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How Does Corporate Health Insurance Work?

  • Sep 01, 2022
  • Health Insurance

Corporate meeting about health insurance

With rising pressure on the NHS, and growing demand for physical and mental wellbeing support, employers have an opportunity to create an attractive rewards package which could deliver long-term benefits for both the employees and the business. According to a recent report published by Engage Health in partnership with Hooray Health & Protection, one of the most desired benefits in the workplace is private health insurance. But what is private health insurance and how can it help your corporate business?

What is corporate health insurance?

Corporate health insurance is a type of business health insurance taken out by an employer to cover the medical bills of its employees when they receive private treatment for acute medical conditions which arise after the policy’s start date.

What’s the difference between corporate health insurance and small business health insurance?

Corporate health insurance is generally designed to cover groups with more than 100 employees compared to small and medium business health insurance which would cover companies with less than 100 employees.

With corporate groups being larger, health insurance providers might be more flexible when it comes to coverage and underwriting, and the premium per member could work out cheaper because the cost is spread out between more members. However, both corporate health insurance and small business health insurance provide similar benefits to employees and employers.

How does corporate health insurance work?

Corporate health insurance is a contract between the company and the health insurance provider, with the employee being the end user. Corporate health insurance can be part of the company’s benefits package to help attract new talent, reduce sickness absence, and increase motivation, productivity, and loyalty in employees. Consequently, private medical insurance can have a positive impact on a business’ bottom line.

For the employees, having access to health insurance through their employer means they can access private healthcare when they need it without having to wait for the NHS and their eligible medical bills are covered. They would also have more control over their treatments and feel more valued within their role knowing their physical and mental wellbeing are being supported.

Corporate health insurance benefits

Providing corporate health insurance for your employees is not a legal requirement. However, the benefits of business health insurance can bring both short-term and long-term value to the employer and the employee. Some benefits include:

Employer benefits

Employee benefits

Reduced sickness absence

When employers give their employees access to private healthcare it could mean faster diagnosis and treatment and reduced sickness absence.

Reduced waiting times for treatment

Employees can skip NHS waiting lists and get quicker access to treatment through private healthcare.

Improved productivity and retention

Showing employees that their health and wellbeing is well cared for can improve their trust in the company and make them more productive and loyal.

Protection from high medical costs

With corporate health insurance, the health insurance provider takes care of the employees’ hospital bills when they make an eligible claim, giving them more financial security.

Return to work sooner

If an employee requires medical treatment for an eligible illness, private hospitals generally have shorter waiting lists than the NHS so employees can return to work sooner

More privacy when receiving treatment

Getting treatment in a private hospital can often mean having a private room and facilities such as ensuite bathroom, TV, and meals.



Corporate health insurance providers will usually offer employers the choice to customise their plan to make it fit their business goals and budget.



More control over your healthcare

When using private healthcare, employees can have the option to choose the hospital, specialist and the date and time they wish to receive the treatment, however, this depends on the level of cover that is purchased.


Less absence due to family sickness

Families’ health and wellbeing tends to be a top priority for people, so if employees have the option of adding their family to their cover, they can get faster access to private healthcare and therefore decrease the requirement for compassionate leave.


Cover for partner and dependants

A corporate health insurance that covers the employee’s family too, will provide extra reassurance and release financial pressures should a family member or dependent fall ill.




How much does corporate health insurance cost?

The cost of corporate health insurance can depend on various factors such as the level of cover and benefits included in your plan, the number of employees enrolled and their average age.

Corporate health insurance vs individual health insurance

Corporate health insurance and individual health insurance are both types of private medical insurance but there are some essentials distinctions between the two. Here is a summary of the main differences between corporate health insurance and individual health insurance.


Corporate Health Insurance

Individual Health Insurance

Who applies for cover and decides what benefits to include in the policy?

The employer

The individual (the policyholder)

Who is covered under the policy?

The employees or the employees and their dependents

The individual or the individual and their dependents

Who is responsible of paying the premium?

The employer

The individual (the policyholder)

Who can make claims and benefit from cover?

The employees or the employees and their dependents

The individual or the individual and their dependents

Who can make changes to the policy?

The employer

The individual (the policyholder)


Is health insurance a business expense?

The employer is responsible of paying the total premium of the corporate health insurance policy, including the Insurance Premium Tax (the government levy on insurance premiums). However, if the corporate plan also covers the member’s families (such as partners and children), employers could recover premiums from members. Additionally, members will usually have to pay tax on the cost of their health insurance premium because corporate health insurance is considered a company benefit and it’s not a mandatory requirement.

Are you looking for corporate health insurance?

If you are looking for corporate health insurance for your business, contact us or fill in the contact form on our website and we can offer you a non-obligation quote. You can also switch to us if you already have a PMI in place.


Disclaimer: Freedom Health Insurance can’t offer advice on which cover could be best for your business. To receive independent advice and compare different providers, you could request the services of a health insurance broker.