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What is Group Health Insurance?

Group Health Insurance is a type of private medical insurance purchased by businesses to provide their employees with fast access to the treatment they require. Plans typically offer a choice of consultant, hospital and date of treatment to the employee, allowing them full control and ensuring they can return to work as soon as possible.

For many of our clients, one of the key benefits of private healthcare is that it negates NHS waiting lists and is free of the inevitable restrictions that a publicly funded healthcare system encounters.  

You might also see Group Health Insurance referred to as: Business Health Insurance, Company Health Insurance or Corporate Health Insurance.

The scope and value of Group Health plans can vary wildly, depending on the size of the business and its available budget.

At Engage Health Group, we’ve helped businesses of all sizes find their ideal policy by working across the insurance marketplace to deliver the best deals.

 

What does Group Health Insurance cover?

Companies can largely pick and choose which benefits they feel will be of the highest importance and of greatest value. So – to an extent – your Group Health Insurance can cover whatever you wish, as long as it remains within budget.

But there are some constraints. First you need to be aware of two main medical categories: ‘Acute’ and ‘Chronic’ medical conditions.

 

Acute

A medical condition that responds well to active treatment and where the patient can be returned quickly to their previous state of health/degree of activity. For example, a fractured arm, a hernia or cataracts are classed as acute conditions.

Acute conditions CAN be covered by medical insurance.

Chronic

A condition which cannot be cured and does not improve through active treatment. Chronic conditions can typically only be “maintained” or “managed”. A good example is asthma or Type 1 diabetes.

Chronic conditions CANNOT be covered by medical insurance.

Remember, it’s not the severity of the condition that matters most, it’s the prospect for recovery. Sometimes the line between acute and chronic conditions can be blurred, so we’re always on-hand to answer specific questions from our clients in relation to a claim.

 

Group Health plans typically cover:

  • Consultations with a specialist (subject to insurer fee guidelines)
  • Diagnostic tests (such as blood tests, x-rays and scans)
  • Operations and surgical procedures
  • Hospital stays and nursing care
  • Cancer treatment, such as radiotherapy and chemotherapy
  • Medications, some of which may not be available on the NHS
  • Physiotherapy, osteopathy, chiropractic treatment
  • Mental health and psychiatric treatment
 

Inpatient, day-patient or outpatient?

You’ll often see references to ‘inpatient’, ‘day-patient’ and ‘outpatient’ care within the terms of a policy. For example, an insurance company might stipulate an exclusion for inpatient care so it’s well worth knowing what these terms mean.

  • Inpatient is where a patient is admitted to hospital overnight and occupies a bed. I.e. the patient is IN the hospital overnight.
  • Daypatient is where a patient is admitted to hospital and occupies a bed, but does not remain overnight.
  • Outpatient is where a patient is not admitted to hospital nor occupies a bed (a scan, for example). I.e. the patient is OUT promptly.
 

All three scenarios CAN be covered by a Group Health policy.

 

Additional healthcare benefits

Group Health Plans often include additional health perks which can raise the value – and usefulness – of a scheme. Such added extras can include:

  • Virtual GP/ Telemedicine
  • Private Prescriptions
  • GP and nurse helpline
  • NHS Cash Benefit
  • Employee Assistance Programmes (EAP)
  • Second Opinion Service
  • Health Screening
  • Gym discounts
  • Dental cover
  • Optical cover
  • Travel cover
  • Retail discount
 

With such a wide array of core benefits and added extras, Business Health Insurance schemes can be carefully tailored to the needs of any business.

 That’s why, as a health insurance broker, we make it our job to get acquainted with your business and its needs before advising on the best course of action. After all, a Group Health Insurance package which worked perfectly for one client, is unlikely to be a perfect fit for you. Industry, sector, demographics, company size and budgetary constraints are all important factors in uncovering the right deal.

Need help negotiating the world of Group Health Insurance?
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Why buy Group Health Insurance?

Both the company and its employees stand to benefit.

Employer:

  • Cost effective vs retail plan: Group Health Insurance for employees is cheaper per person than buying individual policies
  • Great way to engage staff: Your team will feel valued by a scheme which protects their health and wellbeing. Indeed, they may also be given the tools to improve their wellbeing.
  • Improve morale and productivity: The knowledge that an employer is offering beyond statutory requirements, really can boost the mindset of individual employees. 
  • Great retention tool: Staff who feel looked after in a meaningful way are less likely to leave. Especially if rival employers do not offer the same level of benefit.
  • Reduce sickness absence: Health issues are quickly addressed and, potentially, even avoided.
  • Ensure fast treatment and return to work: Particularly, if an operation is required. For example, a hernia operation typically has a lengthy waiting time on the NHS.
  • Classed as a business expense: So it’s a tax efficient way of looking after your staff. 
 

