TL;DR
Deciding on private medical insurance in the UK can feel complex, especially when weighing up a workplace scheme against a personal policy. As an FCA-authorised broker that has helped arrange over 900,000 policies of various kinds, WeCovr understands the nuances. This guide will help you compare your options.
Key takeaways
- The mechanics of both workplace and personal private medical insurance (PMI).
- A direct comparison of costs, coverage, and flexibility.
- The crucial steps to take when you leave a job with company health cover.
- Whether a 'top-up' policy could be the right solution for you.
- Inclusive by Design: The policy covers a group of people under a single contract, which spreads the risk for the insurer.
Deciding on private medical insurance in the UK can feel complex, especially when weighing up a workplace scheme against a personal policy. As an FCA-authorised broker that has helped arrange over 900,000 policies of various kinds, WeCovr understands the nuances. This guide will help you compare your options.
Comparing employer-provided group schemes with individual policies, continuation options when changing jobs, and whether personal top-up coverage makes sense
Navigating the world of private health cover involves understanding two main pathways: the one provided by your employer and the one you arrange yourself. Each has distinct advantages, costs, and implications for your long-term health security. This article breaks down everything you need to know to make an informed decision that offers the best value for you and your family.
We will explore:
- The mechanics of both workplace and personal private medical insurance (PMI).
- A direct comparison of costs, coverage, and flexibility.
- The crucial steps to take when you leave a job with company health cover.
- Whether a 'top-up' policy could be the right solution for you.
Understanding Workplace Health Insurance
Workplace or 'group' health insurance is a private medical insurance policy purchased by an employer to cover its employees. It’s one of the most highly-valued employee benefits in the UK, offering a route to faster medical treatment outside the NHS.
Typically, the company chooses the insurer and the level of cover, then pays the premium on behalf of the staff. For employees, it provides peace of mind, knowing that if they fall ill with an acute condition, they can access private diagnosis and treatment quickly.
Key Features of Group Health Schemes
- Inclusive by Design: The policy covers a group of people under a single contract, which spreads the risk for the insurer.
- Lower Cost Per Person: Because the risk is spread across many members, the premium per person is usually significantly lower than for an individual policy.
- Favourable Underwriting: Many larger group schemes are offered on a 'Medical History Disregarded' (MHD) basis. This is a huge benefit, as it means the policy will cover eligible acute conditions, regardless of your previous medical history. This is something rarely, if ever, available on personal plans.
- Simple for Employees: As the employer handles the administration, there’s very little for the employee to do other than understand the benefits and learn how to make a claim.
However, it's not without its limitations. The level of cover is chosen by your employer, not you, and it ceases the day you leave the company.
Demystifying Personal Private Medical Insurance (PMI)
Personal Private Medical Insurance is a health insurance policy that you research, choose, and purchase for yourself and/or your family. You are the policyholder, and you pay the premiums directly to the insurer.
This route gives you complete control. You can compare different providers, tailor the policy to your exact needs and budget, and choose everything from the hospital list to the excess level.
The Critical Rule: Acute vs. Chronic Conditions
It is essential to understand that standard UK private medical insurance, whether personal or through work, is designed to cover acute conditions. An acute condition is a disease, illness, or injury that is likely to respond quickly to treatment and lead to a full recovery.
PMI does not cover chronic conditions. A chronic condition is an illness that cannot be cured but can be managed through medication and therapy, such as diabetes, asthma, or high blood pressure. The NHS provides excellent care for chronic conditions. Likewise, PMI typically excludes any pre-existing conditions you had before the policy began, unless you are on a specific type of group scheme.
