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Small business employee health insurance: a buyer’s guide

Considering getting an employee health insurance plan for your team? Get started with our small business employee health insurance buyer’s guide.

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What is small business employee health insurance?What does health insurance for small companies include?How small business employee health insurance worksAlternatives to employee health insurance plans

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  • Small business employee health insurance is a healthcare benefit for companies with 2-250 employees that gives everyone access to private healthcare.
  • Different providers of health insurance for small businesses will offer varying levels of cover, but in general can include 24/7 GP access, musculoskeletal treatment, cancer care, mental health support, and treatment as an inpatient, outpatient or day-patient. 
  • Employee health insurance plans exclude chronic and pre-existing conditions, such as diabetes, angina, asthma, and mental health conditions.
  • Employees take more days off due to mental health than any other reason: if that’s the problem facing your team, consider investing your money in a focused mental health solution.
  • Spill specialises in providing effective, affordable therapy to employees — there are no waiting lists, no callbacks, and no exclusions, just instant, all-inclusive access to therapy.

The overstretched NHS has dominated the news in recent months (and years) and with over 7.5 million people waiting for treatment (3 million of whom have been waiting for over 18 weeks). And the problem isn’t going away anytime soon: the British Medical Association suggests that even if the NHS were to run at 110% of its pre-COVID capacity, it would still take five years for the waiting list to return to pre-2019 levels…and a further five to return to manageable levels.

As a result, employee health insurance plans have become a default healthcare benefit for companies of all sizes looking to support their team’s wellbeing. But for small businesses, employee health insurance can be an expensive perk. Especially if its not solving the problem the team is facing.

Our small business employee health insurance buyer's guide is designed to help you understand the ins and outs of health insurance for small businesses. We'll look at what is (and isn't) included in employee healthcare plans, how it works (in the UK), and the alternatives to health insurance for small businesses. Let's get started!

What is small business employee health insurance?

Small business employee health insurance is an insurance benefit that gives your employees access to private healthcare, from diagnosis to treatment. A company needs to have at least two employees to get an employee health insurance plan and if you have fewer than 250 employees, you can get small business employee health insurance.

Small business employee health insurance is a type of insurance that you can give to your employees through the company as part of your overall employee benefits package. Much like an individual health insurance policy, it pays for a large portion of the cost of private healthcare, from diagnosis to treatment.

In the UK, this means workers with an employee health insurance plan can bypass the NHS to benefit from faster, private treatment when they need it.

To be eligible for an employee health insurance plan, a company needs to have at least two employees. Generally, the larger the company size, the cheaper business health cover will be. To qualify for small business health insurance, a company must have fewer than 250 employees and many providers now offer employee health insurance plans for such companies.

Cost is a significant factor when it comes to small business employee health insurance and while it might seem financially sensible to opt for a more budget-friendly plan (i.e. a lower cost per employee), it's important to take note ofthe small print: in many cases, the cheapest health insurance for small companies simply means your plan won’t include a lot of the actually useful treatment costs. 

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Make sure you're asking the right questions when buying an employee health insurance plan (or weighing up the one you already have)

What does health insurance for small companies include?

Small business employee health insurance can include 24/7 GP access, musculoskeletal treatment, cancer care, mental health support, and treatment as an inpatient, outpatient, or day-patient, but the specific cover will vary depending on the provider. Most employee health insurance plans offer a core level of care with optional add-ons to help tailor your plan for your team’s needs.

Employee health insurance plans vary substantially in terms of what they cover. But one thing’s for sure: the more comprehensive the cover, the more expensive it will be.

In general, the well-known providers tend to have a core offering that you can then customise depending on the ‘needs of your business and employees’. What this really means is that a lot of the treatment costs your employees will really benefit from are only available as an optional add-on. And that means a higher cost per employee.

To give you an idea of what private healthcare costs are covered and what’s an optional add-on for small business employee health insurance, here’s a summary* of the core coverage with four of the biggest health insurance providers in the UK. All of these summaries are for each provider’s small business health insurance plan, which means companies with 1-249 employees.

