Group Risk Market Expands PMI as a Key Employee Retention Tool
In the highly competitive UK job market, attracting and retaining top talent is more challenging than ever. As an FCA-authorised broker that has helped arrange over 900,000 policies, WeCovr sees firsthand how businesses are using company-paid private medical insurance to gain a crucial edge in the war for talent.
Employer case studies showcasing improved staff retention and benefits values
The true value of any employee benefit is measured by its impact. For Private Medical Insurance (PMI), the return on investment is seen not just in a healthier, more productive workforce but also in demonstrably better staff retention. In a climate where replacing an employee can cost thousands, holding onto your best people is a powerful economic driver.
Here are a few illustrative case studies based on common scenarios we see among UK businesses.
Case Study 1: The Fast-Growth Tech Start-Up
The Challenge: "Innovate Ltd," a 50-person software development firm in Manchester, was struggling to compete for talent against larger corporations with deeper pockets. They were experiencing a staff turnover rate of over 25% annually, particularly among skilled developers who were being lured away by superior benefits packages. Exit interviews consistently highlighted a lack of health and wellbeing support as a key reason for leaving.
The Solution: Innovate's leadership team worked with an expert PMI broker to design a comprehensive group health insurance scheme. They chose a policy with strong mental health support, a 24/7 digital GP service, and rapid access to diagnostics—benefits that resonated with their younger, tech-savvy workforce.
The Outcome:
- Reduced Turnover: Within 18 months of introducing the PMI scheme, staff turnover dropped from 25% to just under 12%. The cost of the PMI was significantly less than the estimated cost of recruiting and training replacements.
- Improved Attraction: The company prominently featured its health benefits in job adverts and during interviews. They found that candidates were more likely to accept offers, citing the health insurance as a major deciding factor.
- Positive Feedback: An anonymous internal survey showed that 92% of employees rated the new health insurance as a "high-value" or "very high-value" benefit.
Case Study 2: The Established Manufacturing Firm
The Challenge: "Bolton Fabrications," a 150-employee engineering company, had an experienced but ageing workforce. They faced rising levels of absenteeism due to musculoskeletal issues (e.g., back pain) and long waits for routine procedures on the NHS. This was impacting production schedules and putting pressure on the remaining staff.
The Solution: The firm implemented a Group PMI policy with a strong focus on physiotherapy, osteopathy, and chiropractic services. They opted for a plan that allowed employees direct access to these therapies without needing a GP referral, speeding up treatment for common physical complaints.
The Outcome:
- Reduced Absenteeism: Sickness absence rates fell by nearly 30% in the first year. Employees with back or joint pain were able to get treatment in days rather than waiting months, allowing them to return to work sooner and with less discomfort.
- Enhanced Loyalty: The company's long-serving employees felt genuinely cared for. This fostered immense goodwill and loyalty, securing critical skills and experience within the business. One senior welder, who needed a knee operation, was treated privately within six weeks. He stated he would have likely had to take early retirement if forced to wait the projected 18 months on the NHS.
- Productivity Boost: With key personnel back at work faster, production bottlenecks eased, and overall team productivity improved.
Case Study 3: The High-Pressure Professional Services SME
The Challenge: A 35-person London-based accountancy firm, "City Accountants," was dealing with the effects of a high-stress work environment. Staff were reporting symptoms of burnout, anxiety, and stress. While salaries were competitive, the leadership team recognised they had a duty of care to support their employees' mental wellbeing.
The Solution: City Accountants introduced a Group PMI plan specifically chosen for its comprehensive mental health pathway. This included access to counselling, therapy sessions (CBT), and psychiatric consultations, all available confidentially and often accessible within days.
The Outcome:
- Utilisation of Mental Health Services: In the first year, over 20% of staff used the confidential mental health support line or accessed therapy. This high uptake showed a clear and previously unmet need.
- Creation of a Supportive Culture: Introducing the benefit opened up conversations about mental health in the workplace. The firm combined the PMI with training Mental Health First Aiders, creating a culture where it was okay to not be okay.
- Improved Employee Morale: Staff feedback was overwhelmingly positive. Employees felt the company was investing in them as people, not just as workers. This translated into higher engagement and a stronger, more resilient team.
Understanding the UK Group Risk and Health Insurance Market
Traditionally, the "Group Risk" market in the UK focused on providing financial protection for employees and their families. These policies are designed to offer a safety net during life's most challenging moments.
The core Group Risk products include:
- Group Life Assurance: A lump sum payment made to an employee's family if they die while employed by the company. It's often set as a multiple of their salary (e.g., 4x salary).
- Group Income Protection (GIP): Provides a replacement income (a percentage of their salary) if an employee is unable to work for a long period due to illness or injury.
- Group Critical Illness Cover: Pays a tax-free lump sum to an employee if they are diagnosed with a specific serious illness, such as some types of cancer, heart attack, or stroke.
