Why should small businesses consider a company health insurance scheme?

Boosting the benefits package of a small business is one of the ways in which such a business is able to attract and retain a better calibre of employee. Business health insurance, also sometimes known as PMI is one of the most sought after benefits for employees after holiday entitlement and pension.

In addition to the benefits a business will see inhiring new staff such a health insurance policy helps employees stay healthy and get them back to work quickly should they suffer illness or injury - reducing staff absence due to sickness.  

Small business health insurance plans cater to a specific size of company and although policies may still vary they tend to be designed for business with between  2 and 49 employees. 

Voluntary Employee Paid Schemes

With these health insurance schemes, employees decide whether or not to participate in the scheme, if they do, they make voluntary contributions. The premiums for this private health insurance are made available at a discounted or 'group rate'. The real benefit of such a scheme is generally only ever realised on much larger schemes.

Company Paid Health Insurance Scheme 

In this instance the company meets the health insurance premium cost on behalf of their employees – the option is simple to understand and the company pays for the premiums for the benefit of the employee. Please note such benefit payments often incur a p11d benefit for the employee. 

Who is Covered by the Scheme 

Again, cover varies from scheme to scheme and while some policies will only cover the employee, others provide cover for their dependents – meaning their families and partners also receive the benefit. 

David, Consultant at Drewberry Insurance explains "The NHS is very good for long term chronic conditions and emergencies, however many business owners invest in a private medical insurance plan for their employees to ensure the staff receive the best treatment as quick as possible for short term acute medical conditions so they can return to work as quickly as possibly. 

Cost Effective Policy Measures 

There are a numbers of ways in which premiums can be contained when considering small business health insurance plans. For example: 

Outpatient Treatment – the level of cover that is available for outpatient scans, tests and consultations. The higher the level of cover the higher the premiums tend to be. Many basic pans will only provide outpatient treatment relating to prior inpatient treatment, a mid-range plan may provide a level of outpatient treatment which is limited by a monetary cap and a comprehensive plan is likely to cover outpatient treatment in full.

Six -week Option – this is perfect for small business health insurance on a budget. Members of the scheme are only covered for private health care if in/day/out-patient treatment is only available through the NHS after a six-week waiting period. If the NHS waiting period is more than six weeks the policy kicks in and urgent treatment is covered.

Excess Options – there are various 'excess options' and depending upon the excess, this determines the premium of the policy. Obviously the higher the excess the client pays, the less the policy premiums cost. Excess amounts vary from between £100 - £500 and it would be the employee/member who would be liable to pay this excess. Once the initial excess has been paid - addition medical costs during that year will be covered by the insurance policy.

Switching Small Business Health Insurance to a Different Insurer

Any small business owner who has an existing corporate medical insurance arrangement should review this on an ongoing basis to ensure the policy and the pricing is competitive. A business can often benefit from using an intermediary who is an expert in the area to ensure the policy fits the needs of the business and is competitive in the marketplace.

About Author

Rupert Bright is a health and protection insurance expert who works for the London based Drewberry Insurance.

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