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Health Insurance
Medium-sized businesses typically pay £20-£90+ per employee each month for group health insurance, with access to Medical History Disregarded underwriting that covers pre-existing conditions from day one.
Health insurance for a business with 50-249 employees typically costs between £20 and £90+ per employee each month, depending on the level of cover you choose.
At this size, most businesses qualify for Medical History Disregarded underwriting, which means every employee is covered from day one with no health questionnaires or exclusions for pre-existing conditions. Premiums are also a tax-deductible business expense. The exact cost for your business depends on your workforce's age profile, location, chosen hospital list, excess level, and the specific benefits you include.
Compare providers
We compare cover across Bupa, Aviva, AXA Health, Vitality, and other providers to find options that match your workforce and your budget.
Your business has grown beyond the startup phase, but you're not yet a corporate giant. This in-between stage creates specific health insurance challenges that standard policies don't address.
At this size, you're in an interesting position. You're large enough to qualify for favourable group rates and better underwriting terms, but small enough that every employee matters. When a key team member is off sick for months waiting for NHS treatment, you feel it across the whole organisation.
Research from the Office for National Statistics shows that 185.6 million working days were lost to sickness or injury in 2022, the highest figure on record. For a 100-person business, that translates to roughly 370 days of lost productivity each year on average. Even a small reduction in absence can deliver meaningful savings.
Medium-sized businesses face challenges that smaller and larger companies don't.
Recruitment competition: you're competing for talent against corporations with extensive benefits packages. Research from the Department for Work and Pensions suggests around 70% of SMEs now provide at least one wellbeing scheme, making health insurance increasingly expected rather than exceptional.
Key person dependency: unlike corporates with deep benches, losing a department head or specialist to long-term sickness creates immediate operational problems. You can't simply redistribute their work across a large team.
Budget constraints: you need comprehensive cover without unlimited resources. Every pound spent on premiums needs to deliver tangible value, whether through reduced absence, better retention, or improved recruitment.
Administrative complexity: managing benefits for 50+ people requires proper systems. You need insurers who provide efficient admin tools and dedicated account management, not call centre queues.
The businesses that get the most value from health insurance treat it as a retention and continuity tool, not just a perk. A single key person avoiding a three-month wait for treatment can preserve more value than the entire year's premium costs.
Group health insurance, also called private medical insurance (PMI), is a policy your company takes out to give employees access to private healthcare. Here's what you need to know about how it actually works.
When an employee develops a health issue that needs treatment, they contact the insurer directly rather than going through you. This keeps their medical information confidential while still giving them access to private care.
Most policies follow a similar pattern:
The key point: standard health insurance covers acute conditions, illnesses and injuries that respond to treatment and lead to recovery. Think hernias, joint replacements, cataracts, or investigations for new symptoms.
Important limitations: pre-existing conditions (health issues you already had before joining the policy) and chronic conditions (ongoing illnesses requiring long-term management like diabetes or asthma) are typically not covered under standard terms.
Every policy is built from core cover, with optional modules layered on top based on what your employees need.
What's covered
You then add modules based on what your employees need most:
Underwriting determines how the insurer handles employees' existing health conditions. At 50-249 employees, you have access to better options than smaller businesses typically get.
Underwriting
For medium-sized businesses, Medical History Disregarded underwriting is often the most practical choice, especially when managing a diverse workforce where gathering individual health details isn't realistic.
Now let's talk real numbers. Your costs will depend on several factors, but here's what businesses your size typically pay.
Based on current market data from multiple UK insurers:
For a business with 100 employees, that works out at roughly £24,000-£42,000 a year for basic cover, £48,000-£72,000 for mid-range cover, or £78,000-£108,000+ for comprehensive cover.
These figures assume employees outside London, an average workforce age of 35-45, and standard hospital lists. Your actual quote will vary based on your specific circumstances.
