Negotiating Better PMI for Small Firms
As an FCA-authorised broker that has helped arrange over 900,000 policies, WeCovr provides expert guidance on private medical insurance for UK businesses. This article explores how small firms can secure the best value group cover, ensuring a healthier team and a stronger business.
Employer advice for group cover value
For a small or medium-sized enterprise (SME), every penny counts. Yet, investing in your team's health is one of the most powerful decisions you can make. Group Private Medical Insurance (PMI) isn't just a 'big company' perk anymore; it's an accessible, strategic tool for SMEs to attract talent, reduce absenteeism, and build a resilient workforce.
But how do you ensure you're getting maximum value without breaking the bank? The key lies in understanding what drives the cost of a policy and knowing which levers to pull during negotiation. This guide will walk you through everything you need to know.
What Exactly is Group Private Medical Insurance?
Group PMI is a single insurance policy taken out by an employer to provide private healthcare access for its employees. Instead of each employee seeking individual cover, the company buys it for them as a group, which is often cheaper and offers more inclusive terms than personal policies.
The core purpose of PMI is to bypass long NHS waiting lists for eligible treatments. It gives your team prompt access to specialists, diagnostic tests, and private hospital care for acute conditions.
Crucial Point: Standard private medical insurance in the UK is for acute conditions – illnesses or injuries that are likely to respond quickly to treatment and lead to a full recovery. It does not cover chronic conditions (like diabetes or asthma) or any medical issues you had before the policy started (pre-existing conditions).
The Undeniable Business Case for SME Health Cover
Offering PMI is more than just a nice-to-have benefit; it's a sound business investment. In a competitive job market, it can be the deciding factor for a top candidate choosing your company over a rival.
1. Attract and Retain Top Talent: In a post-pandemic world, health and wellbeing are top priorities for employees. A strong benefits package featuring private health cover shows you care about your team's welfare, making you a more attractive employer.
2. Reduce Sickness Absence: Long waits for diagnosis and treatment can keep valuable employees out of work for extended periods.
- 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, the highest level since records began in 2010.
- With NHS waiting lists for consultant-led elective care standing at over 7.5 million in England alone, prompt private treatment can mean the difference between an employee being off for weeks versus months.
3. Boost Productivity and Morale: When staff feel valued and know they have a safety net for their health, morale improves. A healthy, happy team is a productive team. Quick access to mental health support, often included in PMI policies, is also vital for managing stress and preventing burnout.
| Benefit of PMI for SMEs | Impact on the Business |
|---|---|
| Faster Medical Treatment | Reduces employee downtime and lost productivity. |
| Enhanced Recruitment | Makes your benefits package more competitive. |
| Improved Staff Retention | Increases loyalty and reduces costly staff turnover. |
| Better Employee Morale | Shows you value your team's wellbeing. |
| Access to Mental Health Support | Helps manage workplace stress and prevent burnout. |
Key Levers: How to Negotiate a Better PMI Deal
The price of a group PMI policy isn't fixed. It's calculated based on several factors, many of which you can adjust to fit your budget. Working with an expert PMI broker like WeCovr can help you navigate these options to build the perfect plan.
Here are the main levers you can pull to control costs:
1. Choose the Right Underwriting Method
Underwriting is how an insurer assesses the risk of insuring your team. The method you choose has a huge impact on the price and what is covered.
- Moratorium Underwriting (Most Common for SMEs): This is the simplest option. Employees don't need to complete a full medical questionnaire. Instead, the insurer applies a 'moratorium' period (usually 24 months). Any pre-existing condition an employee has had symptoms, treatment, or advice for in the 5 years before joining is excluded. However, if the employee then goes 2 full, continuous years on the policy without any symptoms, treatment, or advice for that condition, it may become eligible for cover.
- Full Medical Underwriting (FMU): Each employee completes a detailed health questionnaire. The insurer then reviews their medical history and decides what to exclude on an individual basis. This can sometimes result in a lower initial premium than a moratorium policy if your team is generally very healthy, but it involves more admin.
