TL;DR
As an FCA-authorised expert with over 900,000 policies of various kinds issued, WeCovr understands the UK private medical insurance market inside and out. For Small and Medium-sized Enterprises (SMEs), a group PMI scheme isn't just a perk; it's a powerful strategic tool for growth, stability, and success.
Key takeaways
- Specialist drugs and treatments not yet approved by NICE (the National Institute for Health and Care Excellence).
- Experimental treatments and clinical trials.
- Chemotherapy, radiotherapy, and biological therapies.
- Define Your Objectives and Budget: Start by asking why you want the scheme. Is the main goal retention? Reducing absence? Or simply providing the best possible care? Establish a realistic annual or monthly budget per employee.
- Gather Anonymous Employee Data: To get an accurate quote, a broker will need a list of anonymous data for your team. This typically includes each employee's date of birth and postcode. No names or personal medical details are needed at this stage.
As an FCA-authorised expert with over 900,000 policies of various kinds issued, WeCovr understands the UK private medical insurance market inside and out. For Small and Medium-sized Enterprises (SMEs), a group PMI scheme isn't just a perk; it's a powerful strategic tool for growth, stability, and success.
Using group cover for retention and cost control
In today's competitive business landscape, attracting and retaining top talent is more challenging than ever. At the same time, managing costs and maximising productivity are essential for survival and growth. For a forward-thinking SME, a group Private Medical Insurance (PMI) scheme directly addresses these challenges, offering a compelling return on investment that goes far beyond simply paying for medical bills.
Think of it as a dual-purpose strategy. On one hand, it's a highly visible and valued employee benefit that can make your company stand out. It sends a clear message: "we care about your health and wellbeing." This fosters loyalty and makes it harder for your best people to be tempted by rival offers.
On the other hand, it's a practical tool for managing the operational costs of ill health. Long NHS waiting lists can mean key employees are out of action for months. Group PMI provides a fast-track route to diagnosis and treatment, reducing sickness absence and keeping your business running smoothly. It's not an expense; it's an investment in your most valuable asset—your people.
What Exactly is a PMI Group Scheme?
In simple terms, a group PMI scheme is a single private health insurance policy that covers a group of people, typically the employees of a company. Instead of each person buying their own individual policy, the business buys one policy that extends cover to its team.
The minimum number of employees required to start a group scheme is surprisingly low, often just two or three people, making it accessible even for very small businesses.
Individual vs. Group PMI: The Key Difference
| Feature | Individual PMI | Group PMI (for SMEs) |
|---|---|---|
| Policyholder | The individual person. | The business or organisation. |
| Premiums | Paid by the individual. Based on their age, health, and lifestyle. | Paid by the business. Based on the group's average age and policy choices. |
| Underwriting | Usually Moratorium or Full Medical Underwriting. | Can be Moratorium, FMU, or Medical History Disregarded for larger groups. |
| Cost | Generally more expensive per person. | More cost-effective due to economies of scale. |
The core principle is one of shared risk. By insuring a group, the provider can spread the potential cost of claims across multiple people. This bulk-buying power almost always results in a lower premium per person compared to what they would pay for an equivalent individual policy.
The SME Advantage: Why Group PMI is a Game-Changer
For an SME, the impact of a single key employee being off work for an extended period can be devastating. Unlike a large corporation, there often isn't someone else to easily pick up the slack. This is where group PMI moves from a "nice-to-have" to a strategic necessity.
1. Supercharge Your Talent Attraction & Retention
In a candidate-driven job market, salary alone is often not enough. A comprehensive benefits package is a key differentiator. Private medical insurance consistently ranks as one of the most sought-after employee benefits in the UK.
- Stand Out: Offering PMI shows you are a premium employer willing to invest in your team's welfare.
- Boost Loyalty: Employees with good benefits feel valued and are less likely to look for opportunities elsewhere. A 2024 survey by the UK public and industry sources of Personnel and Development (CIPD) highlights that health and wellbeing benefits are critical for employee engagement and retention.
- Attract the Best: When a top candidate is weighing up two similar job offers, a private health cover package can be the deciding factor.
2. Slash Absenteeism & Boost Productivity
Employee sickness is a major drain on UK productivity. According to the Office for National Statistics (ONS), an estimated 185.6 million working days were lost because of sickness or injury in 2022, the highest it has been in a decade.
The challenge is often not the illness itself, but the waiting time for diagnosis and treatment on the NHS.
A Real-World Example:
Imagine your lead software developer, Sarah, develops a persistent and painful knee problem.
- With NHS only: She waits weeks for a GP appointment, is referred to a specialist (a wait of several months), and then joins a surgical waiting list that could be over a year long. During this time, she may be on sick leave or working in pain, impacting her focus and productivity.
- With Group PMI: Sarah uses the Digital GP service for a same-day appointment. She's referred to a private specialist and has an MRI scan within a week. Surgery is scheduled for a few weeks later. She is back at work, fully recovered, in a fraction of the time.
By bypassing long waiting lists, PMI gets your employees the treatment they need, when they need it, minimising disruption to your business.