*It goes without saying that this is a very brief overview: every single provider will have its own small print (some of which we’ll get to later), so please do take the time to do your own research.

Bupa small business employee health insurance

Bupa offers four levels of cover, all of which include (to varying degrees):

👉 Access to the Bupa network of hospitals, clinics, and treatment centres

👉 Outpatient consultations and diagnostic tests, such as X-rays and blood tests

👉 Outpatient acupuncture, chiropractic, and osteopathy treatment

👉 Outpatient MRI, CT, and PET scans

👉 Day-patient, inpatient treatment, and outpatient surgery

👉 Cancer cover

👉 Mental health day-patient and inpatient treatment

👉 24/7 access to virtual GP appointments

AXA Health small business employee health insurance

Every cover option with AXA Health includes:

👉 24/7 access to phone and video GP appointments

👉 Muscles, bones, and joints support over the phone or online, without needing a GP referral

👉 Telephone support for heart and cancer care

👉 24/7 access to a health information phone line

👉 Wellbeing incentives, like discounts on gym memberships

AXA Health then offers a range of optional extras including cover for hospital procedures and operations, a cash-back option for dental and optical care, treatment by an osteopath, physiotherapist, acupuncturist, homoeopath, or chiropractor, mental health support without a GP referral, and more.

Aviva business employee health insurance

Aviva offers a health insurance plan called Solutions:

👉 Treatment for short-term illness or injury

👉 Cancer cover

👉 Consultations, diagnostic tests like X-rays and blood tests, specialist appointments, and hospital stays

👉 Treatment for back, neck, muscle, or joint pain

👉 Talking therapy and counselling without a GP referral

Aviva then offers additional benefits to increase your cover including dental and optical cover, a mental health upgrade, and routine or GP referred services like tests for chronic conditions or radiology, pathology and therapies for non-musculoskeletal conditions

Vitality business employee health insurance

Vitality’s core cover includes:

👉 Virtual and in-person GP appointments

👉 Mental health support with access to Headspace and Togetherall, and eight sessions of counselling

👉 Hospital, consultation, and test fees for day-patient and inpatient treatment

👉 Outpatient surgery

👉 Up to six weeks of physiotherapy

👉 Cancer care

Vitality’s optional add-ons include outpatient cover for scans, tests, and appointments, upgraded mental health cover, an employee assistance programme, optical, dental, and hearing cover, emergency overseas cover, and more.

It varies a lot doesn’t it? And there’s even more when you look into the small print of what each cost actually includes. 

What isn’t included in small business employee health insurance?

Arguably the more important detail, knowing what isn’t included in your potential employee health insurance plan is essential: the point of providing this benefit is to care for your team and if your plan doesn’t include the treatment they need, it somewhat defeats the point. 

Bupa very helpfully lists out a whole stream of things that are excluded from its small business health insurance plan (ageing, A&E treatment, deafness, fertility, and allergies to name a few), but let’s take a general view for a moment. 

Employee health insurance plans exist to support your team for acute medical conditions. And by acute, we mean conditions that are short-term and come on suddenly. 

This means that small business employee health insurance plans exclude a lot of conditions because they’re either:

  • A chronic health problem, which requires ongoing management and cannot be cured, such as diabetes, asthma, and angina.
  • A pre-existing condition, which is any illness or symptom that an employee has been to see their doctor about in a specified number of years (some say three years, others say five) before joining a health insurance plan. And yes, pre-existing conditions do also include chronic conditions. And mental health conditions.

Side note: employee health insurance plans also tend to exclude treatment for addiction, cosmetic procedures, and pregnancy and maternity cover.

What does this mean?

Well, for many people, these two exclusions have a big impact — when they need support, they can’t get it. 

Consider an employee with a history of depression. If their symptoms returned within this time period (and it’s likely — a study in Behaviour Research and Therapy found that half of people will experience a depression relapse within a year), they wouldn’t be able to get the help they need to navigate their emotional pain. And by not getting vital support, that particular member of your team will likely experience a more severe downturn in their mental health.