- Medical History Disregarded (MHD): This is the most comprehensive and expensive option, usually only available to larger groups (often 20+ employees). As the name suggests, the insurer disregards everyone's prior medical history and covers eligible acute conditions, even if they are pre-existing. It's a fantastic benefit but comes at a premium price.
For most small firms, moratorium underwriting offers the best balance of simplicity and cost-effectiveness.
2. Adjust the Policy Excess
The excess is the amount an employee must pay towards their treatment costs each year before the insurance kicks in.
- A £0 excess means the insurer pays for everything from the start, but this results in the highest premium.
- Introducing an excess of £100, £250, or even £500 per employee per year can significantly reduce your company's monthly premium.
This is a shared responsibility model. The company pays for the insurance, and the employee contributes a small, manageable amount if they need to make a claim. It's one of the most effective ways to lower the overall cost.
3. Be Smart with Your Hospital List
Insurers group UK private hospitals into tiers or bands.
- Premium lists include the top-tier private hospitals, particularly those in Central London, which are the most expensive to receive treatment in.
- Standard lists provide a comprehensive nationwide network of excellent private hospitals but may exclude some of the priciest city-centre facilities.
- Local or reduced lists offer a more limited selection of hospitals for a lower premium.
Unless your business is based in Central London and you feel access to those specific hospitals is essential, choosing a standard nationwide list is a sensible way to save money without compromising on quality of care.
4. Tailor Your Outpatient Cover
Outpatient treatment refers to consultations, tests, and scans that don't require an overnight hospital stay. This is often where a large portion of claim costs originate. You can control this by:
- Setting a financial limit: Capping outpatient cover at, say, £500, £1,000, or £1,500 per person per year. Full cover is available but is more expensive.
- Limiting consultations: Some policies allow you to limit the number of specialist consultations covered each year.
- Removing it entirely: This is a drastic cost-saving measure, but it means employees would rely on the NHS for all diagnostic stages and only use PMI for the treatment itself (e.g., surgery).
A common, balanced approach for SMEs is to select a mid-range outpatient limit like £1,000. This covers the most likely diagnostic needs without the cost of unlimited cover.
5. Consider the 'Six-Week Option'
This is a hugely popular cost-containment feature. The six-week option means that if the NHS can provide the required inpatient treatment within six weeks of it being recommended, the employee will use the NHS. If the NHS wait is longer than six weeks, the private medical insurance kicks in.
Given that the primary benefit of PMI is avoiding long waits, this option aligns perfectly with the core purpose of the cover. It can reduce premiums by 20-30% as it removes the cost of claims for treatments that the NHS can deliver promptly.
The Power of a Specialist Broker
Trying to navigate the PMI market alone as a small business owner is time-consuming and confusing. The terminology is complex, and comparing quotes from different insurers is not always a like-for-like process.
This is where an independent, FCA-authorised broker like WeCovr becomes your most valuable asset.
- Market Expertise: We understand the nuances of every major UK insurer's policy. We know which providers are most competitive for small groups and which have the most flexible options.
- Negotiating Power: Brokers handle a large volume of business, giving us leverage to negotiate better terms and prices on your behalf than you could achieve by going direct.
- Time-Saving: We do the legwork for you. We'll gather the necessary information, approach the market, and present you with a clear, easy-to-understand comparison of your best options.
- No Extra Cost: Our service is paid for by the insurer you choose, so you get expert, impartial advice at no direct cost to your business.
A good broker acts as your outsourced insurance expert, ensuring your policy remains competitive and fit for purpose year after year.
Preparing for Your Group PMI Quote
To get the most accurate quotes, you'll need to gather some basic information about your team. A broker will guide you through this, but having it ready will speed up the process.
Information Needed for a Group PMI Quote:
- Company Details: Your registered company name, address, and business type.
