How does corporate health insurance work?

What is corporate health insurance?

Corporate health insurance is a type of business health insurance taken out by an employer. It covers the cost of private treatment for eligible employees with acute medical conditions.

An acute condition is an illness or injury that is likely to respond quickly to treatment. Cover is usually for conditions that arise after the policy starts, depending on how the policy is underwritten.

What is the difference between corporate and small business health insurance?

Corporate health insurance is a term often used for larger groups, usually with more than 100 employees. Small business health insurance usually describes cover for companies with fewer than 100 employees.

With larger groups, insurers may be more flexible on cover and underwriting. The premium per member may also work out lower, because the cost is spread across more people. Both types of cover provide similar benefits to employees and employers.

Read more in our guide to small business health insurance.

How does corporate health insurance work?

Corporate health insurance is a contract between the company and the insurer, with the employees as the people who use it. Many employers offer it as part of a benefits package.

It can help attract new people to the business and support employees when they are unwell. For employees, it means they may be able to get private treatment without waiting for an NHS referral, subject to the terms of the policy.

Employees may also have more say in their treatment, depending on the cover chosen. Knowing their physical and mental wellbeing is supported can help them feel valued at work.

What are the benefits of corporate health insurance?

Providing health insurance for employees is not a legal requirement. However, it can bring short-term and long-term value to the employer and the employee.

Benefits for employers

• Less sickness absence: access to private healthcare may mean faster diagnosis and treatment.
• Productivity and retention: showing employees their health is cared for can build trust and loyalty.
• Returning to work sooner: eligible employees may be treated sooner, so they can get back to work.
• Flexibility: employers can usually tailor the scheme to fit their business and budget.
• Family cover: if employees can add family members, it may reduce time off to care for them.

Sickness absence has a real cost. The Office for National Statistics estimates that 148.8 million working days were lost to sickness or injury in the UK in 2025.

Benefits for employees

• Quicker access to treatment: eligible employees can arrange private treatment without waiting for an NHS referral.
• Help with medical costs: the insurer pays for eligible treatment, subject to the policy terms and any excess.
• More privacy: private hospitals can often offer a private room with its own facilities.
• More choice: employees may be able to choose the hospital, specialist and treatment date, depending on the cover.
• Cover for family: a scheme that includes partners and children can ease the pressure if they become unwell.

How much does corporate health insurance cost?

The cost depends on several factors. These include the level of cover and benefits in the plan, the number of employees covered and their average age.

Read more about what affects the cost of health insurance.

How does corporate health insurance compare with individual health insurance?

Both are types of private medical insurance, but they are set up in different ways.

• Who chooses the cover: the employer for corporate cover, and the policyholder for individual cover.
• Who is covered: employees, and sometimes their families, or the individual and their family.
• Who pays the premium: usually the employer, or the individual policyholder.
• Who can claim: anyone covered by the policy.
• Who can change the policy: the employer, or the individual policyholder.

Read more in our guide to individual vs group health insurance.

Is health insurance a business expense?

The employer usually pays the full premium for a corporate scheme. This includes Insurance Premium Tax, which is a tax on general insurance premiums.

If the scheme also covers employees' families, the cost of their cover may be shared with employees. This depends on how the scheme is set up.

Employer-paid health insurance is usually a taxable benefit in kind. The employer reports it on form P11D and pays Class 1A National Insurance on its value, according to HM Revenue and Customs. Speak to your accountant about your own circumstances.

Looking for corporate health insurance?

Freedom Health Insurance offers group schemes on Freedom Elite from two employees and on Freedom Worldwide from three. If you already have a scheme in place, you may be able to switch to us.

Group schemes are arranged through an intermediary. Provided they have a Terms of Business Agreement in place with Freedom Health Insurance, they can request a quotation from us on your behalf. You can also contact us, or read more about our group health insurance.

Freedom Health Insurance cannot give advice on which cover is right for your business. For independent advice, and to compare different providers, speak to an intermediary.