Spill surveys the wellbeing of your team every week with a team meeting integration and then gets mental health support to those in need.

See how Spill works

How small business employee health insurance works

Full disclaimer: we’re taking a very UK-centric approach to this section.

In the UK, everyone — regardless of their employment status — has access to free healthcare thanks to the publicly-funded NHS. It’s an incredible service that sees 1.3 million people a day.

However, while the NHS is the most widely-used healthcare system in the UK, a growing number of people are choosing to get private treatment to avoid long waiting lists. And that’s where health insurance comes in handy to do the heavy-lifting when it comes to paying the bill.

By setting up an employee health insurance plan for your team, you’ll be giving them access to private healthcare at a fraction of the cost, which they can choose to access in addition to NHS services. We say ‘in addition’ because private healthcare is still growing in the UK: there’s no private provision of emergency ambulances, major A&E services, and few critical care facilities.

How small business employee health insurance works for the company

1. You decide to setup a small business employee health insurance plan for your team of 1-249 employees

You’ll need to decide which employee health insurance provider to go for: be sure to thoroughly research the different providers and their plans as insurance cover varies significantly. 

💡 Spill’s tip: During the research phase, keep a few things in mind: your budget, the needs of your employees, and a thorough understanding of what’s included in each plan will help you make the right choice for your team.

2. Your employees join the employee health insurance plan

Employee health insurance can be a standard company benefit for every employee, available to a few employees, or offered as a voluntary benefit.

💡 Spill’s tip: Before committing to an employee health insurance plan for your team, find out if they really want it: use 121s, company-wide meetings, employee wellbeing surveys, or even just a simple Slack poll to gauge your team’s wellbeing requirements and appetite for health insurance — you might find your money could be better spend on an altogether different kind of benefit.

3. You pay a monthly (or yearly) premium

Small businesses can typically expect to pay between £20 and £100 per month, per employee for small business employee health insurance, but this price heavily depends on the number of employees, the level of cover, and their age and health.

💡 Spill’s tip: If budget is a concern, there are ways to reduce the cost of your premium — read our related article to find out more.

How small business employee health insurance works for employees*

*This seems to be the most common approach for a lot of providers but as always, check the process with the provider you go for as the specific details will vary. 

1. Your employee has a health concern

If a new health problem crops up, your employee will go to their GP for initial advice. This could mean an NHS GP or a private GP available through your employee health insurance plan.

2. Your employee asks for an open referral

If the GP recommends specialist treatment, your employee should ask for an open referral, which will refer them to any consultant with a particular speciality for treatment. It’s different to a usual named GP referral, which is a written letter to a specific specialist in a named hospital or clinic.

3. Your employee calls the employee health insurance provider

As soon as they’ve seen their GP, your employee should call your company’s health insurance provider to check that their problem and proposed treatment is covered. This will ensure they don't pay for treatment that isn’t included in the plan.

4. Your employee gets treatment

If your company's health insurance covers your employee’s health problem, they’ll get treatment. If the specialist recommends more treatment, your employee will need to call the insurance provider again to check it's covered. 

5. Final bills are settled

Once they’re feeling better, the insurance provider and treatment centre (i.e. clinic or hospital) will settle any final bills. Depending on the excess in your employee health insurance plan, your team member may need to pay part of the bill, but most insurance providers will help sort this out. 

Spill’s take on small business employee health insurance

Did you know employees take more days off work due to mental health than anything else? If you’re looking to get the most value for money or have the biggest impact on employee wellbeing overall — like reducing the number of sick days — it might be worth considering a solution that specialises in mental health support.

Here at Spill, we’re all about supporting employee wellbeing. But, what’s important to us is that companies are giving their teams the right support. 

