Private Health Insurance for Limited Companies in the UK
As an FCA-authorised expert that has helped arrange over 800,000 policies, WeCovr understands the value of private medical insurance. This guide explains everything UK limited company directors need to know about providing this exceptional benefit, from tax implications to choosing the best PMI provider for your team.
Comprehensive group PMI plans for company employees
Private Medical Insurance (PMI), often called business health insurance or group health cover when offered by an employer, is one of the most highly valued employee benefits in the UK. It gives your team access to private medical diagnosis and treatment for eligible acute conditions, helping them bypass long NHS waiting lists and get back to health, and work, sooner.
For a limited company, a group PMI plan is a powerful tool. It’s not just about healthcare; it’s a strategic investment in your most valuable asset: your people. By providing fast access to expert medical care, you demonstrate a genuine commitment to their wellbeing, which can boost morale, improve loyalty, and significantly reduce the impact of sickness absence on your business operations.
Why Should a Limited Company Offer Private Health Insurance?
Offering private health cover is a significant decision, but the advantages for both the company and its employees are compelling. In a competitive job market, it's a key differentiator that helps attract and retain top talent.
Benefits for the Employer
- Reduced Sickness Absence: This is perhaps the most direct financial benefit. According to the Office for National Statistics (ONS), an estimated 185.6 million working days were lost because of sickness or injury in 2022. PMI helps employees get diagnosed and treated faster, meaning they can return to work quicker. This minimises project delays, reduces the cost of temporary staff, and maintains productivity.
- Enhanced Recruitment and Retention: A quality health insurance package makes your company more attractive to high-calibre candidates. For existing staff, it’s a tangible benefit that fosters loyalty and makes them feel valued, reducing costly staff turnover.
- Improved Employee Morale and Productivity: Knowing they have a safety net for their health reduces stress and financial worry for employees. A healthier, happier workforce is a more focused and productive one.
- A Duty of Care: Providing health insurance demonstrates a strong commitment to your team's welfare, building a positive and supportive company culture.
- Potential Tax Efficiencies: The cost of the insurance premiums is generally considered an allowable business expense, which can be offset against your company's corporation tax bill.
Benefits for the Employee
- Faster Access to Treatment: This is the core benefit. With NHS waiting lists for consultant-led elective care at record levels, PMI allows employees to bypass these queues for eligible conditions.
- Choice and Convenience: Employees often get a choice of leading private hospitals and consultants. Appointments can be scheduled at times that suit them, minimising disruption to their work and personal lives.
- Access to Specialist Care and Drugs: PMI can provide access to specialists, treatments, and drugs that may not be available on the NHS due to funding constraints.
- Comfort and Privacy: Treatment is often in a private room with amenities like an en-suite bathroom, TV, and more flexible visiting hours, making a stressful time more comfortable.
- Peace of Mind: Knowing that they and their families (if included in the policy) are covered provides invaluable peace of mind.
Real-Life Example: Imagine a key member of your sales team, Sarah, needs a knee operation. The NHS waiting list is 14 months. For your company, that means over a year of Sarah being in pain, potentially on sick leave, and unable to travel to meet clients. With company PMI, she could be referred by her GP, see a specialist within a week, and have the operation in a private hospital within a month. She's back on her feet and back to driving business results in a fraction of the time.
Understanding How Group Private Medical Insurance Works
Navigating the world of PMI can seem complex, but the underlying principles are straightforward. The policy is designed to cover the cost of treating acute conditions that arise after you take out the cover.
The Critical Distinction: Acute vs. Chronic Conditions
This is the most important concept to understand in UK private health insurance.
- Acute Condition: An illness, disease, or injury that is likely to respond quickly to treatment and lead to a full recovery. Examples include joint replacements, cataract surgery, hernia repair, or treatment for infections. PMI is designed for these.
- Chronic Condition: An illness, disease, or injury that requires long-term management and has no known cure. Examples include diabetes, asthma, high blood pressure, and Crohn's disease. Standard UK PMI policies do not cover the routine management of chronic conditions.
Similarly, pre-existing conditions—any ailment you had before the policy started—are also typically excluded.
The Typical Patient Journey
- Visit the GP: An employee feels unwell and visits their NHS GP as usual. The PMI policy does not replace the need for a GP.
- Get a Referral: If the GP believes specialist treatment is necessary, they will provide an 'open referral' or a referral to a specific specialist.
- Contact the Insurer: The employee calls their PMI provider's claims line with the referral details.
- Authorise the Claim: The insurer checks that the condition and proposed treatment are covered under the policy and provides an authorisation number.
- Book Treatment: The employee books their consultation and subsequent treatment at a private hospital from the list approved by their insurer.
- Direct Settlement: The hospital and specialists bill the insurance company directly, meaning the employee doesn't have to handle large invoices. The employee only pays the pre-agreed 'excess', if any.