3. Demonstrate an Unwavering Duty of Care
Providing group PMI is a tangible demonstration of your company's commitment to its employees' health. It builds a positive, supportive company culture where people feel looked after. This improves morale, strengthens team cohesion, and reinforces the idea that you are an employer who genuinely cares.
Unlocking Cost-Control: How Group Schemes Can Be Surprisingly Affordable
Many SME owners assume private health cover is prohibitively expensive. However, group schemes are designed to be flexible and scalable, with several mechanisms that help control costs.
The Power of Economies of Scale
As mentioned, insuring a group is cheaper per person than insuring individuals. Insurers see a group of working-age adults as a relatively low-risk pool, and the administrative costs of managing one group policy are lower than managing many individual ones. This saving is passed on to you in the form of lower premiums.
The Magic of Medical History Disregarded (MHD) Underwriting
This is one of the most significant advantages of group PMI, typically available for schemes with 15-20 or more members.
With Medical History Disregarded (MHD) underwriting, the insurer agrees to ignore the previous medical history of all members joining the scheme. This means that pre-existing conditions that would normally be excluded on an individual policy can be covered. There are no medical questionnaires to fill out, making the setup process incredibly simple.
Crucial Note on Pre-existing and Chronic Conditions: It is vital to understand that standard private medical insurance in the UK is designed to cover acute conditions—illnesses or injuries that are short-term and likely to respond to treatment. It does not cover chronic conditions, which are long-term and require ongoing management (e.g., diabetes, asthma, hypertension).
While an MHD group scheme will cover treatment for an acute flare-up of a chronic condition, it will not cover the day-to-day management, check-ups, or routine medication for that condition. The principle of PMI is to get you back to the state of health you were in before the acute episode.
Designing a Policy to Fit Your Budget
You are in control of the policy's design and, therefore, its cost. A good PMI broker, like WeCovr, can help you balance the level of cover with your budget. Key levers to control cost include:
| Policy Feature | Lower Cost Option | Higher Cost Option | Impact on Employees |
|---|---|---|---|
| Out-patient Cover | Limit of £500-£1,000 per year. | Full cover (unlimited). | Covers initial diagnostics but may not cover a full course of therapy. |
| Hospital List | A regional or curated list of private hospitals. | A national list including central London hospitals. | Employees may need to travel further for treatment. |
| Policy Excess | A higher excess (e.g., £250 or £500). | A low excess (e.g., £0 or £100). | Employees contribute more towards the cost of their claim. |
| 6-Week Option | The policy only pays if the NHS wait for treatment is longer than 6 weeks. | Immediate access to private care. | A huge cost-saver, but reduces the "fast-track" benefit for some treatments. |
By carefully selecting these options, you can create a meaningful benefits package that fits comfortably within your SME's budget.
Key Features to Look for in a Group PMI Policy
When comparing policies, it's essential to look beyond the headline price and understand what's included.
Core Cover (In-patient and Day-patient)
This is the foundation of every PMI policy. It covers the costs associated with a hospital stay, including surgeon and anaesthetist fees, nursing care, and accommodation.
Out-patient Options
This is one of the most valuable parts of a policy. It covers diagnostic tests and consultations that don't require a hospital admission.
- Specialist Consultations: Seeing a consultant cardiologist, orthopaedic surgeon, etc.
- Diagnostic Tests: MRI, CT, and PET scans, X-rays, and blood tests.
- Therapies: Physiotherapy, osteopathy, and chiropractic treatment. You can choose a set limit (e.g., £1,000 per year) or unlimited cover. (illustrative estimate)
Cancer Cover
This is a critical component. PMI cancer cover is often more comprehensive than what's available on the NHS, providing access to:
- Specialist drugs and treatments not yet approved by NICE (the National Institute for Health and Care Excellence).
- Experimental treatments and clinical trials.
- Chemotherapy, radiotherapy, and biological therapies.
Mental Health Support
With growing awareness of mental health in the workplace, this is an increasingly vital feature. Cover can range from a limited number of therapy sessions to comprehensive support for in-patient psychiatric treatment. Many policies now include access to Employee Assistance Programmes (EAPs) as standard.
Digital GP & Value-Added Services
Modern PMI is about more than just treatment; it's about proactive wellbeing. Look for providers that offer:
- 24/7 Digital GP: Video or phone consultations with a GP, often bookable within hours.
- Wellness Programmes: Rewards and discounts for healthy living, such as tracking steps or going to the gym.
- Health Information Helplines: Access to nurses and counsellors for advice.
As a WeCovr client, your employees also gain complimentary access to CalorieHero, our AI-powered calorie and nutrition tracking app, further supporting their journey to better health.
