Company medical insurance was cited by a recent Drewberry survey of 1,000 SME workers as the top paid-for employee benefit. Nearly one third of SME employees (31.3pc) said they wanted private medical cover.
However, only 12.6pc of SME workers are actually offered private medical insurance.
Given that retaining key staff is the number one issue facing small business owners, is it time your SME offered private medical insurance?
How will business medical cover help my small business?
Small businesses may need to improve benefits if they’re looking to hire new staff. The bigger the company, the more likely they are to offer employee benefits in the arms race to attract top talent.
According to the Investors in People employee sentiment poll in 2017, 15pc of employees looking for employment elsewhere do so because of the lack of benefits offered by their current employer.
Forty-four per cent of employees consider employee benefits to be one of the most important qualities that they look for in a new employer.
Another question you need to ask is can you afford not to offer private medical insurance?
In 2016, an estimated 137 million UK working days were lost due to sickness.
One in 10 people waiting for NHS hospital treatment have to wait for more than 18 weeks. If your employee has been signed off work because of a debilitating illness, can you afford them to be missing for more than four months?
In bigger companies, the absent employee’s workload can be spread between co-workers but that’s not always the case with small firms.
Ensuring the workforce of a small business is healthy and can access treatment as quickly as possible should they need treatment can make all the difference when it comes to delivering business as usual.
What does business medical cover include?
Business medical cover is designed to cover the cost of medical care to help speed up the diagnosis, treatment and recovery of an acute medical condition, which might include:
- Scans and tests
- Surgical procedures
- Exclusive drugs
- Alternative therapies
- Hospital stays
An example of an acute condition – defined as a condition that can be reversed with medical treatment – would be the need for a hip replacement, which can be solved by replacing the joint.
What other perks does business medical cover offer?
Depending on the level of cover, add-ons you could add to your business medical cover include:
- Private room
- Flexible visiting hours
- Shorter waiting times for treatment
- Flexible appointment times that can be tailored to suit your employee’s schedule
- Choice of consultants and specialists related to the medical issue.
Do I need to offer outpatient treatment as well?
All business medical cover offers inpatient and day-patiet hospital treatment. Inpatient treatment requires an overnight stay whereas day-patient treatment might include minor surgery such as cataracts or a hernia.
For an additional premium you can also add outpatient treatment to your policy. This covers the cost of care where a hospital bed is not required, such as for x-rays, consultations and scans.
The actual level of outpatient cover can be set by you, the small business owner. It could be up to a cash ceiling (often £1,000 per year) or cover outpatient treatment in full. Naturally, the more outpatient cover you offer employees, the higher your premiums.
How much does business medical cover cost?
The cost of your policy will depend on a range of factors, some of which you will be able to control while others you won’t:
- The number of employees you want to insure
- The level of cover
- Average age of the group
- Your geographical location
- Your industry and occupation
- Optional cover ‘add-ons’
Getting an accurate quote for a business medical cover by yourself is no easy feat. There are so many policy options and details around your business that can influence the cost of your policy.
Per employee, Dewberry tells small business customers to broadly speaking expect policies to cost around £55 per month if your company has fewer than 10 employees, £35 if you have more than 50 employees, and £30 if your medium-sized business has more than 100 staff. The average age of the workforce also has a big impact on the premiums.
How is business medical cover taxed?
As a business owner, it is normal to cover the cost of a business health insurance policy out of pre-tax profit. HMRC sees this as a business expense and so not liable for corporation tax.
However, for the employee BMC is a P11D or benefit in kind. As an employer, you will need to complete a P11D form to declare to HMRC any benefits given to employees or directors. The employee pays tax on the benefit by having their personal allowance adjusted.
How to apply for a BMC scheme
First, decide what you want your policy to achieve including:
- Number of employees you would like to cover
- Rough budget per employee
- Core policy options you want included
- Level of outpatient cover
- Nice-to-have add-ons such as dental cover, if budget allows
Second, compare quotes from leading UK insurers. Because you need to input so much more information when comparing private medical insurance, you cannot do it through a normal insurance aggregator such as Compare the Market or GoCompare. You will need to harvest specific information about each employee, including age, gender and primary work location.
Given the amount of time involved, you may want to use a specialist insurance broker, like Drewberry Insurance, to advise you on your policy options and compare quotes on your behalf.