Underwriting: How Insurers Assess Risk
For group schemes, especially for larger businesses, the underwriting options are more flexible than for individual policies.
| Underwriting Type | How it Works | Best For |
|---|---|---|
| Moratorium (Mori) | The most common type for small groups. It automatically excludes treatment for any condition an employee had in the 5 years before joining. However, if they go 2 full years on the policy without any symptoms, treatment, or advice for that condition, it may become eligible for cover. | Small businesses (2-15 employees) wanting a quick and simple setup with no medical forms. |
| Full Medical Underwriting (FMU) | Employees complete a detailed health questionnaire. The insurer reviews this and explicitly lists any conditions that will be permanently excluded from cover. | Companies wanting absolute clarity from day one about what is and isn't covered. Can sometimes be cheaper if the team is in good health. |
| Medical History Disregarded (MHD) | This is the most comprehensive (and expensive) option. The insurer agrees to cover eligible acute conditions, regardless of an employee's prior medical history. Pre-existing conditions are covered. | Larger companies (typically 20+ employees) looking to provide the highest level of cover as a premium benefit. |
| Continued Personal Medical Exclusions (CPME) | For groups switching from another provider. The new insurer agrees to carry over the same exclusions from the previous policy, ensuring continuity of cover. | Businesses wanting to switch insurers without their employees losing cover for conditions they were previously covered for. |
An expert broker, like WeCovr, can advise on the most suitable and cost-effective underwriting method for your company's specific size and needs.
Key Features and Options in a Company PMI Policy
A group PMI policy is not a one-size-fits-all product. You can tailor the cover to match your budget and the level of benefit you want to provide.
Core Cover (Included as Standard)
- In-patient and Day-patient Treatment: This is the foundation of any policy. It covers costs when an employee is admitted to hospital and requires a bed, either overnight (in-patient) or for the day (day-patient). This includes surgery, hospital accommodation, specialist fees, nursing care, and diagnostic tests.
- Comprehensive Cancer Cover: Most policies offer extensive cancer cover, including diagnosis, surgery, chemotherapy, and radiotherapy. Advanced options can include access to the latest cancer drugs and therapies not yet approved on the NHS.
Optional Add-ons for Enhanced Cover
- Out-patient Cover: This is one of the most valuable additions. It covers diagnostic tests and consultations with a specialist before a hospital admission is needed. Without this, an employee would rely on the NHS for their initial diagnosis, which can involve long waits. You can often choose a limit, for example, £500, £1,000, or unlimited.
- Mental Health Cover: With mental health being a leading cause of workplace absence, this is an increasingly popular option. It provides access to psychiatrists, psychologists, and therapists to support employees with conditions like stress, anxiety, and depression.
- Therapies Cover: This adds cover for treatments like physiotherapy, osteopathy, and chiropractic care, which are crucial for musculoskeletal issues—a major cause of sick days.
- Dental and Optical Cover: This can be added to help employees with the costs of routine check-ups, dental treatment, and prescription eyewear.
Policy Levers to Manage Cost
- Excess: This is the amount an employee pays towards their claim each policy year. A higher excess (e.g., £250 or £500) will significantly lower the company's premium. It encourages employees to think about whether a claim is necessary.
- Hospital List: Insurers group hospitals into tiers based on cost. Choosing a more restricted list that excludes the most expensive central London hospitals can reduce the premium.
- Six-Week Option: This is a clever way to reduce costs. The policy will only pay for private treatment if the NHS waiting list for that treatment is longer than six weeks. If the NHS can treat the employee within six weeks, they use the NHS. This provides a safety net while keeping premiums down.
How is the Cost of Company Health Insurance Calculated?
Insurers consider several factors to determine your company's premium. Understanding these can help you structure a policy that fits your budget.
| Factor | Impact on Premium | Explanation |
|---|---|---|
| Average Age of Employees | High | Younger employees are generally lower risk and have cheaper premiums. The average age of the group is a key determinant of the base price. |
| Number of Employees | Medium | The more employees on the scheme, the lower the average price per person, as the insurer's risk is spread. Larger groups also get access to better underwriting like MHD. |
| Level of Cover | High | The more options you add (e.g., outpatient, mental health, therapies), the higher the cost. Core cover is the most affordable. |
| Excess Level | High | A higher excess means a lower premium. An excess of £250 can reduce the premium by 10-20% compared to a zero excess policy. |
| Location of Business | Medium | Premiums are typically higher in London and the South East, where private hospital costs are more expensive. |
| Industry Type | Low | Some physically demanding or higher-risk industries (e.g., construction) may attract slightly higher premiums than office-based roles. |
| Underwriting Type | High | Medical History Disregarded (MHD) is the most expensive, while Moratorium (Mori) is usually the most cost-effective starting point. |
The Tax Implications of Company Health Insurance
For a limited company, understanding the tax treatment of PMI is essential. It’s a three-part equation involving the company, the employee, and HMRC.
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For the Company: Corporation Tax Relief The premiums your company pays for employee health insurance are typically considered a legitimate business expense. This means you can deduct the full cost from your company's profits before calculating your Corporation Tax bill. This makes the net cost to the business lower than the headline premium price.
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For the Employee: A P11D Benefit in Kind Because the employee is receiving a personal benefit paid for by their employer, HMRC classes it as a 'Benefit in Kind' (BIK). The value of the premium is treated as additional income for the employee, and they must pay income tax on it at their marginal rate (20%, 40%, or 45%). The employer reports this to HMRC on a P11D form at the end of the tax year.
