Group health insurance

What is group health insurance?

Group health insurance is a form of private health insurance commonly procured by businesses for their employees. It caters to multiple staff members, providing them with access to various medical services and treatments. This type of private medical insurance grants employees the flexibility to select their preferred consultant, hospital, and treatment date, bypassing NHS waiting lists and restrictions. Businesses opt for this to provide comprehensive healthcare benefits, promoting the well-being of their workforce while maintaining productivity. With group health insurance, employees receive timely medical attention without the constraints often associated with the national health service.

What can group health insurance cover?

Group health insurance plans typically cover a range of medical services and treatments, including:

• Consultations with healthcare professionals
• Diagnostic tests and screenings
• Surgical operations and procedures
• Hospital stays for inpatient care
• Cancer treatments such as chemotherapy and radiotherapy
• Physiotherapy sessions for rehabilitation
• Mental health services and psychiatric treatment

Inpatient, day-patient, and outpatient care coverage

• Inpatient care refers to treatment that requires an overnight stay in a hospital, typically for more intensive procedures or recovery.
• Day-patient care involves medical procedures where patients are admitted to a hospital or clinic for a portion of the day but do not require an overnight stay.
• Outpatient care refers to medical services provided without requiring an overnight stay, often in clinics or outpatient departments.

It's important to note that all three types of care can potentially be covered by a group health insurance plan, offering flexibility and comprehensive coverage for employees.

Additional benefits

Group health insurance plans often come with a variety of added value benefits to enhance overall well-being. These may include:

• Virtual GP services for convenient consultations.
• Private medical prescriptions
• Health screenings to monitor and detect health issues early.
• Gym discounts to promote physical fitness and wellness.
• Dental cover for routine check-ups and treatments.
• Optical cover for eye examinations and corrective lenses.
• Travel cover for medical emergencies during trips.
• Retail discounts on health-related products and services.

These benefits go beyond traditional healthcare coverage, offering comprehensive support for employees' health and lifestyle needs.

What are the benefits of group health insurance?

How much does group health insurance cost?

The price of group health insurance can depend on a number of factors. We explore them below:

• Average Age of Employees: Premiums may vary based on the average age of the workforce, with older employees typically leading to higher premiums due to increased healthcare utilisation.
• Geographic Location: The location of the company can influence insurance costs, with premiums varying based on regional healthcare costs.
• Selected Benefits: The specific benefits chosen, such as coverage for dental, optical, or mental health services, can impact the overall cost of the insurance plan.
• Claims History: Previous claims made by the group can affect premiums, with higher claims histories potentially leading to increased costs.
• Choice of Insurer: Different insurers offer varying pricing structures and levels of coverage, influencing the overall cost of group health insurance.
• Underwriting Method: The underwriting method employed by the insurer, such as Moratorium Underwriting or Medical History Disregarded (MHD), can affect premium calculations.
• Number of Employees: Larger group schemes with more employees often receive lower premiums per person due to spreading the risk across a larger pool of individuals.
• Premium Discounts: Insurers may offer discounts for factors such as healthy lifestyle initiatives, participation in wellness programmes, or bundling insurance products.

If you are looking for a starting point, you can consider it to be £75 per employee. Remember, it may be higher or lower depending on the factors above.

Group health insurance exclusions

Exclusions in group health insurance plans include:

• Chronic Conditions: Long-term health issues requiring ongoing management and treatment may not be covered under the plan.
• Pregnancy: Maternity-related expenses, including prenatal care and childbirth, will likely not be covered.
• Cosmetic Surgery: Procedures performed for aesthetic purposes rather than medical necessity may be excluded from coverage.
• Addiction Treatment: Services related to substance abuse rehabilitation or addiction therapy may not be covered by the insurance plan.

It's essential for individuals to review the policy details carefully to understand any exclusions and limitations before enrolling in a group private medical insurance plan.

Are pre-existing medical conditions excluded?

Pre-existing medical conditions may be excluded under certain underwriting options in group health insurance. Moratorium underwriting excludes conditions experienced in the past five years. Full medical underwriting often excludes pre-existing conditions upfront. Medical history disregarded (MHD) underwriting ignores pre-existing conditions entirely, but it's typically only available to larger companies. The approach to pre-existing conditions varies based on the chosen underwriting method.

