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Business health insurance 

Rebecca Goodman
Written by  Rebecca Goodman
Donna McConnell
Reviewed by  Donna McConnell
8 min read
Updated: 02 May 2024

Small business health insurance plans are a popular perk for employees and can improve the health and wellbeing of a company, along with lowering the number of sick days taken. Here we look at everything you need to know about how business health plans work.

What is small business health insurance? 

Business health insurance works in a similar way to private health insurance for an individual. You can buy a group policy, which will apply to your workers, and they can then claim on the insurance if needed. There will be a limit on the amount of money they can claim per year, and there may be some exclusions with the policy. 

Each small business health insurance plan will work differently, depending on the provider and the level of cover, but most provide non-urgent private healthcare and include things like physiotherapy and surgery. 

As the care available through business medical insurance is given at private hospitals and surgeries, this means you can also skip long NHS waiting lists. Following the pandemic, lists for non-urgent treatment have spiralled in the NHS, to an average time of around 14 weeks, according to the British Medical Association private medical care is paid for, unlike the NHS which is free at the point of service, using it means waiting times are much lower. 

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Why is business health insurance important? 

Having a business health plan is a key driver for over 57% of people when choosing a job, according to a 2023 study from the Association of British Insurers (ABI)

It also found that 65% who accessed private healthcare didn’t need to take sick leave and 21% were supported to return to work. 

If you have a business health plan, this is a valuable benefit to employees and, in addition, the company they work for.  

Through the plan, workers will be able to access private healthcare which usually has lower waiting times than the NHS and people can access help in a range of different ways, including video calls. This means staff can get back to work faster, and they’re taking less time off to attend appointments, or to get better. 

It’s also important for staff as it’s a useful benefit to have, giving them access to healthcare and a range of extra medical treatment - such as tests and early diagnosis for illnesses. A business medical insurance policy can also help boost staff wellbeing, productivity and motivation, lowering the number of people leaving a company.  

What are the benefits of business health insurance?  

There are worthwhile benefits to both staff and employers when a business health plan is offered.  One of the main benefits to a company is lowering staff sickness days, which jumped to a 10-year high in 2023. (3)  If you can afford to buy a package as a company, it can have several benefits for a business, these include: 

  • Lowering staff sickness and days off 

  • Faster access to medical care and diagnosis for your staff 

  • A generous benefit which can help to attract and retain the best employees 

  • Tax advantages, many companies will get tax relief on business health plans as it’s classed as a business expenditure  

What does business health insurance cover? 

The exact details of a business health insurance plan will depend on the insurer you choose, and the level of cover. However, most will include the following factors: 
 

  • Hospital and surgery treatment: you’ll be covered for a range of medical care at hospitals, surgeries or specialist units, both as a day patient or a private room if you need to stay longer. 

  • Diagnostic tests and specialist treatment: tests, X-rays, MRIs and CT scans along with treatment and consultations will be covered, including for cancer. 

  • Physiotherapy: medical care with a physiotherapist, osteopath, acupuncturist or chiropractor. 

  • Mental health: consultation, treatment and counselling with medically trained specialists. 

  • GP appointments: you’ll usually be able to request a virtual or in-person GP appointment at any time of the day or night, for you or any family members on the plan. 

  • Private prescriptions and fit notes: you’ll be covered for the cost of private prescriptions which can be delivered to you. 

  • Discounts and benefits: you may be able to access cheaper gym memberships, discounts on sports equipment and wearable tech 

  • Choice of location: you can usually choose the hospital or treatment centre. 

Are there any limitations or exclusions in business health insurance policies?  

As with any type of insurance, some things won’t be covered. This will depend on the business health insurance plan you choose but will usually include the following:  

  • Urgent medical care 

  • Pre-existing health conditions 

  • Pregnancy and childbirth 

  • Cosmetic surgery 

  • Chronic conditions such as diabetes 

  • Fertility treatment 

  • Dialysis 

  • Treatment for substance abuse or addiction 

  • Weight-loss surgery 

  • Dental treatment 

How much does business health insurance typically cost? 

The cost of a health business plan will depend on lots of different factors, so there’s no one set price. These include, how many people you are including on the plan, where you’re located, the cover you would like your employees to have, and how much you are paying to cover the costs.  

The type of business you have will also affect the cost, and it’ll be more expensive for high-risk businesses, such as construction, when compared to office jobs, for example.  

You can also decide how much an employee may have to contribute if they claim on a policy, also known as the excess. 

As a guide, some of the most basic plans cost around £8 per employee and around £30 for a more comprehensive package, which covers a range of different things.  

What factors should be considered when choosing a business health insurance plan? 

Before you buy a business health insurance plan, it’s worth thinking about the following things: 

  • How much cover do you want to provide for your employees 

  • Will you allow employees to add family members to their policy 

  • What level will you set the employee excess at (the amount they need to pay) 

  • Will you include any additional extras (such as gym memberships) 

You may also want to consider health cash plans for your company. They work in a similar way to business health insurance but with these plans, employees pay up front for treatment and then claim the money back from an insurer.  

How can a business apply for health insurance? 

You can buy business health insurance online or over the phone. It is usually a quick process, once you’ve entered in some details about your company and the type of cover you would like to buy. You will be given a range of quotes to choose from, or you may need to give extra details - on the phone or online - before you’re given a quote.  

There are lots of plans to choose from, so you’ll need to shop around to find the best one for your company. In some cases you may be able to lock in the rate you pay for two years, instead of just 12 months, so this is also something to consider. 

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