Workforce age: age is the single biggest factor in pricing. A workforce with an average age of 28 will pay significantly less than one averaging 52, as older employees statistically make more claims.
Location: London and the South East have higher hospital and consultant fees. If your workforce is mainly London-based, expect premiums 15-25% higher than elsewhere in the UK.
Hospital list: insurers offer different networks. A London hospitals list, including premium central London facilities, costs more than a regional list. Many businesses exclude London hospitals for employees based elsewhere to manage costs.
Excess level: the amount employees contribute towards claims. A £0 excess means the insurer pays everything; a £250 or £500 excess reduces premiums by roughly 10-20% but means employees pay the first portion of treatment costs.
Cover level: each optional module adds to your base premium. Adding full out-patient cover to a basic policy might increase costs by 30-40%.
Take a 100-person engineering firm in Birmingham with an average workforce age of 38.
Mid-range policy including:
Estimated annual cost: £52,000-£58,000, or roughly £43-£48 per employee monthly.
Cost-saving options for the same business:
One often overlooked benefit: health insurance premiums qualify for Corporation Tax relief. Here's how the tax treatment works.
Corporation Tax deduction: the full cost of premiums is treated as an allowable business expense, reducing your taxable profit by the same amount. For example, a £50,000 annual premium spend reduces your taxable profit by £50,000, which at the current 25% Corporation Tax rate works out at a £12,500 tax saving.
No employer National Insurance: unlike salary payments, there's no employer NI contribution on health insurance premiums.
Class 1A National Insurance: you do pay Class 1A NI (currently 13.8%) on the total benefit value at year-end, reported through your P11D submissions.
Benefit in kind: health insurance is a taxable benefit. The premium value is added to each employee's taxable income.
Income tax: employees pay income tax at their usual rate on the benefit value. For example, a basic rate taxpayer receiving £600 worth of cover annually would pay around £120 extra tax, while a higher rate taxpayer would pay around £240.
No employee NI: employees don't pay National Insurance on the benefit, which provides some relief.
For example, if your company pays a £600 annual premium for an employee's cover: the company saves around £150 in Corporation Tax (25% of £600) and pays around £83 in Class 1A NI (13.8% of £600), for a net company cost of roughly £533. The employee receives £600 of cover for around £120 in extra income tax, with no extra National Insurance. Both sides get value from the arrangement.
We work with all major UK health insurers. Based on our experience arranging cover for businesses with 50-249 employees, here are the providers that consistently perform well.
Bupa has focused exclusively on healthcare since 1947. With no shareholders, they reinvest profits into services, and it shows in their hospital network and claims handling.
Typically sits at the premium end of pricing, but the comprehensive cover can justify the investment for businesses prioritising quality.
As the UK's largest general insurer, Aviva brings scale and competitive pricing to health insurance.
Typically priced 10-20% below Bupa and AXA Health for comparable cover levels.
AXA Health has invested heavily in mental health services and digital-first delivery.
Sits in the mid-market on price, and competitive when mental health support is a priority.
Vitality takes a different approach, rewarding healthy behaviours with discounts and perks.
Competitive base rates, with effective premiums that can reduce over time for engaged employees.
Understanding the current state of NHS services helps explain why private health insurance has become increasingly valuable.
According to the BMA's analysis of NHS England data for November 2025:
The government's target is for 65% of patients to meet the 18-week standard by March 2026, still well below the 92% target that hasn't been met since 2016.
Musculoskeletal problems: common issues like back pain, knee problems, or shoulder injuries often require scans and specialist consultations. NHS waits for an initial MRI can exceed 8-12 weeks in many areas, followed by further waits for consultant appointments and treatment.
Mental health: NHS mental health services are under extreme pressure. Even urgent referrals can face months-long waits for therapy, while an employee struggling with anxiety or depression may be unable to perform effectively at work.
Cancer concerns: while urgent cancer referrals have improved, the stress and uncertainty of waiting for diagnostic tests still affects employees and their families.