Workplace vs. Personal PMI: A Head-to-Head Comparison
So, which offers better value? The answer depends entirely on your personal circumstances, your employer's offering, and what you prioritise in your health cover. Let's compare them side-by-side.
| Feature | Workplace Health Insurance (Group Scheme) | Personal Private Medical Insurance (Individual Policy) |
|---|---|---|
| Who Pays? | Your employer pays the premium. You may pay Benefit-in-Kind (BIK) tax on the value of this premium. | You pay the full premium directly to the insurer each month or year. |
| Cost | Generally lower cost per person due to group discounts. Often free or heavily subsidised for the employee. | Can be more expensive as you are buying as an individual. Costs vary by age, location, and health. |
| Underwriting | Often 'Medical History Disregarded' (MHD) on larger schemes, which can cover pre-existing conditions for acute flare-ups. | 'Moratorium' or 'Full Medical Underwriting' (FMU). Pre-existing conditions from the past 5 years are typically excluded. |
| Choice of Insurer | None. Your cover is with the provider your employer has chosen. | Full choice. You can compare the entire market with an expert PMI broker like WeCovr to find the best provider for you. |
| Policy Customisation | Limited or none. The cover level is fixed by the employer for all staff. | Highly customisable. You choose your hospital list, excess, outpatient limits, and optional extras like dental or travel cover. |
| Portability | Not portable. Your health insurance cover ends when you leave your job. | Fully portable. The policy belongs to you and moves with you through job changes and into retirement. |
| Adding Family | Often possible to add a partner or children, but you will usually have to pay the additional premium for them yourself. | Simple to add your partner and children to your policy, creating a single plan for the whole family. |
Example:
- David is a 35-year-old marketing manager. His company provides a comprehensive group PMI policy with MHD underwriting. This is incredibly valuable to him as he has a history of knee trouble. If it flares up again, his work policy will cover it.
- Laura, a 35-year-old freelance designer, has no workplace cover. She takes out a personal PMI policy. She excludes her past knee trouble during underwriting, meaning if it returns, she would rely on the NHS. However, she has full control over her policy and has chosen a specific hospital list that includes a clinic renowned for sports injuries, just in case of a new, unrelated injury.
The Hidden Costs: Understanding Benefit-in-Kind (BIK) Tax
If your employer pays for your private medical insurance, HM Revenue & Customs (HMRC) considers this a 'Benefit-in-Kind'—a non-cash benefit that forms part of your total remuneration. As such, it is taxable.
Your employer will calculate the 'cash equivalent' of the benefit (the cost of the premium for your cover) and report it to HMRC. You will then pay income tax on this amount, usually through an adjustment to your tax code.
How BIK Tax is Calculated
The amount of tax you pay depends on your income tax bracket.
| Premium Value (per year) | Tax Rate | Annual Tax Payable |
|---|---|---|
| £1,000 | Basic Rate (20%) | £200 |
| £1,000 | Higher Rate (40%) | £400 |
| £1,000 | Additional Rate (45%) | £450 |
Even with BIK tax, a company-funded policy is almost always cheaper for the employee than buying an equivalent policy personally. However, it's a cost you must factor in.
Leaving Your Job? The Critical 'Continuation Option'
This is one of the most important—and often overlooked—aspects of workplace health insurance. Your cover is tied to your employment. When you leave your job, your membership in the group scheme ends.
This can leave you in a vulnerable position, especially if you have developed medical conditions while covered by the company plan. If you try to buy a new personal policy on the open market, those conditions will now be classed as 'pre-existing' and will be excluded from your new cover.
This is where a 'Continuation Option' becomes vital.
Most group schemes allow you to switch your cover to an individual policy with the same insurer when you leave. This is known as exercising your 'group leaver' or 'continuation' rights.
The benefits are huge:
- No New Medical Underwriting: You can continue your cover without having to answer any new medical questions.
- Continuous Cover: Any conditions that were eligible for cover under the group scheme will remain covered under your new personal policy.
- Peace of Mind: You maintain your health security without any gaps.
The drawbacks:
- You are tied to that one insurer and cannot shop around for a better price or a more suitable policy from another provider without losing your continuous cover benefits.
- The premium for the new personal policy will be based on your age and will likely be significantly higher than what you were used to, as you lose the group discount.
Making this decision requires careful thought. An expert broker can be invaluable here, helping you understand the terms offered by your current insurer and comparing them to what you might get elsewhere, so you can weigh the pros and cons.
The Best of Both Worlds? Exploring Personal Top-Up Cover
What if your workplace policy is okay, but not great? Perhaps it has a low limit on outpatient consultations, a limited hospital list, or a high excess you'd have to pay.
In this scenario, a 'personal top-up' policy might be the solution. This is a secondary, personal PMI policy that you buy to run alongside your workplace scheme. Its purpose is to fill the gaps in your primary cover.
