TL;DR
As an FCA-authorised broker that has helped arrange over 900,000 policies, WeCovr understands the UK’s private medical insurance market inside and out. This guide offers expert advice for small business leaders on finding group PMI that delivers real value for your team and your bottom line. Best-value SME group cover and advice for company decision makers For any small or medium-sized enterprise (SME), your team is your most valuable asset.
Key takeaways
- Fast access to diagnosis: Employees can see a specialist quickly, often within days.
- Prompt treatment: Bypassing long waiting lists for procedures means staff can get treated and return to work sooner.
- 24/7 Digital GP access: Most modern policies include virtual GP services, allowing employees to get advice for minor ailments without taking a day off.
- Mental health support and counselling.
- Gym discounts and fitness tracking rewards.
As an FCA-authorised broker that has helped arrange over 900,000 policies, WeCovr understands the UK’s private medical insurance market inside and out. This guide offers expert advice for small business leaders on finding group PMI that delivers real value for your team and your bottom line.
Best-value SME group cover and advice for company decision makers
For any small or medium-sized enterprise (SME), your team is your most valuable asset. Their health and wellbeing are directly linked to your company's productivity, morale, and long-term success. In a world of long NHS waiting lists and increased health awareness, offering Group Private Medical Insurance (PMI) has shifted from a "nice-to-have" perk to a strategic business tool.
This comprehensive guide will walk you through everything you, as a company decision-maker, need to know. We’ll demystify the jargon, explain how to control costs, and show you how to build a health insurance plan that genuinely supports your employees and strengthens your business.
Why Every Small Business Should Consider Group PMI in 2025
The case for business health insurance has never been stronger. The benefits extend far beyond simply paying for private treatment; they form a cornerstone of a supportive and resilient company culture.
1. Attract and Retain Top Talent In a competitive job market, a quality benefits package can be the deciding factor for a candidate. Offering private health cover demonstrates that you are an employer who invests in your people's wellbeing, making you more attractive to skilled professionals.
2. Reduce Sickness Absence and Boost Productivity Sickness absence costs UK businesses billions each year. The latest data from the Office for National Statistics (ONS) reveals a record high in working days lost to sickness. Group PMI tackles this head-on by providing:
- Fast access to diagnosis: Employees can see a specialist quickly, often within days.
- Prompt treatment: Bypassing long waiting lists for procedures means staff can get treated and return to work sooner.
- 24/7 Digital GP access: Most modern policies include virtual GP services, allowing employees to get advice for minor ailments without taking a day off.
As of mid-2024, the NHS England waiting list for routine consultant-led treatment remains historically high, with millions of people waiting for care. For a small business, having a key team member out of action for months is not just an inconvenience—it can cripple projects and impact revenue.
3. Enhance Employee Morale and Loyalty When an employee or their family member faces a health scare, the support you provide is never forgotten. A group health scheme provides peace of mind, showing your team that you care about them as individuals, not just as employees. This fosters a powerful sense of loyalty and goodwill.
4. A Healthier Workforce is a Happier Workforce Many modern PMI plans are not just about sickness; they are about wellness. They include a wealth of resources to help your team stay healthy:
- Mental health support and counselling.
- Gym discounts and fitness tracking rewards.
- Nutritional advice and health screenings.
By promoting a proactive approach to health, you can cultivate a more energetic, engaged, and resilient workforce.
The Golden Rule of PMI: Understanding What's Covered (and What Isn't)
Before we dive deeper, it's crucial to understand the fundamental principle of private medical insurance in the UK.
PMI is designed to cover acute conditions that arise after you take out the policy.
An acute condition is a disease, illness, or injury that is likely to respond quickly to treatment and lead to a full recovery (e.g., joint replacements, cataract surgery, hernia repair, cancer treatment).
Standard PMI policies do not cover chronic or pre-existing conditions:
- Chronic Conditions: These are illnesses that are long-lasting and often have no known cure, requiring ongoing management (e.g., diabetes, asthma, high blood pressure). The NHS provides care for these.
- Pre-existing Conditions: These are any health issues an employee had before the policy started.
This is the most important distinction to grasp. PMI complements the NHS; it does not replace it. However, for group schemes, there can be some flexibility on pre-existing conditions, which we'll explore next.
Understanding Group PMI: The Nuts and Bolts
A Group PMI scheme is a single policy that a company takes out to cover a number of its employees. It’s generally simpler and more cost-effective than each employee buying their own individual policy.
Key Differences: Group vs. Individual PMI
| Feature | Individual PMI | Group PMI (for SMEs) |
|---|---|---|
| Pricing | Based on individual age, health, and lifestyle. | Based on the average age of the group. Often cheaper per person. |
| Underwriting | Requires a full health questionnaire or moratorium. | More flexible options, including the possibility of covering pre-existing conditions on larger schemes. |
| Administration | Managed by the individual. | Managed by the company, often with the help of a broker. |
| Benefits | Standard policy features. | Can include extra business-focused benefits like Employee Assistance Programmes (EAPs). |
Core Components of a Group Health Policy
When you build a plan, you are essentially choosing a bundle of benefits. Here are the main building blocks:
- In-patient and Day-patient Cover: This is the heart of any policy. It covers treatment where a hospital bed is required, including surgery, accommodation, and nursing care.