- Employee Data: A list of all employees to be covered, including their dates of birth and postcodes. Age and location are primary factors in pricing.
- Dependants: Decide if you want to offer employees the option to add their partners or children to the policy (this is usually paid for by the employee, but on the preferential group terms).
- Desired Cover Level: Have a think about the levers mentioned above. What level of excess feels right? Is a standard hospital list sufficient? This will form the basis of the initial quotes.
Beyond Insurance: Building a Culture of Wellness
A PMI policy is a fantastic safety net, but the ultimate goal is to have a healthy, thriving workforce that rarely needs to use it. Proactively promoting wellness can reduce claims, which helps keep your renewal premiums stable.
Simple, High-Impact Wellness Initiatives:
- Encourage Movement: Promote walking meetings, offer discounts on gym memberships, or organise team fitness challenges.
- Healthy Eating: Provide healthy snacks in the office, like fruit and nuts. Educate your team on the importance of a balanced diet for energy and focus. As a WeCovr client, your team can get complimentary access to CalorieHero, our AI-powered calorie and nutrition tracking app, making healthy eating easier than ever.
- Prioritise Mental Health: Foster an open culture where staff feel comfortable discussing mental health. Ensure they know how to access support services, many of which are included in modern PMI policies (like telephone counselling lines or digital therapy apps).
- Champion Good Sleep: Share resources on sleep hygiene. A well-rested team is more resilient, focused, and less prone to illness.
- Multi-Policy Benefits: When you arrange your PMI or Life Insurance with us, WeCovr can also offer discounts on other types of business and personal cover, adding even more value.
By embedding wellness into your company culture, you create a positive feedback loop: healthier employees lead to fewer claims, which leads to more stable insurance costs.
A Look at Leading UK PMI Providers for SMEs
While a broker will find the best fit for your specific needs, it's helpful to know the key players in the UK market. Each has its own strengths and focus.
| Provider | Key Features & Focus for SMEs |
|---|---|
| AXA Health | Strong core cover, excellent digital tools (like their Doctor at Hand app), and a clear, modular approach to building a policy. |
| Aviva | Known for comprehensive cover and their "Expert Select" hospital list, which offers a guided journey through treatment. Strong mental health pathways. |
| Bupa | One of the most recognised names in UK health. Offers a vast network and a range of options from budget-friendly to fully comprehensive. |
| Vitality | Unique focus on rewarding healthy behaviour. Employees can earn discounts and rewards (like cinema tickets and coffee) for being active, which can drive engagement. |
This table is for illustrative purposes. An expert broker like WeCovr will conduct a full market review to find the optimal provider and policy for your business's unique circumstances and budget.
The Annual Review: Your Key to Long-Term Value
Private medical insurance is not a "set and forget" product. The healthcare landscape, your team, and your business needs will change over time.
A critical part of managing your PMI scheme effectively is conducting a full review with your broker every year before renewal.
During the review, your broker will:
- Assess your claims experience from the past year.
- Discuss any changes in your business or employee numbers.
- Re-evaluate your chosen cover level to ensure it still meets your needs and budget.
- Re-broke the market to ensure your incumbent insurer is still offering a competitive price. If a better deal is available elsewhere, they will manage the switching process for you.
Without this annual check-up, you risk your premiums creeping up year on year, or your cover becoming misaligned with your business's needs.
What is the minimum number of employees for a group PMI scheme?
Does PMI cover pre-existing or chronic conditions?
What happens to an employee's health cover if they leave the company?
Is group PMI considered a 'benefit in kind' for tax purposes?
Ready to Find the Best Value Cover for Your Team?
Navigating the private health insurance market doesn't have to be complex. As specialist brokers, our goal is to provide clarity and find you a policy that protects your team and your bottom line.
Get in touch with WeCovr today for a free, no-obligation quote and discover how affordable a high-value group PMI scheme can be.
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!