Private medical insurance (PMI) plays an important role in the private healthcare sector, with the majority of procedures paid for using this method. In today's competitive job market, companies are always on the lookout for ways to attract and retain employees. One way that they are doing this is by offering company-funded PMI schemes. In this article, I explore what these healthcare policies are, how they work, and the benefits that they offer for businesses and their employees.
About company-funded health insurance schemes
Company-funded PMI schemes are plans that are provided and paid for by an employer. They are offered as part of an employee's benefits package, and typically cover a range of medical conditions, and can include GP consultations and prescriptions and access to and treatment at private hospitals.
Depending on the provider, ‘health’ insurance may be broader than ‘medical’ insurance, i.e. health might cover aspects such as health promotion and preventative treatments, whereas medical is more about medical interventions when they are necessary. In this article I use both terms interchangeably, but it’s worth checking with your insurer/employer to make sure you know what’s on offer.
For instance you may be interested to know if the health insurance policy covers acute conditions, cancer cover, mental health and physiotherapy, as well as inpatient or outpatient treatment. There may be exclusions to the level of cover, including chronic conditions or pre-existing conditions, that you need to be aware of before committing to a private health insurance policy.
How do they work?
Under a company-funded health insurance scheme, the employer pays a premium to a health insurance provider on behalf of their employees. In return, the insurance provider covers the cost of any medical treatment needed by the employees according to the terms and conditions of the plan.
Employees may be required to pay a portion of the premium and other expenses. This is often deducted directly from their monthly salary.
Key benefits of company-funded health insurance schemes for businesses
- Improved employee retention and loyalty: Offering company-funded health insurance plans is a great way to attract and retain top talent. It shows that the employer values the health and well-being of their employees and is willing to invest in their welfare.
- Better employee health and productivity: Employees who have access to health insurance cover are more likely to seek medical attention when needed, which can help prevent serious health problems from developing. They may benefit from reduced waiting times and be able to return to work more quickly. This can lead to a more productive workforce, as employees are healthier and better able to perform their jobs.
- Cost savings: Companies can negotiate better rates with insurance providers by purchasing insurance in bulk, which can lead to cost savings. Additionally, when employees have access to health insurance cover, they are less likely to miss work due to illness, which can reduce the cost of absenteeism and lost productivity.
Key benefits of company-funded PMI insurance schemes for employees
- The key benefit for employees is access to private medical insurance at a much-reduced rate. This can help reduce worry and improve both mental and physical health.
- Company-funded PMI can often be extended not just to the employee, but also (usually at a cost, but with discounts) to family members.
There are different forms of company-funded health insurance schemes, including corporate health insurance or small business health insurance. Each is a great way for employers to attract and retain top talent, improve employee health and productivity, while achieving cost savings. There are many providers offering healthcare plans and we recommend shopping around including perhaps using an insurance broker.
If you are an employer, it is worth considering offering a health insurance plan as part of your employee benefits package.
If you are an employee, we’d recommend you consider using any health insurance benefits that your employer offers. Private healthcare doesn’t replace the NHS, but your health is an important investment, and having speedy access to quality care can make a big difference in your life.