- Out-patient Cover: This covers diagnostic tests, specialist consultations, and therapies that do not require a hospital bed. This is often the most flexible part of the policy; you can choose a comprehensive level of cover or cap it to a certain monetary value (e.g., £500, £1,000) to manage costs.
- Cancer Cover: This is a cornerstone of modern PMI. Most policies offer extensive cancer cover, including access to specialists, chemotherapy, radiotherapy, and even drugs and treatments not yet available on the NHS. Always check the detail of the cancer pledge.
- Mental Health Cover: Support for mental health is now a vital component. Cover can range from a few counselling sessions via an EAP to full psychiatric in-patient treatment, depending on the level of cover you choose.
- Therapies: This includes treatment from physiotherapists, osteopaths, and chiropractors to help employees recover from injury.
A Company Director's Guide to Underwriting
"Underwriting" is how an insurer assesses risk. For SMEs, there are three main options. Choosing the right one is a key decision.
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Moratorium Underwriting (Most Common for SMEs) This is the simplest option and requires no medical forms. With moratorium underwriting, any medical condition that existed in the five years before the policy began is automatically excluded for a set period (usually the first two years of the policy). However, if an employee goes for two continuous years on the policy without needing any treatment, advice, or medication for that condition, it may then become eligible for cover. It's a "wait and see" approach.
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Full Medical Underwriting (FMU) Each employee completes a detailed health questionnaire. The insurer then reviews their medical history and explicitly states what is and isn't covered from the outset. This provides clarity but can be more time-consuming to set up. It may result in a slightly lower starting premium than a moratorium policy.
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Medical History Disregarded (MHD) Underwriting This is the most comprehensive—and most expensive—form of underwriting. As the name suggests, the insurer agrees to disregard most pre-existing conditions and will cover eligible acute conditions regardless of an employee's prior medical history. MHD is typically only available for groups of 20+ employees, but some insurers may offer it to smaller groups. It is the gold standard for corporate cover.
An expert PMI broker, like WeCovr, can explain these options in detail and advise which is most suitable for your company's size and needs.
Finding Best-Value SME Cover: It's More Than Just the Price Tag
The "best" policy isn't always the cheapest. The goal is to find the "best-value" policy—one that provides meaningful cover your employees can actually use, at a price your business can sustain. You have several levers to pull to control the premium.
5 Levers to Customise Your Policy and Control Costs
| Cost-Saving Lever | How It Works | Impact on Premium |
|---|---|---|
| 1. Policy Excess | The amount an employee pays towards their claim each year (e.g., £100, £250, £500). | A higher excess significantly lowers the premium. |
| 2. The '6-Week Wait' Option | If the NHS can provide the required in-patient treatment within 6 weeks, the employee uses the NHS. If the wait is longer, the PMI policy kicks in. | A very popular option that can reduce the premium by 20-30%. |
| 3. Hospital List | Insurers have tiered lists of hospitals. You can choose a local list, a national list, or a premium list including central London hospitals. | Restricting the hospital list to non-London options lowers the premium. |
| 4. Out-patient Cover Limit | Capping the amount of money available for out-patient diagnostics and consultations (e.g., to £1,000 per year). | Limiting out-patient cover is one of the most effective ways to lower the premium. |
| 5. Ring-fencing Cover | You can offer different levels of cover to different groups of employees (e.g., a comprehensive plan for directors and a more essential plan for other staff). | Allows you to manage your overall budget effectively. |
By working with a broker, you can mix and match these options to design a bespoke plan that aligns perfectly with your budget and objectives.
Comparing the UK's Top PMI Providers for Small Business
The UK market is dominated by a few major providers, each with its own strengths.
- Aviva: A major UK insurer known for its comprehensive cancer cover and strong digital tools. Often praised for its clear policy wording and direct settlement with hospitals.
- AXA Health: With a vast network of hospitals and specialists, AXA is a popular choice. They offer flexible plans and a strong focus on clinical support and case management.
- Bupa: One of the most recognised names in UK health insurance. Bupa has a large network, including its own clinics and hospitals, and offers a wide range of plans with a focus on preventative health.
- Vitality: Famous for its innovative "Shared Value" model. Vitality actively rewards employees for healthy living (tracking steps, gym visits, etc.) with cinema tickets, coffee, and even lower premiums at renewal. This can be fantastic for employee engagement.
While it's tempting to go direct, each provider offers dozens of permutations. An independent broker's job is to navigate this complexity for you, comparing the whole market to find the ideal fit.
Beyond Core Medical Cover: Added-Value Benefits That Drive Engagement
Modern group health insurance is evolving into a holistic wellbeing package. These added benefits are often included as standard and can provide day-to-day value for your entire team.