Employee:

  • Access to otherwise unaffordable benefits
  • Fast diagnosis & treatment for medical issues
  • Opportunity to add family members
  • Treatment in private en-suite rooms
  • Choice of consultant
  • Choice of hospital
  • Choice of treatment date
 
According to Forbes, 89% of workers at companies that support wellbeing initiatives are more likely to recommend their company as a good place to work.
 

How much does Group Health Insurance cost?

The following factors influence the cost of Group Health Insurance:

  • Age: the average age of those employees included in the scheme & ratio of young to old.
  • Location: where the company is based geographically
  • Benefits selected: the benefits to be included in the scheme
  • Claims: previous claim history (if you have one) from previous insurer
  • Insurer: each insurer will offer different price points, which partly depends on their existing financial performance, but also inclusions/exclusions offered
  • Underwriting: which underwriting method is chosen upon application
  • Number of employees included: the more people included in a scheme, the lower the premium per person.
 

Below are indicative costs for small and medium businesses (based on new to market schemes, comprehensive cover, home counties location and non-London hospitals). *

No of Employees
Average Age
Monthly Cost per Employee
25
£28.00 - £35.00
35
£31.00 - £48.00
45
£42.00 - £62.00
55
£61.00 - £88.00
No of Employees
Average Age
Monthly Cost per Employee
25
£22.00 - £30.00
35
£27.00 - £45.00
45
£33.00 - £52.00
55
£45.00 - £69.00
No of Employees
Average Age
Monthly Cost per Employee
25
£17.00 - £25.00
35
£24.00 - £41.00
45
£31.00 - £50.00
55
£40.00 - £62.00
No of Employees
Average Age
Monthly Cost per Employee
25
£13.00 - £22.00
35
£21.00 - £35.00
45
£28.00 - £44.00
55
£38.00 - £58.00

*Premiums shown are based on multiple sources including Engage Health Group existing client base, company quotations issued, external sources, dummy quotations via insurer portals and market averages. Other variables can apply and all figures presented are for indication only purposes.

"We have been delighted with the service from Engage Health Group since moving to them a year or so back. They offer a responsive, knowledgeable and imaginative service which has enabled us to improve the accurate targeting and cost of our health insurance needs. It is always a pleasure dealing with them.”

Care Home Business, Cardiff, 20 employees.

How do I buy Group Health Insurance?

There are two ways of buying Group Health Insurance:

  1. Go direct to the insurance provider
  2. Use an independent insurance broker
 

Option 1: Direct to the insurer

AKA the hazardous route. Ultimately, you are talking directly to a sales advisor who will want you to purchase the deal that works best for them from a commercial perspective. It’s only further down the line that you might discover the deal isn’t as great as it first sounded. 

For example, perhaps it doesn’t provide the breadth of coverage you first thought, or the claims process is more complicated than first thought – leading to a stressful and time-sapping experience for HR.

We’ve spoken to many businesses and HR professionals who have suffered this very fate. 

 

Option 2: Via an independent broker

Any truly independent insurance consultant or broker will have your best interests at heart. For example, as independent experts we work for the customer and not the insurance provider. The client’s needs are our number one priority

We also have existing relationships with ALL the different insurance providers – we know what deals are available and what may be negotiable. Furthermore, the insurance companies know that we are experts in our field, so we can get to a competitive price at speed. They also know we’re talking to the other insurance providers too. In other words, they’re competing for our attention and therefore will offer deals unavailable to the public.

But a note of caution: not all brokers are truly independent. Some, have cosy relationships with one or two providers and therefore are limited in what deals they have to offer.

We have outlined some more of the pros and cons below.

PURCHASE CHANNEL
Independent advice on all insurers in the market
Annual market reviews, price comparison & market negotiation
Regulated by the FCA to give advice about whole market
Real time experience of all insurer claims & service levels
Sales function free to recommend best option from multiple insurers
Personal ongoing service
Premium the same as other channels
Specialist independent broker
Direct from insurer
Sales agent of specific insurer/franchise
Comparison sites
Usually price only

Frequently Asked Questions

Which private hospitals are covered with health insurance?

