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Health Insurance
Estimate what your business will pay for private health insurance based on team size, age profile, and level of cover. Premiums typically range from £20 to £150+ per employee each month, before tax.
Business health insurance is priced per employee, then combined into a total monthly premium for your company. As a rough guide, basic inpatient-only cover costs £20-£40 per employee a month, standard cover with some outpatient benefits costs £40-£80, and comprehensive cover with full outpatient and mental health support costs £80-£150+.
The exact figure depends on your employees' ages, where your business is based, the excess you choose, and the hospital list you select. Speaking to an advisor who compares a wide range of providers is the fastest way to get an accurate number for your specific team.
A business health insurance calculation starts with a per-employee premium, which insurers set based on individual risk factors, then combines these into a total scheme cost for your company.
Unlike car or home insurance, there's no single formula you can apply. Insurers price each employee individually based mainly on age and, in some cases, occupation and postcode, then apply a group rate to the overall scheme. The bigger your team, the more insurers can spread risk, which typically brings the per-head price down slightly.
To estimate your own costs, you'll need to know:
Once you have these details, an advisor or provider can give you an accurate business health insurance quote. The estimates in this guide are a starting point for budgeting before you get that figure.
Employers often underestimate how much outpatient cover adds to the total. Moving a team of five from inpatient-only to comprehensive cover can add several hundred pounds a month, so it's worth deciding on this trade-off before requesting quotes.
The table below shows estimated total monthly costs for standard cover (inpatient treatment plus limited outpatient benefits) at different team sizes. These are indicative ranges based on current UK market data and assume a working-age team with no unusual risk factors.
Per-employee costs tend to fall slightly as your headcount grows, because insurers can spread risk across a larger group. A business with 20 employees might see a lower average rate per person than one with five, even before accounting for age differences.
These figures are a guide for budgeting. Your actual quote will depend on your team's age profile, location, and the excess and hospital list you choose.
Get an accurate quote
Tell us your employee numbers, ages, and preferred cover level. We compare a wide range of providers to find options that fit your budget.
The level of cover you choose has the biggest impact on your per-employee premium, more than almost any factor except age. Here's what the typical tiers include.
Basic (inpatient only) covers hospital stays and surgery requiring admission. Employees still use the NHS for consultations, scans, and diagnostic tests.
Standard cover adds a capped amount of outpatient treatment, typically £500-£1,000 per employee a year, covering most routine consultations and tests.
Comprehensive cover removes the outpatient cap and usually includes fuller mental health support, physiotherapy, and other therapies.
Adding some level of outpatient cover is often worth the extra cost. Without it, employees may still face NHS waits for the diagnostic tests needed before private treatment can start, undermining much of the point of having cover at all.
Cost factors
Business health insurance has tax implications for both your company and your employees. Working through the calculation helps you understand the true net cost.
Premiums are usually an allowable business expense, so they reduce your taxable profit. At current corporation tax rates (19% for smaller profits, 25% for larger profits), a company paying £3,000 a year in premiums could reduce its tax bill by roughly £570-£750, though an accountant can confirm the exact rate that applies to your business.
Your company also pays Class 1A National Insurance on the value of the benefit provided to each employee, currently in the region of 13-15% depending on the tax year. This is an additional cost on top of the premium itself, though it's also deductible against corporation tax.
HMRC treats employer-paid health insurance as a benefit in kind, so employees pay income tax on the value of their cover at their marginal rate (20%, 40%, or 45%). For example, an employee on a £1,000 annual premium paying the basic rate would see roughly £200 in additional tax collected through their tax code, spread across the year.
Employees don't pay National Insurance on the benefit, only income tax. You'll need to report the benefit through a P11D form, or via payroll from April 2027 when HMRC moves most benefit reporting onto Real Time Information.
Despite the tax, group cover is often still cheaper overall than an employee arranging equivalent cover individually, which is one reason it remains a valued benefit even with the tax attached.
The tax on this benefit rarely outweighs its value. Group premiums are usually lower than an employee would pay for the same cover individually, so even after National Insurance and income tax, most staff come out ahead.
Underwriting
Once you know roughly what cover will cost, there are several ways to bring the figure down without cutting the benefit entirely.
For general guidance on managing business finances, MoneyHelper provides free, independent information. The Association of British Insurers also publishes data on how UK employers are using workplace health cover, which can be useful context when budgeting.
How it works
Gather your employee details
Collect ages, postcodes, job roles, and whether you want to include family members for each employee you plan to cover.
Decide your cover level and excess
Work out whether inpatient-only, standard, or comprehensive cover suits your budget, and what excess your team could reasonably afford.
Compare quotes from multiple providers
Speak to an advisor who can compare a wide range of providers rather than getting a single quote from one insurer.
Choose your underwriting approach
Pick moratorium, full medical, or medical history disregarded underwriting depending on your group size and how much certainty you want upfront.
Apply and communicate with your team
Once the policy is set up, explain what's covered, the excess employees will pay, and how to make a claim.
Common questions
Typical costs range from £20-£40 per employee a month for basic inpatient-only cover, £40-£80 for standard cover with some outpatient benefits, and £80-£150+ for comprehensive cover. Age, location, excess, and hospital list all affect the exact figure.
Multiply the estimated per-employee premium by your headcount, then add roughly 12% for Insurance Premium Tax if it isn't already included in the quote. Remember your company will also pay Class 1A National Insurance on top of the premium.
Yes, to some extent. Larger groups let insurers spread risk across more people, which can bring the average per-head rate down slightly compared with very small teams. Age profile usually has a bigger effect than headcount alone.
Your business pays Class 1A National Insurance on the value of the benefit, currently in the region of 13-15% depending on the tax year. Employees pay income tax on the premium value at their marginal rate (20%, 40%, or 45%), collected through their tax code.
Yes. Employer premiums are typically deductible against corporation tax. However, employees pay income tax on the benefit, as it's treated as a Benefit-in-Kind.
Choosing basic inpatient-only cover, a higher excess, and a guided hospital network are the main ways to reduce cost. Moratorium underwriting also tends to be cheaper to set up than medical history disregarded options.
Yes, age is usually the single biggest factor in pricing. A workforce with an average age of 50 will typically cost noticeably more to insure than one averaging 30, because older employees are statistically more likely to need treatment.
Many policies let employees add partners and children, usually priced as a multiple of the individual rate, often around double for a partner and more for full family cover. This can be paid by the company or deducted from the employee's pay.
The saving varies by provider, but moving from a £0 excess to £250 or more typically brings a noticeable reduction in premium. The trade-off is that employees pay more out of pocket per claim, so it's worth checking what your team can realistically afford.
Usually, yes. Most policies see annual increases driven by medical inflation, your age, and sometimes your claims history. Reviewing your policy and comparing the market at each renewal, rather than auto-renewing, helps you avoid gradually overpaying.
You don't need one, but working with an advisor who compares a wide range of providers is usually the quickest way to get quotes that reflect your actual employee numbers, ages, and preferred cover level, rather than a single insurer's headline price.
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