FinancesSmall business health insurance - choosing the right policy

Small business health insurance – choosing the right policy

When it comes to your business, your employees are essential – and regardless if you have one employee or a few dozen, the business thrives when your employees are healthy and happy. A great way to invest in your team’s well-being is to offer a health insurance plan to supplement the public NHS service from GPs and hospitals.

There are so many different suppliers and dozens of options to consider – for example, do you want to offer insurance for private care for all medical issues or just for major operations so your employees use the NHS for standard procedures but can go private and skip waiting times for bigger operations? And do you want to offer cover for the family members of your employees?

Some health insurance companies will only deal with businesses of a certain size, some will provide quotes for a company with just a single employee – and the rates quoted will depend on the type of cover you want, the number of employees, where in the UK you are based and the excess (the amount you pay before the insurance pays the rest).

Why is health insurance important?

Providing health insurance for your employees is a great way to attract and retain great employees. In today’s competitive job market, prospective employees consider health insurance as an important benefit when evaluating a job offer. By offering comprehensive health coverage, you can demonstrate your commitment to the well-being of your employees and create a positive work environment.

There’s a benefit to the business too: providing health insurance can lead to increased productivity and reduced absenteeism since if employees have access to timely medical care, they are more likely to address health issues promptly, resulting in fewer days off sick and improved overall performance.

The different types of health insurance available

In the UK, we’ve got a great free public health service from the National Health Service (NHS). This is funded from taxes and offers doctors (GPs) and hospital treatment for free, but some treatments are not available and sometimes there is a wait before treatment can be scheduled. In addition, there are private doctors, private specialists and private hospitals that offer quicker service and so cut waiting times.

To pay for private health care, you can either pay directly or if you have a health insurance policy, it will normally pay for many of the private medical facilities and specialists. Each option has its own advantages and disadvantages, and the right choice will depend on the specific needs and preferences of your employees.

As well as medical coverage, many health insurance policies will also cover dental work and eyesight tests – which for most employees would need to be paid for as neither are available to most employees on the NHS.

Choosing the right insurance policy for your business

When choosing health insurance for your small business, there are several key factors to consider. These factors will help you narrow down your options and select a plan that best meets the needs of your employees.

  1. Coverage and Benefits: Assess the coverage and benefits offered by each health insurance plan. Consider the range of services covered, such as hospitalization, outpatient care, and specialist consultations. Look for additional benefits like dental and eyesight coverage, mental health support, and wellness programs. The more comprehensive the coverage, the better protected your employees will be.
  2. Costs: Evaluate the costs associated with each health insurance plan. Consider the premiums and excess level.
  3. Taxable benefits: Most health insurance policies offered to employees will be classed as a taxable benefit, so needs to be declared either on the employees payslip or at the end of tax year on their tax return. This effectively means that the employee will pay tax on the value of the benefit (ie if an employee receives a health insurance cover worth £1000 and they are on a tax band of 40%, they will need to pay tax of £400 to receive the benefit of the health insurance).
  4. Geographic cover: Most insurance providers have different prices for different regions of the UK and for different types of hospital in each region. For example, if you want a policy that allows you to choose any hospital in the UK, this will be more expensive than using a smaller number of selected hospitals in your county.
  5. Network of Providers: Examine the network of healthcare providers associated with each plan. Ensure that the plan includes reputable hospitals, clinics, and specialists in your area. Having a wide network of providers will ensure that your employees have access to quality care without long waiting times.

By carefully considering these factors, you can narrow down your options and choose a health insurance plan that strikes the right balance between coverage, costs, and provider network.

Assessing the needs of your employees

Understanding the needs of your employees is important when choosing a health insurance provider. Each employee may have unique healthcare requirements, and it is important to choose a plan that caters to their needs.

Start by conducting a survey or holding employee meetings to gather information about their preferences and healthcare priorities. You might want to take into account factors such as age, existing medical conditions, and the number of dependents they may have. By involving your employees in the decision-making process, you can ensure that their voices are heard and that the chosen health insurance plan is well-received.

Additionally, consider the demographic makeup of your workforce. Younger employees may prioritize access to preventive care and wellness programs, while older employees may require coverage for chronic conditions or specialized treatments. By tailoring the health insurance plan to the needs of your employees, you can provide them with the best possible coverage.

Comparing providers and quotes

Once you have a clear understanding of your employees’ needs and preferences, it is time to research and compare health insurance providers in the UK.

Start by seeking recommendations from other small business owners or professionals in your industry. Word-of-mouth referrals can provide valuable insights into the quality of service provided by different insurance providers. Additionally, conduct online research and read reviews to gauge customer satisfaction and the overall reputation of each provider.

When comparing providers, pay attention to their track record in terms of claim settlement, customer service, and responsiveness. A provider with a strong customer support system will be invaluable when your employees need assistance with their health insurance claims or have queries about their coverage.

It is also important to consider the provider’s financial stability. Look for providers that have a strong financial standing and a history of paying claims promptly. This will ensure that your employees’ claims are processed efficiently and that the provider will be able to fulfill their obligations in the long run.

Coverage and premiums of insurance plans

When comparing health insurance plans, make sure you get clear quotes and models that show the costs to your business and to your employees (in terms of taxable benefit and for adding any additional family members).