There are hundreds of private hospitals and facilities across the British Isles and with a company health insurance plan, employers have the flexibility to choose what best fits their organisation.

 

Some of the key hospital groups include Aspen, BMI, HCA, Nuffield, Ramsey and Spire, all of which are available via UK health insurers.  Some insurers offer full hospital coverage as standard, whereas some choose to group them with different premium costs attached, meaning it’s very important for employers to assess what is suitable for their staff.

 

In addition, many insurers allow their members to be treated within the private facilities of NHS hospitals, such as NHS pay-beds.

Options to help reduce the cost of your company medical insurance plan

Excess

An excess means that employees will pay a pre-determined amount towards any eligible treatment costs, in exchange for a discount on the company paid premium.  All insurers offer excesses and they can range from £50 up to £2,000.  

 

The most common excess on Business Health Insurance is £100, and this is typically applicable per person, per policy year.  This means that the health insurance excess is only paid once during the 12 month policy year, but if employees have family members on cover, they each carry the same excess value.  But beware, if medical treatment spans two policy years (across the renewal date), employees may be liable to pay the excess twice for the same condition.

 

Some insurers offer a “per claim” excess, which delivers a greater premium saving, but is naturally not as welcomed by employees.

Shared Responsibility

Similar to an excess but slightly different in its approach.  With shared responsibility, the employer still selects a co-payment amount which the employee must pay up to (eg £100) for any treatment costs/claims.

 

However, instead of the employee having to pay the entire £100 before the insurer steps in, both parties (employee and insurer) agree to pay a 25%/75% split for every claim (no matter how small), until the £100 member contribution is reached.  From this point, the insurer covers all costs.

 

6-week rule

If this option is selected, it states that should an employee need in/day-patient treatment and it’s available on the NHS within 6 weeks, the employee must follow this route.  If the NHS cannot treat the employee within 6 weeks, they can access private care immediately.

 

Any available out-patient treatment (consultations/diagnostic tests for example) can still be accessed right away irrespective of the NHS waiting list, and the option can deliver up to a 25% discount on the company premium.

Will Private Medical Insurance cover pre-existing health conditions?

Health Insurance, much like any insurance, is designed to cover new conditions which aren’t known to us when a policy starts.  If you have an ongoing, pre-existing or known medical condition prior to starting a policy, it is very unlikely that any insurer will agree to provide cover for this, depending on its severity.

 

However, for a company purchasing Business Health Insurance for their staff, there are options which exist whereby pre-existing conditions can be covered.  This is namely Medical History Disregarded (MHD).

How are Group Health Insurance renewal premiums calculated?

Once a company scheme is in place the monthly rates will be fixed for 12 months, other than for any member adjustments.  

 

The insurer will then provide renewal terms between 6-8 weeks before of the annual renewal date, and these will be calculated based on the following:

 

  • Age: If the average age of your company scheme has changed
  • Base rate: If the insurer has increased their base rates for all schemes due to medical inflation
  • Claims: How your own company scheme performed (premium paid vs claims made)

 

Most business health insurance premiums increase between 8-12% per annum, but a good independent intermediary/benefit consultancy will negotiate on the employer’s behalf as part of their standard market review service.

What isn’t covered under Group Private Medical Insurance?

►  Routine pregnancy

►  Congenital conditions

►  Chronic conditions

►  Accident & Emergency

►  Planned Treatment overseas

►  IVF and infertility treatments (unless advised otherwise)

►  Gender reassignment (unless advised otherwise)

►  Cosmetic treatment

How many employees do you need to qualify for group health insurance?

Many insurers only need a minimum of 2 employees, but some require 3 as their starting point.

Does private health insurance replace the NHS?

No – private healthcare should be used to complement our fantastic NHS and cannot replace it.  The NHS is best placed for a number of key areas of healthcare such as childbirth, accident & emergency and intensive care.

What tax is payable on company health insurance?

Like many insurances, Insurance Premium Tax (IPT) applies and is automatically baked into the premium.  This is paid by the employer at the current rate of 12%.

 

For the employee, Business Health Insurance is classed as a benefit in kind, and is therefore a taxable benefit for the purposes of P11D.  The amount of tax an employee pays will be linked directly to their own portion of the overall premium and their own tax bracket.

How do I make a claim under Private Medical Insurance?