24/7 Digital GP Access
This is arguably one of the most-used benefits. Employees can book a video or phone appointment with a GP at their convenience—often within hours. This saves time, reduces the need for time off work, and allows for quick prescriptions and referrals.
Mental Health Support & EAPs
Most group schemes now include an Employee Assistance Programme (EAP). This provides a confidential 24/7 helpline for employees to discuss any issue, including:
- Stress, anxiety, or depression.
- Financial worries.
- Legal queries.
- Relationship and family problems.
It's an invaluable, confidential support system that helps employees manage life's challenges before they escalate.
Wellness Programmes and Rewards
Providers like Vitality have pioneered the concept of rewarding healthy behaviour. By linking their policy to a smartphone app, employees can earn points for walking, working out, or completing health checks. These points translate into real-world rewards, creating a fun and engaging way to promote a healthier lifestyle across your company.
Exclusive Perks with WeCovr
At WeCovr, we go a step further to support the health of your team. When you arrange your group PMI with us, your company also receives:
- Complimentary access to CalorieHero: Our advanced AI-powered calorie and nutrition tracking app to help your team manage their dietary goals.
- Discounts on other insurance: Employees who are part of a group scheme arranged by us can also get discounts on other policies, such as life insurance or travel insurance.
These extras demonstrate a comprehensive commitment to employee wellbeing, making your benefits package stand out.
How to Set Up a Group PMI Scheme: A 5-Step Guide
Implementing a group health scheme is more straightforward than you might think, especially with an expert guiding you.
Step 1: Define Your Objectives and Budget First, decide what you want to achieve.
- Who to cover? All employees, or just a certain level of management? Covering everyone is best for morale and fairness.
- What's your budget? Have a rough idea of what you can afford per employee, per month. A broker can help you work backwards from a total budget.
- What are your priorities? Is fast access to diagnostics the main goal, or is comprehensive mental health support more important?
Step 2: Gather Anonymous Employee Data To get accurate quotes, a broker will need some simple, anonymous data about the group you want to cover:
- A list of dates of birth for each employee.
- The postcodes of your employees (to determine hospital list pricing).
- No names or personal health details are needed at this stage.
Step 3: Speak to an Expert PMI Broker This is the most crucial step. A specialist broker like WeCovr adds value in several ways, at no cost to you:
- Market Knowledge: We know the strengths and weaknesses of each insurer and their SME products.
- Impartial Advice: We are not tied to any single insurer. Our advice is based entirely on your company's needs. We have a track record of high customer satisfaction ratings, reflecting our client-first approach.
- Time-Saving: We handle all the paperwork and negotiations, presenting you with a clear, easy-to-understand comparison of your best options.
Step 4: Review Your Quotes and Select a Policy Your broker will present you with 2-3 tailored quotes. They will walk you through the differences in cover, the cost implications of each feature, and provide a final recommendation. You make the final decision.
Step 5: Implement and Communicate to Your Team Once you've chosen a plan, the final step is to roll it out. Communicating the new benefit is key to its success. Your broker can often provide materials and even help with presentations to explain to your staff how the scheme works, what's covered, and how to make a claim.
Common Pitfalls for SMEs and How to Avoid Them
Navigating the PMI market can be tricky. Here are some common mistakes to watch out for.
- Forgetting about Benefit-in-Kind (P11D) Tax: When a company pays for an employee's medical insurance, it is considered a 'benefit-in-kind' and is subject to tax. The company will need to declare this on a P11D form for each employee covered, and the employee will pay income tax on the value of the premium. This is a small cost but must be budgeted for.
- Choosing the Cheapest Policy Without Reading the Fine Print: A rock-bottom price often means significant restrictions, such as a very limited hospital list or no out-patient cover. This can lead to frustration when an employee tries to use the policy.
- Not Understanding the Underwriting: Choosing the wrong underwriting type can lead to disappointment. Be clear on whether pre-existing conditions will or will not be covered.
- Failing to Review at Renewal: Premiums, especially for small groups, will increase each year due to age and medical inflation. Simply auto-renewing is rarely the best option. An annual review with your broker is essential to ensure the policy remains competitive and appropriate for your needs.
By being aware of these potential issues and working with a trusted adviser, you can ensure your investment in group health insurance delivers lasting value.
How many employees do I need for a group PMI scheme?
Is group private medical insurance a taxable benefit in the UK?
Does company PMI cover pre-existing medical conditions?
Ready to explore the best-value private medical insurance for your small business?
Contact the friendly, expert team at WeCovr today. We'll compare the market for you, provide impartial advice, and help you build a plan that truly works for your team and your budget—all at no cost to you.
Sources
- Office for National Statistics (ONS): Mortality, earnings, and household statistics.
- Financial Conduct Authority (FCA): Insurance and consumer protection guidance.
- Association of British Insurers (ABI): Life insurance and protection market publications.
- HMRC: Tax treatment guidance for relevant protection and benefits products.
