---|---|---|
| The Employer | Premiums are an allowable business expense. | The total cost of the premiums can be deducted from your company's revenue before calculating your Corporation Tax bill. With Corporation Tax at 25%, this provides a significant saving. |
| The Employer | Employer must pay Class 1A National Insurance. | You must pay National Insurance Contributions (currently 13.8%) on the value of the benefit provided to each employee. |
| The Employee | PMI is a taxable benefit-in-kind (BIK). | The value of the premium is treated as additional income for the employee, who must pay income tax on it at their marginal rate (20%, 40%, or 45%). |
Example of Tax Calculation:
Let's assume your company pays a £700 annual premium for an employee who is a basic-rate (20%) taxpayer.
-
Employer's Position:
- Corporation Tax Saving: The £700 premium is a business expense. The company saves £175 in Corporation Tax (£700 x 25%).
- National Insurance Cost: The company must pay Class 1A NICs of £96.60 (£700 x 13.8%).
- Net Cost to Employer: £700 (Premium) - £175 (Tax Saving) + £96.60 (NICs) = £621.60
-
Employee's Position:
- Income Tax Liability: The employee pays tax on the benefit. £700 x 20% = £140 for the year, or about £11.67 per month.
The employer is responsible for reporting this benefit to HMRC on a P11D form for each employee who receives the cover.
Maximising the Value of Your PMI Policy: Beyond Medical Treatment
Modern private medical insurance UK policies are evolving into holistic health and wellbeing platforms. To get the most from your investment, encourage your staff to engage with all the available features.
Promote Integrated Wellness Programmes
Most leading providers now include a wealth of added-value services at no extra cost:
- Digital GP: 24/7 access to a GP via phone or video call, often with the ability to get prescriptions delivered. This is incredibly convenient and reduces time away from work for minor appointments.
- Mental Health Support: Access to confidential helplines, therapy sessions (often without needing a GP referral), and mindfulness apps like Headspace or Calm.
- Wellness Incentives: Providers like Vitality are famous for rewarding healthy behaviour. Employees can earn discounts on gym memberships, smartwatches, and healthy food by tracking their activity.
- Health and Fitness Resources: Many insurers offer online portals with fitness plans, nutritional advice, and health assessments.
As a WeCovr client, your employees also gain complimentary access to our proprietary AI-powered calorie and nutrition tracking app, CalorieHero. This tool integrates seamlessly into a broader wellness strategy, helping staff manage their diet and achieve health goals.
Effective Communication is Key
You can have the best PMI policy in the world, but it's worthless if your staff don't know how to use it.
- Launch and Onboard: When you introduce the scheme, hold a meeting or webinar (perhaps with your broker) to explain the benefits and the claims process.
- Include in a Benefits Hub: Create a central place on your company intranet with policy documents, contact numbers, and a simple guide on how to make a claim.
- Regular Reminders: Use internal newsletters or team meetings to remind staff about the wellness features, like the 24/7 Digital GP or mental health support line.
Annual Policy Review
The private health cover market is dynamic, with prices and features changing constantly. It is crucial to review your policy every year before renewal. An expert broker like WeCovr will proactively manage this for you, re-broking the market to ensure you continue to get the best value without compromising on the quality of cover for your team. Furthermore, clients who purchase PMI or Life Insurance through us may be eligible for discounts on other types of insurance cover.
Comparing Top UK Group PMI Providers
While a direct price comparison requires a bespoke quote, you can compare providers based on their core strengths and focus areas. WeCovr works with all these leading insurers and more to find the perfect match for your business.
| Provider | Key Selling Point / Focus | Typical Wellness Features |
|---|---|---|
| AXA Health | Strong clinical focus and a wide range of flexible options. Excellent muscle, bone, and joint support pathways. | 24/7 online GP, dedicated mental health support, 'Health at Hand' medical information line. |
| Bupa | One of the most recognised healthcare brands in the UK, with its own network of hospitals and clinics. Known for comprehensive cover. | Digital GP, mental health services, extensive online health hub with advice and tools. |
| Aviva | Known for its 'Expert Select' hospital list to manage costs and a strong digital offering. Good value and comprehensive options. | 24/7 GP, stress counselling helpline, discounts on gym memberships and health tech. |
| Vitality | Unique focus on incentivising healthy living. Rewards employees for being active, which can also reduce the employer's premium at renewal. | Discounted smartwatches, gym memberships, cinema tickets, and healthy food, all linked to activity tracking. |
FAQs: Your Group PMI Questions Answered
Is Group PMI a taxable benefit for employees in the UK?
What is the minimum number of employees for a group policy?
Are pre-existing and chronic conditions covered by Group PMI?
Can we offer different levels of cover to different staff members?
