Company health insurance for employees

It’s vital your employees are happy and healthy as it helps your business to run smoothly. This is one of the reasons many employers decide to offer company health insurance as it gives employees access to healthcare as and when they need it. 

Company health insurance is typically offered to full-time or part-time members of staff and gives them peace of mind that support is available if they become unwell. This insurance acts in a similar way to individual health insurance, as employees can claim on the insurance for treatment costs, but may need to pay a small excess. 

Who is eligible?

You may be able to get company health insurance if you are a: 

• Small business

• Corporate business

• Sole trader with employees

Does my business need it? 

Businesses are not legally obliged to offer company health insurance to their employees, but it is definitely worth considering as it’s an attractive benefit for your workforce. Company health insurance is also available for small and corporate businesses - so there's no excuse not to explore it.

Whatever the size of your business, there is health insurance available that supports workplace health - you’ll just need at least two employees to take out a group policy. 

• Cheaper per employee: Some providers state that if you have more than 250 employees, then you’ll need corporate health insurance and providers will offer an extensive package for your business. This might work out cheaper per employee, as you’ll be able to spread the cost between more members. 

• Flexible packages: Small business health insurance works in a similar way, but providers will offer packages which are suitable for the size of your business. A small business could be up to 250 employees and it also works well for sole traders who have employees.

• Individual health insurance: If you are a sole trader with no employees, you can choose an individual health insurance policy through your business. 

There are a range of providers in the market offering company health insurance, so it’s important to explore all the options before making a final decision. 

You should be able to adapt your cover to suit the needs of your employees, and this will impact the premium depending on whether you are adding or removing benefits. For example, you might decide to increase the cover to include dental and optical expenses or you could reduce the amount of out-patient cover. 

Always take the time to think about what cover matters to you and your employees. Then make sure your chosen provider can adapt the cover to suit your needs. 

It’s important to note that employers will have to pay tax on this insurance. For example, they will need to pay the total premium of the policy and this includes the Insurance Premium Tax; the standard rate is 12%. This is because health insurance doesn’t include VAT in the UK. 

However, you can claim tax relief on health insurance premiums as it’s an allowable expense for corporation tax purposes. But HMRC does consider company health insurance as a taxable benefit, so employees will be taxed on the premiums too. 

Remember, tax rules and regulations can be complex and subject to change. Consult with a tax professional or accountant to understand the specific implications for your business and ensure compliance with all HMRC requirements.

If you are interested in setting up company health insurance for your business, then the first steps you can do are:

• Explore the different providers available, for example Bupa, AXA, Vitality and Aviva offer company health insurance.

• Fill in the online form to apply via the provider website

• Speak with a financial advisor if you need guidance through this process