While these products are invaluable, they are reactive—they pay out after a tragedy has occurred.
In recent years, Private Medical Insurance (PMI) has become an essential pillar of a modern employee benefits strategy, sitting alongside traditional group risk products. The key difference is that PMI is proactive. It aims to prevent long absences and improve quality of life by providing prompt access to medical diagnosis and treatment for acute conditions.
What is an Acute Condition? An acute condition is a disease, illness, or injury that is likely to respond quickly to treatment and lead to a full recovery. Examples include joint pain needing a replacement, cataracts, or hernias. PMI is designed for these conditions.
Why Private Health Cover is a Powerful Retention Tool in 2025
The shift towards PMI as a must-have benefit is not a fleeting trend. It's a strategic response to fundamental changes in the UK's health landscape and workforce expectations.
The Reality of NHS Waiting Times
The National Health Service is a national treasure, but it is under immense pressure. According to the latest data from NHS England, the waiting list for routine consultant-led hospital treatment stands at several million. Many patients face waits of over a year for procedures like hip replacements or cataract surgery.
This has a direct impact on businesses:
- An employee waiting for a diagnosis is an employee living with uncertainty and anxiety.
- An employee in pain while waiting for surgery may be less productive (presenteeism) or off sick entirely (absenteeism).
- The long-term health of your staff can deteriorate while they wait for care.
PMI offers a solution by providing a parallel route to diagnosis and treatment, often reducing waits from many months to just a few weeks.
Evolving Employee Expectations
Today's workforce, especially Millennials and Gen Z, prioritises wellbeing and a healthy work-life balance. A 2024 survey by the Chartered Institute of Personnel and Development (CIPD) highlighted that health and wellbeing benefits are now among the top factors considered by jobseekers.
A competitive salary is no longer enough. Employees expect their employers to invest in their health. Offering private medical insurance UK sends a powerful message: "We value you, and we care about your wellbeing."
The Tangible Business Benefits of a Healthy Workforce
Investing in employee health is not just altruistic; it makes sound business sense.
| Benefit of Group PMI | Impact on the Business |
|---|---|
| Reduced Sickness Absence | Fewer lost workdays, leading to improved productivity and reduced cost of sick pay. |
| Reduced Presenteeism | Staff are not working while unwell, leading to higher quality work and fewer errors. |
| Faster Return to Work | Prompt treatment gets skilled employees back to full capacity sooner. |
| Improved Morale & Loyalty | Employees feel valued and cared for, leading to higher engagement and lower staff turnover. |
| Enhanced Employer Brand | A strong benefits package makes it easier to attract top talent in a competitive market. |
Key Features of a Group Private Medical Insurance Policy
Group PMI policies are flexible and can be tailored to suit your budget and the needs of your workforce. Here are the common components.
Core Cover
This is the foundation of every policy and typically includes the costs associated with in-patient and day-patient treatment:
- Hospital accommodation and nursing care.
- Surgeons', anaesthetists', and physicians' fees.
- Diagnostic tests and scans (like MRI and CT scans) while in hospital.
Popular Optional Extras
You can build on the core cover by adding modules to create a more comprehensive plan.
- Out-patient Cover: This is one of the most popular additions. It covers diagnostic tests and consultations with a specialist before you are admitted to hospital. Without this, an employee might still face a long NHS wait to get a diagnosis, even if the subsequent treatment would be private.
- Therapies Cover: Includes treatments like physiotherapy, osteopathy, and chiropractic care, which are vital for musculoskeletal issues.
- Mental Health Cover: Provides access to counsellors, psychologists, and psychiatrists. This is increasingly seen as an essential, not optional, benefit.
- Dental and Optical Cover: Helps employees with the costs of routine check-ups, glasses, and dental treatment.
Understanding Underwriting: A Crucial Detail
"Underwriting" is how an insurer assesses risk and decides on the terms of the policy. For group schemes, there are several options.
- Medical History Disregarded (MHD): This is the most comprehensive type of underwriting, usually available to groups of 15-20+ employees. With MHD, the insurer agrees to cover eligible medical conditions, regardless of an employee's prior medical history. This means pre-existing conditions can be covered, which is a huge benefit.
- Continued Personal Medical Exclusions (CPME): If employees are switching from another company or personal PMI plan, their existing exclusions can be carried over to the new policy.
- Moratorium Underwriting: Common for smaller schemes. With this, an insurer won't cover conditions that existed in the 5 years before the policy started. However, if the employee goes a continuous 2-year period after joining without needing treatment, advice, or medication for that condition, it may become eligible for cover.
- Full Medical Underwriting (FMU): Employees complete a full health questionnaire. The insurer then applies specific exclusions to the policy for any pre-existing conditions declared.
A Critical Reminder: For most smaller group schemes using moratorium or FMU underwriting, private medical insurance will NOT cover pre-existing conditions. It is designed to cover new, acute conditions that arise after you join the scheme. Chronic conditions (long-term illnesses like diabetes or asthma that require ongoing management) are also not typically covered by standard PMI.