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For the Company: National Insurance Contributions The company must pay Class 1A National Insurance Contributions (NICs) on the total value of the benefit provided. The current rate for Class 1A NICs is 13.8% (as of the 2024/25 tax year).
Simplified Example:
- A limited company pays a £600 annual premium for an employee's health insurance.
- The company can treat this £600 as a business expense, reducing its taxable profit.
- The employee is a basic-rate (20%) taxpayer. They will pay income tax on the benefit: 20% of £600 = £120 for the year (or £10 per month).
- The company pays Class 1A NICs on the benefit: 13.8% of £600 = £82.80 for the year.
Even with the tax implications, providing health insurance is often far more cost-effective and tax-efficient than simply giving an employee a pay rise of the equivalent amount. A specialist PMI broker can provide guidance, but you should always confirm your company's tax position with your accountant.
Comparing the Best PMI Providers for UK Businesses
The UK market is home to several outstanding insurers, each with unique strengths. While the "best" provider depends entirely on your company's specific needs and budget, here is an overview of the main players.
| Provider | Key Strengths & Focus Areas |
|---|---|
| Aviva | One of the UK's largest insurers. Known for its comprehensive 'Healthier Solutions' product, strong digital tools (including the Aviva DigiCare+ app), and excellent mental health pathways. Often praised for its clear policy documents. |
| AXA Health | A global health specialist with a strong focus on clinical expertise. Their 'Business Health' plan is highly flexible. They offer excellent support pathways and a 'Fast Track Appointments' service for musculoskeletal issues. |
| Bupa | Perhaps the most recognised name in UK health insurance. Bupa offers extensive cover through its 'Bupa By You' product and has a large network of its own hospitals and clinics. Known for its strong cancer cover and direct access services. |
| Vitality | Unique in the market for its focus on rewarding healthy behaviour. Employees earn points for being active, which reduces their renewal premium and gives them access to rewards like cinema tickets and coffee. Excellent for companies wanting to build a proactive wellness culture. |
| WPA | A not-for-profit insurer known for its exceptional customer service and flexible policies. They often offer unique benefits like shared responsibility, where the member co-pays a percentage of the claim, drastically reducing premiums. |
Comparing these providers and their countless policy variations can be overwhelming. This is where using an independent PMI broker is invaluable.
The Role of a PMI Broker like WeCovr
An independent, FCA-authorised broker like WeCovr acts as your expert guide in the private medical insurance market. We work for you, not the insurance companies. Our role is to help you find the best possible cover at the most competitive price, with a service that comes at no cost to you.
Here's how we help:
- Understand Your Needs: We take the time to learn about your business, your employees, and your budget.
- Scan the Market: We use our expertise and industry relationships to compare policies from all the leading UK insurers. We analyse the small print to find the cover that truly matches your requirements.
- Provide Impartial Advice: We'll present you with a clear, easy-to-understand comparison of your best options, explaining the pros and cons of each. We demystify the jargon and help you choose the right level of cover, excess, and underwriting.
- Handle the Admin: Once you've chosen a policy, we handle all the paperwork to get your scheme set up smoothly.
- Ongoing Support: We are here to help for the life of your policy. At renewal, we will re-scan the market to ensure you are still on the best possible terms. If you need to make a claim, we can offer guidance.
With high customer satisfaction ratings and a commitment to transparent advice, WeCovr helps hundreds of UK limited companies make a smart investment in their team's health.
Promoting Employee Wellbeing Beyond Insurance
A PMI policy is a fantastic reactive tool, but the best insurers also provide proactive wellness benefits. Modern group health insurance is about keeping people healthy, not just treating them when they're sick.
Many policies now include, as standard:
- Virtual GP Services: 24/7 access to a GP via phone or video call, allowing employees to get medical advice without leaving their desk.
- Employee Assistance Programmes (EAPs): Confidential telephone support for a range of issues, from financial worries and legal questions to mental health and stress.
- Health and Wellness Apps: Access to apps for mindfulness, fitness tracking, and nutrition advice.
WeCovr enhances this by providing all our health and life insurance clients with complimentary access to CalorieHero, our AI-powered calorie and nutrition tracking app. This helps your team take control of their diet and build healthier habits.
Furthermore, we believe in holistic protection. Clients who purchase PMI or life insurance through WeCovr are often eligible for discounts on other types of business or personal insurance, helping you protect your company and your life more affordably.
FAQs: Private Health Insurance for Limited Companies
Is company health insurance a taxable benefit in the UK?
Does business health insurance cover pre-existing conditions?
Can I cover just the directors or do I have to cover all employees?
What happens to an employee's health cover if they leave the company?
Ready to Invest in Your Team's Health?
Providing private medical insurance is a clear signal that you are an employer who cares. It protects your business, attracts the best talent, and gives your team the peace of mind they deserve.
Navigating the market to find the perfect balance of cover and cost can be complex. Let WeCovr do the hard work for you. Our expert, impartial advice is free, and we're dedicated to finding a solution that's right for your limited company.
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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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!