Consider the following aspects when assessing the costs and coverage:

  1. Premiums: Premiums are the monthly or annual payments you make to the insurance provider. Take note of the premium amount for each plan and determine if it fits within your budget.
  2. Excess: The excess is the amount you must pay for any claim before the policy’s coverage kicks in.
  3. Maximum claims: Many policies will have maximum annual claim limits for benefits such as dental work or vision – for example, there might be a £500 annual maximum claim limit for dental work.
  4. Coverage Limitations: Review the coverage limitations of each plan. Some plans may have limitations on certain treatments, medications, or specialist consultations. Ensure that the plan covers the necessary services and treatments your employees may require.
  5. Family add-ons: Most plans will allow an employee to add their family members to their plan for an additional fee (normally paid by the employee).
  6. Pre-Existing Conditions: If any of your employees have pre-existing conditions, check if they are covered by each plan. Some insurers may exclude coverage for certain pre-existing conditions or impose waiting periods before coverage begins.

Additional benefits and services from providers

In addition to basic coverage, many health insurance providers in the UK offer additional benefits and services to enhance the value of their plans. These additional benefits can range from wellness programs and preventive care to mental health support and complementary therapies.

Consider the following additional benefits and services when evaluating health insurance providers:

  1. Wellness Programs: Some providers offer wellness programs that promote healthy habits and preventive care. These programs may include access to fitness facilities, nutritional counseling, and health screenings. Wellness programs can contribute to the overall well-being of your employees and help prevent health issues before they arise.
  2. Mental Health Support: Mental health is an essential aspect of overall well-being. Look for health insurance plans that provide coverage for mental health services such as counseling and therapy. Providing access to mental health support can help your employees manage stress and maintain optimal mental well-being.
  3. Complementary Therapies: Some health insurance providers offer coverage for complementary therapies such as acupuncture, chiropractic care, or homeopathy. These therapies can be beneficial for certain individuals and provide additional options for healthcare.
  4. Telemedicine: Telemedicine services allow employees to have virtual consultations with healthcare professionals, reducing the need for in-person visits. This can be particularly useful in situations where immediate medical advice is required or when accessibility to physical healthcare facilities is limited.

By considering these additional benefits and services, you can choose a health insurance provider that goes beyond basic coverage and offers comprehensive support for your employees’ well-being.

Applying for a health insurance policy for your business

Once you have chosen a health insurance provider and plan, the next step is to navigate the process of applying for coverage. The application process may vary depending on the provider, but here are some general steps to guide you:

  1. Gather Employee Information: Collect the necessary information from your employees, such as their names, dates of birth, and contact details. This information will be required when completing the application.
  2. Complete the Application Forms: Fill out the application forms provided by the health insurance provider. Ensure that all information is accurate and up to date. Double-check the forms to avoid any errors or omissions that could delay the application process.
  3. Submit Required Documents: Some insurance providers may require additional documents, such as proof of employment or identification. Compile these documents and submit them along with the application forms.
  4. Review and Confirm Coverage Details: Once the application is submitted, review the coverage details provided by the insurance provider. Ensure that the coverage aligns with what was agreed upon during the selection process.
  5. Communicate with Employees: Keep your employees informed throughout the application process. Provide updates on the progress and address any queries or concerns they may have. Open communication will help build trust and ensure a smooth transition to the new health insurance plan.

By following these steps, you can navigate the application process with ease and ensure that your employees have timely access to their health insurance coverage.

Review on a regular basis

Selecting a health insurance plan for your small business is not a one-time decision. It is important to review and reevaluate your plan on a regular basis to ensure that it continues to meet the changing needs of your business and employees.

Set up a schedule to review your health insurance plan annually or biannually. During these reviews, consider the following factors:

  1. Employee Feedback: Gather feedback from your employees regarding their satisfaction with the current health insurance plan. Identify any areas for improvement or potential issues they may have encountered.
  2. Changes in Employee Needs: Assess if there have been any changes in the healthcare needs of your employees. Consider factors such as new hires, retirements, or changes in the demographics of your workforce. Adjust the plan accordingly to ensure that it continues to meet the needs of your employees.
  3. Provider Performance: Evaluate the performance of your health insurance provider. Assess their responsiveness, claim settlement process, and the overall quality of service provided. If you are dissatisfied with the provider, consider exploring alternative options.
  4. Cost Analysis: Review the costs associated with the health insurance plan. Determine if there have been any significant premium increases or changes in the coverage. Compare the costs and coverage with other available options to ensure that you are still receiving the best value for your business.

By conducting regular reviews and reevaluating your health insurance plan, you can make necessary adjustments and ensure that your employees continue to receive the best possible coverage.


Choosing the right health insurance plan for your business lets you provide a great benefit to your employees but it needs to be planned carefully to ensure it’s what they need and what your business can afford.

Remember to assess the specific needs of your employees and involve them in the decision-making process. By tailoring the health insurance plan to their needs, you can provide them with the best possible coverage and contribute to their overall well-being.

Regularly review your health insurance plan to ensure that it continues to meet the changing needs of your business and employees. By staying informed and proactive, you can provide your employees with the peace of mind and support they deserve.

Written by

Anna Thornhill
Anna Thornhill
Anna Thornhill is one of our expert writers. Anna is our specialist editor covering business growth and marketing and makes it her mission to provide small business owners with practical guides that help you step-by-step to grow your business. Anna’s an experienced sales and marketing professional who moved to writing and editorial and helps startups and small business owners with practical advice in growing their business with the latest sales and marketing techniques plus guides to choosing and using sales and marketing technology.

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