Working with an expert PMI broker like WeCovr is essential to understand which underwriting option is best for your company and to ensure there are no surprises for your employees.
How to Choose the Best PMI Provider for Your Business
The UK private health cover market is competitive, with several major providers offering excellent products. The "best" provider depends entirely on your company's specific needs.
A Look at Major UK Providers
| Provider | Key Differentiator | Popular Value-Added Benefits |
|---|---|---|
| Aviva | Known for its large hospital network and a strong "Digital GP" service. | Wellbeing apps, gym discounts, stress counselling helplines. |
| AXA Health | A strong focus on proactive health and extensive, well-regarded mental health pathways. | 24/7 Doctor@Hand service, Muscle, Bone & Joint support. |
| Bupa | A globally recognised brand offering direct access to some therapies without a GP referral. | Rewards programme, family mental health lines, health assessments. |
| Vitality | Unique rewards-based model that incentivises and rewards healthy behaviour. | Discounts on Apple Watches, gym memberships, cinema tickets, and coffee. |
Finding the Right Fit for Your Team
When choosing a policy, consider:
- Your Budget: How much can you afford to invest per employee per month?
- Your Workforce Demographics: A young workforce might value mental health support and digital services, while an older workforce may prioritise comprehensive cancer cover and therapies.
- Desired Level of Cover: Do you want a basic plan to cover major in-patient costs, or a comprehensive plan with full out-patient, mental health, and therapies cover?
- Value-Added Services: Which provider's "extras" will your team actually use and value? Vitality's rewards are great for an active team, while AXA's mental health support might be better for a high-pressure office environment.
The Role of an Expert PMI Broker like WeCovr
Navigating the complexities of the group PMI market can be daunting. This is where an independent, FCA-authorised broker like WeCovr provides immense value.
Using a broker doesn't cost your business anything extra. The insurer pays the broker a commission, so you get expert advice and market comparison for free.
A specialist broker will:
- Understand Your Needs: They take the time to learn about your business, your employees, and your budget.
- Scan the Market: They compare policies and prices from a wide range of top UK insurers to find the most suitable options.
- Provide Expert Advice: They explain the jargon and help you understand the crucial differences between policies, ensuring you make an informed decision.
- Manage the Process: They handle the application and setup of the scheme, saving you administrative time and hassle.
- Offer Ongoing Support: They assist with annual renewals, helping you review the policy to ensure it still meets your needs and offers competitive value.
Furthermore, WeCovr provides added value to our clients, including complimentary access to our AI-powered calorie and nutrition tracking app, CalorieHero, and discounts on other insurance policies when you take out PMI or Life Insurance.
Integrating PMI into a Wider Employee Wellness Programme
PMI is most effective when it's part of a holistic wellness strategy. Think of it as the cornerstone of a programme that supports your employees' overall health.
Consider complementing your PMI policy with:
- Mental Health Support: Train Mental Health First Aiders within your organisation to provide a first point of contact for struggling colleagues.
- Flexible Working: Offering flexible hours or hybrid working can significantly reduce stress and improve work-life balance.
- Wellness Initiatives: Encourage healthy habits with office fruit deliveries, corporate gym memberships, or team fitness challenges.
- Financial Wellbeing Support: Money worries are a major source of stress. Offer workshops or access to resources on budgeting and financial planning.
- Nutrition and Activity: Encourage staff to use tools like the CalorieHero app to make healthier food choices and promote an active lifestyle with simple tips on incorporating more movement into the day, improving sleep, and managing stress.
Understanding the Tax Implications of Group PMI
It's important to understand how company-paid health insurance is treated for tax purposes.
- For the Employer: The cost of the premiums for a Group PMI scheme is considered a legitimate business expense and is therefore allowable for Corporation Tax relief.
- For the Employee: The provision of private medical insurance is treated as a "benefit-in-kind." This means the value of the premium is added to their income for tax purposes. The employer reports this on a P11D form at the end of the tax year, and the employee pays income tax on the value of the benefit.
While employees have to pay tax on it, the cost is still far lower than if they were to buy an equivalent individual policy themselves, and the value of the peace of mind and rapid access to care it provides is immeasurable.
What is the difference between an acute and a chronic condition?
Does Group PMI cover pre-existing medical conditions?
How much does group private medical insurance cost per employee?
Can our business offer different levels of cover to different employees?
In today's competitive landscape, a Group PMI scheme is more than just a benefit; it's a strategic investment in your most valuable asset—your people. It demonstrates a commitment to their wellbeing, boosts productivity, and provides a compelling reason for your best talent to stay and grow with you.
Ready to explore how private medical insurance can strengthen your business and support your team?
Contact the friendly, expert team at WeCovr today for a free, no-obligation market comparison and quote.
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:
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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!