Routine surgery: joint replacements, hernia repairs, and similar procedures that dramatically improve quality of life often face the longest waits.
A simple calculation: if just one key employee avoids a three-month absence by accessing private treatment within weeks rather than waiting months on the NHS, the productivity preserved is likely to exceed the annual premium cost for that employee.
Beyond direct absence, consider presenteeism: employees attending work while unwell or anxious about health issues and performing below their capability. Faster diagnosis and treatment addresses this too.
We compare cover across Bupa, Aviva, AXA Health, Vitality, and other providers to find what works for your team.
The process of implementing group health insurance for 50-249 employees follows a logical sequence. Here's what to expect.
Before approaching providers, it helps to understand your starting position.
Demographics: what's your workforce age profile? Are employees concentrated in one location or spread across the UK? Do you have London-based staff who need access to London hospitals?
Existing benefits: do you currently offer any health-related benefits? Cash plans, employee assistance programmes, or gym memberships might integrate with or complement health insurance.
Budget parameters: what can you realistically afford? As a general guide, expect to budget £500-£900 per employee annually for comprehensive cover.
Priority areas: what health issues most affect your workforce? A manufacturing business might prioritise musculoskeletal cover; a professional services firm might focus on mental health support.
Working with a broker means you get quotes from multiple insurers based on your specific requirements. This typically involves:
For a business with 100 employees, expect the quote process to take 2-3 weeks from providing initial information to receiving detailed proposals.
Employee communication: announce the new benefit clearly. Employees need to understand what's covered, how to access services, and any costs to them, such as excess payments or tax implications.
Enrolment: most insurers provide online portals for adding employees. With Medical History Disregarded underwriting, this is straightforward, with no individual health questionnaires needed.
Policy documentation: make sure HR has full policy details to answer employee questions.
Launch support: good insurers provide materials for internal communications, including posters, emails, and FAQ documents.
Group health insurance isn't something you set up once and forget.
Monthly starters and leavers: update the insurer as your headcount changes. Most policies adjust premiums based on actual employee numbers.
Annual renewal: premiums are reviewed annually. Claims experience affects renewal pricing, so expect increases if your workforce has made substantial claims.
Benefit review: as your business evolves, so should your cover. Annual reviews with your broker help ensure the policy still matches your needs.
Common mistakes
Based on experience arranging cover for businesses your size, these are the errors we see most often.
Choosing on price alone
The cheapest quote isn't always the best value. A policy with a restricted hospital list, limited mental health cover, or slow claims processing can cost more in employee frustration than the premium savings justify. Compare like-for-like, check what's included and excluded, and weigh service quality alongside cost.
Ignoring the claims process
When an employee is unwell, they need access to care quickly. Some insurers make claiming straightforward; others create obstacles, and a painful claims experience undermines the entire benefit. Ask about average claims turnaround times and whether there's a dedicated line for your business.
Not communicating the benefit properly
Providing health insurance without explaining it leads to low take-up and poor perceived value. Invest time in launch communications, run Q&A sessions, and remind employees regularly about what's available.
Overlooking family cover options
Many employees value the option to add partners and children to their cover, even if the business doesn't pay for dependants. Ask providers about flexible options that let employees upgrade or add family members at their own cost.
Not reviewing annually
Business needs change: a policy that suited 60 employees might not suit 150, and an insurer that once delivered great service might have slipped. Schedule annual reviews with your broker, benchmark against the market, and check terms still meet your needs.
Health insurance isn't the only option for supporting employee health. Understanding the alternatives helps you design a complete benefits package.
Cash plans are simpler and cheaper than full health insurance. Employees claim back set amounts for routine health costs, typically dental check-ups, eye tests, physiotherapy sessions, and prescriptions.
Pros: low cost (roughly £5-£15 per employee monthly), easy to understand, and encourages preventative care. Cons: no cover for significant illness or surgery, and maximum claim amounts are modest.