► Obtain a GP referral from your own GP, a private GP or using telemedicine/virtual routes

 

► Contact your insurer to advise what is needed (consultation/test etc)

 

► Assuming treatment is eligible you will be given an authorisation number

 

► Give the authorisation number to the consultant/hospital and all bill will be settled directly

 

Telemedicine/Virtual GP

 

Most Private Medical Insurers now provide a Virtual GP service as part of their standard policies.  Telemedicine in general cone exploded in recent years due to long waiting lists with NHS GP’s, and the ability for people for fit a consultation around their schedule.  The benefits of a Virtual GP are as follows:

 

► Face-to-face GP consultation via desktop or smart device

 

► Employees can choose a time to suit them

 

► Employee can select a GP based on gender or specialist clinical interest

 

► Photos can be uploaded to the GP in advance of the call (rashes etc)

 

► The GP can prescribe medication which can be delivered home

 

► The GP can refer you for further treatment (consultation etc) via health insurance

 

► Less time away from work

 

► No long wait to speak with a GP (appointments can be booked in just a couple of hours)

 

Approximately 70% of GP consultations don’t actually require any physical examination, which means that telemedicine can greatly reduce the strain on the NHS.

 

NHS Cash Benefit

Many insurers have this option included as standard within their plan.  If a member needs to be admitted to hospital for an in/day-patient procedure and the member is happy to follow that route, they are able to claim the NHS Cash Benefit in exchange for not being treated privately. This can range from £50 to £250 per night/day depending on which insurer you are with.

 

Mental Health and Psychiatric treatment

 

An increase in mental health awareness has inspired employers to seriously consider how they can best provide for their staff in this area.  Conditions such as depression and anxiety are now more openly reported and it is widely acknowledge that people need help in these areas. 

 

Company health insurance providers have always offered some provision in this area, but they’ve really excelled in the past 24-36 months to provide a greater degree of assistance.  These can include:

 

► Cognitive Behavioural Therapy (CBT)

► Talking Therapies

► Telephone counselling

► Face to Face Counselling

► Mindfulness courses (online and via apps)

 

For more serious conditions, Psychiatric and psychological services can also be selected as part of a Business Health Insurance policy.

 

Read more on mental health issues related the Covid pandemic.

 

Physiotherapy

 

Physiotherapy and muscular-skeletal conditions in general, account for a huge proportion of Private Medical Insurance claims across the entire market.  Because of this, most insurers will have specific physio networks set up in order for them to:

 

► Control costs

► Guarantee quality outcomes

► Improve the member journey

 

Insurers will always prefer for employees/members to follow their pre-established pathways for the above reasons, however, there are also some excellent benefits to members also:

 

► No need to obtain a GP referral

► Enhanced number of sessions made available

► Cost of physiotherapy sessions covered in full with no shortfalls

 

If an employee wanted to use a physiotherapist that wasn’t part of the insurer’s network, this can still usually be accommodated; however, the insurer may only agree to pay a certain amount per session, leaving the employee to cover the difference.

Insurer Fee Guidelines

All insurers operate fee guidelines behind scenes, and they basically stipulate the £ amount an insurer will pay up to for consultants, anaesthetists and certain procedures.  Whilst insurers might advise their cover is “full refund”, in actuality, this means that they will pay in full up to the amount they deem to be reasonable and customary for that item.

 

For example, if nine out of ten consultants charge £220 for an initial orthopaedic consultation, and the tenth consultant wants to charge £300, the insurer needs to challenge this.  It is then for the tenth consultant to demonstrate to the insurer why their expertise is worth more. If they can show lower readmission rates, heightened clinical skills etc, then the insurer may agree to meet the rate.  If not, the insurer will apply a fee guideline and if a member chose to use the tenth consultant, they would be personally liable for the difference (the shortfall).

 

The best way to avoid shortfalls is to ensure that pre-authorisation is sought prior to any consultations or treatment, as the insurer will be able to advise members is advance.

 

Some insurers do not operate in this way and offer true “full cover” as standard.  Other insurers provide this feature as an upgrade option.

Is health insurance a business expense?

Yes – Business Health Insurance can be classed as a business expense.

What is the best health insurance UK?

The UK business health insurance market is a competitive place and following are the key providers:

  • Bupa
  • AXA PPP
  • Aviva
  • Vitality
  • Cigna
  • Freedom
  • The Permanent Health Company (PHC)
  • Western Provident Association (WPA)

 

Whilst all of these insurers can deliver the core medical insurance benefits which customers want, each is uniquely different in many different ways. 

 

The range of benefits, features, modularity, service and cost can differ wildly, hence the important of independent advice coupled with annual market review and premium negotiation.

 

Read our Guide to UK Health Insurers.

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