Take the Next Step
Ready to enhance your employee benefits package and invest in your team's health? A well-structured Group PMI policy is a clear sign of a forward-thinking, supportive employer.
The expert advisors at WeCovr are here to help. We compare the market to find a policy that fits your business needs and budget, handling all the complexity so you can focus on running your business. Our service is provided at no cost to you.
Related guides
Why private medical insurance and how does it work?
What is Private Medical Insurance?
Private medical insurance (PMI) is a type of health insurance that provides access to private healthcare services in the UK. It covers the cost of private medical treatment, allowing you to bypass NHS waiting lists and receive faster, more convenient care.How does it work?
Private medical insurance works by paying for your private healthcare costs. When you need treatment, you can choose to go private and your insurance will cover the costs, subject to your policy terms and conditions. This can include:• Private consultations with specialists
• Private hospital treatment and surgery
• Diagnostic tests and scans
• Physiotherapy and rehabilitation
• Mental health treatment
Your premium depends on factors like your age, health, occupation, and the level of cover you choose. Most policies offer different levels of cover, from basic to comprehensive, allowing you to tailor the policy to your needs and budget.
Questions to ask yourself regarding private medical insurance
Just ask yourself:👉 Are you concerned about NHS waiting times for treatment?
👉 Would you prefer to choose your own consultant and hospital?
👉 Do you want faster access to diagnostic tests and scans?
👉 Would you like private hospital accommodation and better food?
👉 Do you want to avoid the stress of NHS waiting lists?
Many people don't realise that private medical insurance is more affordable than they think, especially when you consider the value of faster treatment and better facilities. A great insurance policy can provide peace of mind and ensure you receive the care you need when you need it.
Benefits offered by private medical insurance
Private medical insurance provides numerous benefits that can significantly improve your healthcare experience and outcomes:Faster Access to Treatment
One of the biggest advantages is avoiding NHS waiting lists. While the NHS provides excellent care, waiting times can be lengthy. With private medical insurance, you can often receive treatment within days or weeks rather than months.
Choice of Consultant and Hospital
You can choose your preferred consultant and hospital, giving you more control over your healthcare journey. This is particularly important for complex treatments where you want a specific specialist.
Better Facilities and Accommodation
Private hospitals typically offer superior facilities, including private rooms, better food, and more comfortable surroundings. This can make your recovery more pleasant and potentially faster.
Advanced Treatments
Private medical insurance often covers treatments and medications not available on the NHS, giving you access to the latest medical advances and technologies.
Mental Health Support
Many policies include comprehensive mental health coverage, providing faster access to therapy and psychiatric care when needed.
Tax Benefits for Business Owners
If you're self-employed or a business owner, private medical insurance premiums can be tax-deductible, making it a cost-effective way to protect your health and your business.
Peace of Mind
Knowing you have access to private healthcare when you need it provides invaluable peace of mind, especially for those with ongoing health conditions or concerns about NHS capacity.
Private medical insurance is particularly valuable for those who want to take control of their healthcare journey and ensure they receive the best possible treatment when they need it most.
Important Fact!
We can look at a more suitable option mid-term!
Why is it important to get private medical insurance early?
👉 Many people are very thankful that they had their private medical insurance cover in place before running into some serious health issues. Private medical insurance is as important as life insurance for protecting your family's finances.👉 We insure our cars, houses, and even our phones! Yet our health is the most precious thing we have.
Easily one of the most important insurance purchases an individual or family can make in their lifetime, the decision to buy private medical insurance can be made much simpler with the help of FCA-authorised advisers. They are the specialists who do the searching and analysis helping people choose between various types of private medical insurance policies available in the market, including different levels of cover and policy types most suitable to the client's individual circumstances.
It certainly won't do any harm if you speak with one of our experienced insurance experts who are passionate about advising people on financial matters related to private medical insurance and are keen to provide you with a free consultation.
You can discuss with them in detail what affordable private medical insurance plan for the necessary peace of mind they would recommend! WeCovr works with some of the best advisers in the market.
By tapping the button below, you can book a free call with them in less than 30 seconds right now:
Our Group Is Proud To Have Issued 800,000+ Policies!
We've established collaboration agreements with leading insurance groups to create tailored coverage
How It Works
1. Complete a brief form
2. Our experts analyse your information and find you best quotes
3. Enjoy your protection!
Any questions?
Learn more
Who Are WeCovr?
WeCovr is an insurance specialist for people valuing their peace of mind and a great service.👍 WeCovr will help you get your private medical insurance, life insurance, critical illness insurance and others in no time thanks to our wonderful super-friendly experts ready to assist you every step of the way.
Just a quick and simple form and an easy conversation with one of our experts and your valuable insurance policy is in place for that needed peace of mind!