Best for: complementing health insurance, covering routine costs while insurance covers major treatment, or as a standalone benefit when full insurance isn't affordable.
EAPs provide confidential support for personal and work-related issues: counselling, legal advice, financial guidance, and crisis support.
Pros: very affordable (often £3-£8 per employee annually), immediate access to counselling, and cover for the whole household. Cons: a limited number of counselling sessions, and no clinical treatment.
Best for: a foundation of mental health support that complements, but doesn't replace, insurance-based mental health cover.
Standalone digital GP services give employees access to consultations without needing an NHS GP appointment.
Pros: quick access for minor issues, reduces time off for GP visits, and relatively affordable. Cons: no pathway to treatment, and limited to advice and prescriptions.
Best for: businesses not ready for full health insurance but wanting to reduce time lost to GP appointments. Note that most health insurance policies now include digital GP access anyway.
Covers a portion of salary if employees are unable to work due to illness or injury for extended periods.
Pros: provides financial security during serious illness, and complements health insurance. Cons: additional cost, and benefits only start after a waiting period, often 13-26 weeks.
Best for: combining with health insurance: insurance helps employees recover quickly, while income protection provides security for longer-term illness.
Independent guidance on health cover and insurance regulation.
How we help
Common questions
Yes, but with conditions. Insurers typically require a clear, objective eligibility criterion. You can't cherry-pick individuals, but you can cover all employees, all full-time employees, all employees with over one year's service, all employees at certain grades, or all employees in specific roles. Whatever rule you choose must apply consistently.
Generally, no. While you can mandate enrolment, most businesses make it automatic with an opt-out provision. Given that health insurance is a taxable benefit, some employees, particularly those on lower incomes, may prefer to opt out. With Medical History Disregarded underwriting, high acceptance rates are usually not a requirement for maintaining favourable terms.
When employees leave, they're typically removed from your policy and your premium is recalculated. Most insurers allow leavers to switch to an individual policy without new medical underwriting, so they don't lose cover. Check your specific policy terms.
Contractors outside IR35 are self-employed and typically can't join your group scheme. Those inside IR35 may be includable depending on your contract terms and the insurer's rules. Temporary employees can usually be included once they meet your eligibility criteria.
With Medical History Disregarded underwriting, typically available at 50+ employees, pre-existing conditions are covered from day one. With moratorium underwriting, they're excluded for the first two years but become covered if symptom-free for two continuous years. Full medical underwriting results in specific exclusions noted upfront.
The excess is the amount employees pay towards their treatment before insurance kicks in. A £100 excess means the employee pays the first £100 of any claim. Most policies apply the excess per employee per policy year, so once it's met, no further excess applies that year regardless of how many claims are made.
Yes, this is common. Many businesses provide enhanced cover for senior managers or long-serving employees. The key is consistency: the same cover level must apply to all employees meeting the same criteria.
Health insurance pays for private medical treatment directly. Cash plans reimburse employees for everyday health costs like dental check-ups, eye tests, or physiotherapy up to set limits. They complement each other: insurance for significant health issues, cash plans for routine costs.
High claims experience typically leads to higher renewal premiums. Insurers look at your claims ratio: claims paid versus premiums paid. Individual large claims, such as cancer treatment, are often excluded from this calculation as they're unpredictable. A pattern of many smaller claims is more likely to affect renewal pricing.
Most group policies require at least 2-3 employees. At 50-249 employees, you comfortably exceed minimums and qualify for better terms than smaller groups.
Usually yes, either as company-paid dependants or as employee-funded additions. Dependant premiums vary by age and number of children. Some policies offer free child cover when both partners are insured.
Most policies flex with your employee numbers. If you grow beyond 249 employees, you'd typically move to corporate terms, which may offer better pricing. If you shrink below thresholds for certain features, your broker should advise on the implications.
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Health Insurance
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