Navigating the Underwriting Maze: A Clear Guide
The type of underwriting determines how the policy treats pre-existing conditions. Understanding the options is key to choosing the right scheme.
| Underwriting Type | How It Works | Best For... |
|---|---|---|
| Medical History Disregarded (MHD) | The insurer ignores all past medical history for all members. No medical questions are asked. Pre-existing conditions are covered (subject to policy terms). | Groups of 15-20+ employees. It offers the most comprehensive and hassle-free cover. |
| Moratorium (Mori) | No medical declaration is needed upfront. The policy automatically excludes any condition a member has had symptoms of, or received treatment for, in the 5 years before joining. That exclusion can be lifted if the member then goes 2 continuous years on the policy without needing treatment, medication, or advice for that condition. | Individuals and small groups (2-15 employees). It's simple to set up. |
| Full Medical Underwriting (FMU) | Each employee completes a detailed health questionnaire. The insurer reviews their medical history and applies specific exclusions to their cover from day one. | Individuals and small groups who want absolute clarity on what is and isn't covered from the start. |
Choosing the right underwriting is a crucial decision. A specialist broker can advise on the best approach for your company's size and employee needs.
How to Set Up a Group PMI Scheme for Your SME
Setting up a scheme is more straightforward than you might think, especially with expert guidance.
- Define Your Objectives and Budget: Start by asking why you want the scheme. Is the main goal retention? Reducing absence? Or simply providing the best possible care? Establish a realistic annual or monthly budget per employee.
- Gather Anonymous Employee Data: To get an accurate quote, a broker will need a list of anonymous data for your team. This typically includes each employee's date of birth and postcode. No names or personal medical details are needed at this stage.
- Engage an Independent PMI Broker: This is the most important step. Don't go direct to an insurer. An independent broker like WeCovr works for you, not the insurance company.
- Market Access: We compare policies from all the leading UK private medical insurance providers (like Aviva, Bupa, AXA Health, Vitality).
- Expert Advice: We help you design a policy that meets your goals and budget.
- No Fee: Our service is free to you. We are paid a commission by the insurer you choose, which is already built into the premium.
- Ongoing Support: We assist with the setup, help you communicate the benefits to your staff, and manage the policy renewal each year to ensure you're always getting the best value.
- Compare Quotes and Select a Provider: Your broker will present you with a clear, easy-to-understand comparison of the options. They will explain the nuances of each policy and make a recommendation based on your specific requirements.
- Implement and Communicate: Once you've chosen a policy, the final step is to launch it to your employees. Your broker can help provide materials and support to explain how the scheme works and how they can make a claim.
Beyond PMI: Building a Holistic Wellbeing Strategy
Group PMI is a powerful cornerstone, but it's most effective as part of a wider company culture that promotes health and wellbeing.
- Encourage Activity: Simple initiatives like promoting a cycle-to-work scheme, organising lunchtime walking groups, or offering discounted gym memberships can have a big impact. Regular physical activity is proven to boost mood and reduce the risk of many health problems.
- Promote Healthy Eating: Provide healthy snack options in the office or canteen. Educate your team on the benefits of a balanced diet. WeCovr's complimentary CalorieHero app is a perfect tool to support this.
- Focus on Mental Health: Foster an open culture where staff feel comfortable talking about mental health. Signpost resources like EAPs and mental health first-aiders. Encourage regular breaks and a healthy work-life balance to prevent burnout.
- Financial Wellbeing: Financial stress is a major cause of anxiety. Consider offering benefits that support financial health. As a WeCovr client, you can also access discounted rates on other types of insurance, such as life insurance or income protection, to build a truly comprehensive benefits package for your team.
The Tax Implications of Group PMI
It's important to understand the tax treatment of group PMI in the UK.
- For the Employer: The premiums you pay for the group scheme are generally considered an allowable business expense, meaning you can deduct them from your pre-tax profits.
- For the Employee: The PMI premium is treated as a 'benefit in kind'. This means the employee has to pay income tax on the value of the benefit. The employer reports this to HMRC using a P11D form, and the tax is usually collected by adjusting the employee's tax code.
Example: If the annual premium for an employee is £700, a basic-rate taxpayer (20%) would pay £140 in tax per year (£11.67 per month). A higher-rate taxpayer (40%) would pay £280 per year (£23.33 per month). For this small cost, the employee gets access to a health package worth many times more. (illustrative estimate)
Is group private medical insurance a taxable benefit in the UK?
Can we cover pre-existing conditions with a group scheme?
What is the minimum number of employees for a group PMI scheme?
Does private medical insurance UK cover chronic conditions like diabetes or asthma?
Take the Next Step
A group PMI scheme is a powerful, affordable, and strategic investment in your business's future. It protects your most valuable asset—your people—while driving retention, reducing absenteeism, and giving you a crucial edge in a competitive market.
Ready to explore how a tailored group scheme could transform your SME?
Contact the friendly, expert team at WeCovr today. We'll provide a free, no-obligation market comparison and help you build the perfect plan for your business and your budget.
Sources
- NHS England: Waiting times and referral-to-treatment statistics.
- Office for National Statistics (ONS): Health, mortality, and workforce data.
- NICE: Clinical guidance and technology appraisals.
- Care Quality Commission (CQC): Provider quality and inspection reports.
- UK Health Security Agency (UKHSA): Public health surveillance reports.
- Association of British Insurers (ABI): Health and protection market publications.