How Top-Up Cover Works
Let's say your work policy provides:
- Full cover for inpatient treatment.
- Illustrative estimate: A limit of £500 for outpatient diagnostics (scans, tests).
- No cover for physiotherapy.
You are concerned that a complex diagnostic process could easily exceed £500. You could purchase a personal policy that specifically offers a higher outpatient limit and includes therapy cover. If you need treatment, you would claim on your work policy first. Once its limits are reached, your top-up policy would kick in to cover the remaining eligible costs. (illustrative estimate)
Pros:
- Creates comprehensive, bespoke cover.
- Can be more cost-effective than replacing the work scheme entirely.
- Gives you peace of mind that you're fully protected.
Cons:
- Can be complex to manage two policies and understand how they interact.
- You are paying an extra premium on top of any BIK tax from your work scheme.
This is a specialist area of the private medical insurance UK market. If you are considering top-up cover, speaking to an experienced broker like WeCovr is highly recommended to ensure the policies work together seamlessly.
Making the Right Choice for You and Your Family
There is no single "best" option. The right choice is the one that best suits your health needs, financial situation, and attitude to risk.
Ask yourself these questions:
- What's on Offer at Work? First, get the details of your company scheme. Is it basic or comprehensive? Is it 'Medical History Disregarded'? What are the limits?
- What is My Medical History? If you have pre-existing conditions, a workplace MHD scheme is incredibly valuable and very difficult to replicate with a personal plan.
- How Secure is My Job? If you plan to stay with your employer long-term, their scheme is a fantastic benefit. If you are a contractor or expect to move jobs frequently, the portability of a personal plan is a major advantage.
- What Level of Choice Do I Want? If you want to choose your insurer, your hospital list, and every detail of your cover, a personal policy is the only way to go.
- What Are My Family's Needs? Does your work scheme allow you to add your family at a reasonable cost? Or would a separate family policy offer better value and more tailored cover?
The WeCovr Advantage: Navigating Your PMI Options
The UK private health insurance market can be complex. Comparing policies, understanding underwriting, and planning for job changes requires expertise. An independent, FCA-authorised broker like WeCovr acts as your expert guide.
- Whole-of-Market Comparison: We compare plans from all the UK's leading insurers to find the right fit for you.
- Expert, Free Advice: Our service is free for you to use. We are paid by the insurer only if you decide to take out a policy.
- Specialist Guidance: We can help you navigate complex situations, such as evaluating a group leaver continuation offer or setting up a top-up plan.
- High Customer Satisfaction: Our clients consistently rate our service highly for its clarity and helpfulness.
- Added Value: When you arrange your PMI with us, you get complimentary access to our AI-powered diet and calorie tracking app, CalorieHero, to support your wellness goals. Plus, clients who purchase PMI or Life Insurance can benefit from discounts on other types of cover.
Beyond Insurance: Proactive Steps for Better Health
While insurance provides a safety net, the best strategy is to invest in your health every day. Many PMI providers now actively support this, including wellness benefits in their policies.
- Nourish Your Body: A balanced diet rich in fruits, vegetables, and whole grains is fundamental. The NHS Eatwell Guide is an excellent resource for building healthy meals.
- Stay Active: The NHS recommends at least 150 minutes of moderate-intensity activity (like a brisk walk or cycling) or 75 minutes of vigorous-intensity activity (like running) a week.
- Prioritise Sleep: Aim for 7-9 hours of quality sleep per night. It's crucial for mental and physical recovery, immune function, and cognitive performance.
- Manage Stress: Chronic stress can impact your health. Techniques like mindfulness, meditation, or simply making time for hobbies can make a big difference. Many PMI policies now offer access to mental health support lines and apps.
Ultimately, combining a healthy lifestyle with the right medical insurance provides the ultimate peace of mind.
Is private health insurance worth it if I have the NHS?
Does private medical insurance cover chronic conditions like diabetes or asthma?
What happens to my health insurance if I am made redundant?
Can I have both a workplace and a personal PMI policy at the same time?
Ready to explore your private medical insurance options and find the best value for your needs? The friendly experts at WeCovr are here to help. Get your free, no-obligation quote today and gain clarity and confidence in your health cover.
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.