Policy options that impact the cost of group medical insurance

Excess

An excess is a predetermined amount that employees contribute towards eligible treatment costs under a group health insurance policy. In return, the company receives a premium discount. Excess amounts typically range from £50 to £2,000, with £100 per person per policy year being common. It's important to note that employees may need to pay the excess multiple times for the same condition if treatment extends across policy years. Understanding excesses is crucial for employees to anticipate their healthcare expenses and benefits accurately.

Psychiatric cover

Psychiatric cover in group health insurance is essential for mental health treatment, which can be costly. Despite the expense, it can be worth it, considering mental health issues cost the UK £70 billion each year. This business health insurance cover shows support for employees' mental well-being, helping them stay healthy and productive.

Dental and optical cover

Dental and optical cover in group health insurance can help with the cost of routine care like eye tests and dental checkups. Including this benefit as part of a company health insurance policy allows employees to visit opticians and dentists, ensuring their basic eye and dental health needs are met.

Cover for family members

Group health insurance often extends coverage to immediate family members of employees, including spouses and dependent children. Depending on the employer's policy, the cost of adding family members to the plan may be borne by either the employee or the employer. This option allows employees to ensure the health and well-being of their loved ones, providing peace of mind that their family members have access to the same quality healthcare benefits.

Hospital coverage and choice

Employers have the flexibility to select the private hospitals and facilities covered by their group health insurance plan. Major hospital groups available through UK health insurers include private NHS facilities and various private hospital networks. Some insurers offer full hospital coverage as standard in group health plans, while others categorise hospitals with different premium costs. Employers must assess what suits their employees best when choosing hospital coverage options to ensure appropriate access to healthcare.

Shared Responsibility

Shared responsibility in group health insurance involves both the employee and insurer agreeing to split the cost of treatment claims until the employee's contribution reaches a predetermined amount. For instance, the split could be 25%/75%. Once the employee's share reaches the predetermined threshold, the insurer covers all remaining costs. This approach, akin to a co-payment, ensures that both parties contribute to healthcare expenses, mitigating financial burdens on employees while still providing comprehensive coverage through the insurer. It's a collaborative strategy that promotes cost-sharing and ensures that employees receive necessary medical treatment without excessive financial strain.

6-week rule

The "6-week rule" in group health insurance dictates that if an employee needs in/day-patient treatment and it is available on the NHS within six weeks, they must follow the NHS route. However, if the NHS cannot provide treatment within this timeframe, the employee can access private care immediately. This rule does not apply to outpatient treatment, which remains accessible without waiting. It ensures that treatments are received promptly, whether through the NHS or private healthcare providers.

Your medical underwriting options

Full Medical Underwriting (FMU)

Full Medical Underwriting (FMU) involves employees disclosing their complete medical history to the insurer. While this option typically results in the cheapest premiums, pre-existing conditions are likely to be excluded from coverage. However, employees are informed upfront about any exclusions that apply. Despite being cost-effective, FMU requires thorough paperwork, as employees must declare their entire medical history.

Moratorium Underwriting

Moratorium Underwriting requires minimal initial information from employees. Conditions are excluded if the employee experienced them in the five years prior to the policy start date. Employees don't need to disclose medical history upfront. Instead, the insurer verifies at the claims stage to ensure the condition hasn't occurred during the disqualification period. This approach simplifies the application process but may lead to uncertainty regarding coverage until a claim is made.

Medical history disregarded (MHD)

Medical History Disregarded (MHD) underwriting is the most comprehensive option available with most insurers. It completely disregards any pre-existing conditions, regardless of when employees experienced them. This means employees can claim for any eligible condition under the policy's terms without their medical history impacting coverage. While MHD offers extensive coverage, it is typically the most expensive type of underwriting. This option is usually available to larger companies, typically starting with at least 20-25 employees.

How is group health insurance taxed?

Group health insurance premiums are typically paid by employers from pre-tax earnings and are treated as a business expense by HMRC. However, for employees, employer-provided group health insurance is considered a taxable benefit in kind (P11D), resulting in additional tax payments. Employers must fill out a P11D form to declare the benefit provided and may also need to pay the employer's National Insurance on the premiums. This taxation process ensures compliance with tax regulations for both employers and employees.