80% of employees would rather have good mental health than a highly-paid job

We came across a statistic offered up by one health insurance provider suggesting that 29% of employees want health insurance, apparently making it the second most popular perk wanted by teams. But what about the 67% of employees who want their companies to help them take care of their stress and anxiety? Or the 80% of employees who would rather have good mental health than a highly-paid job? 

The state of the workforce’s mental health is as widely talked about as the state of the NHS. There’s no doubt we’re in crisis when it comes to workplace mental health and with employees taking more days off work due to stress, anxiety, and depression than anything else, we’d urge you to consider the problem you’re really trying to solve. 

Employees take more days off work for stress, anxiety, and depression than anything else

A lot of small business health insurance providers have started shouting about the quality of their mental health cover because it’s such an important part of not only employee wellbeing, but also company success. Bupa even suggests that they offer ‘the most extensive mental health cover on the market’. That may be the case, but tread carefully: often, mental health options tagged onto employee health insurance plans are little more than a helpline and some online resources. They don’t offer on-demand therapy and they still rely on someone who is struggling actually recognising they need support — the care is not proactive. Be warned too, mental health support via health insurance is still subject to the same limitations and exclusions for pre-existing conditions.

If you’re looking to support the symptoms of mental health challenges on your team, consider putting your money towards a solution that specialises in exactly that.

Alternatives to employee health insurance plans

If you’re undecided on whether small business employee health insurance is the right choice for your team, there are plenty of alternative (and often cheaper) ways to care for their wellbeing. 

Health cash plans

While still a form of health insurance, health cash plans support everyday health needs rather than serious medical conditions. Offering cash back on things like prescription charges, eye care, dental care, and therapy treatments (physiotherapy, osteotherapy, acupuncture, podiatry etc.), health cash plans can help you care for your team’s routine medical care.

Employee assistance programmes (EAPs)

Increasingly offered as part of business health insurance policies, EAPs are also available as a separate benefit, too. With the aim of supporting employees through mental health challenges, life events, and legal issues, EAPs are a service paid for by the company to give employees access to short-term counselling and other professional guidance. The cost per employee is low (for large companies at least), but so is usage: if you’re looking for mental health support, we’d recommend taking a look at a platform like Spill, which specialises in therapy.

Group income protection

Another form of insurance, group income protection goes above and beyond statutory sick pay, which currently stands at £109.40 a week for up to 28 weeks. If one of your employees becomes ill, group income protection means they’ll get a monthly payment (that’s usually up to 75% of their salary) and it can often last for longer than 28 weeks. Group income protection policies also tend to offer practical support to help employees recover and return to work, such as access to virtual GPs, consultants, and mental health professionals.

Critical illness cover

Offering support for employees experiencing serious illness, critical illness cover provides financial support to help them deal with the inevitable loss of income. Unlike group income protection, critical illness cover will pay out a tax-free lump sum in one go. EAPs and critical illness cover often go hand-in-hand to provide emotional support through a life changing diagnosis.

Spill

If your team is facing mental health challenges, a solution solely focused on therapy might be the right place to spend your money. As well as offering next-day therapy sessions with the top 13% of qualified therapists, Spill proactively screens your team and flags anyone who’s struggling. And then, a qualified therapist reaches out to offer personal support. This combination of proactive mental health screening and personal therapy has been shown to offer the highest return on investment when it comes to employee mental health support: for every £1 invested, you’ll experience a return of £6.30.

But it's not just about the money: partnering with Spill gives your team access to therapists specialising in over 80 areas of expertise, as well as therapy in 15 languages across eight time zones. It’s even been hailed as a ‘revolutionary’, ‘brilliant’, and ‘transformative’ benefit by some of the 30,000 employees we support with therapy.

Spill vs. small business employee health insurance for mental health support

Life in a small company (or any company, really) isn’t always easy: it can be fast-paced, and there can be high workloads, lots of change, and plenty of uncertainty (trust us, we know). For many small teams, mental health support can help them navigate this way of working, caring for emotional health while also maintaining productivity.

A way to emotionally support your team, Spill helps everyone on your team deal with life’s challenges so that they can bring their happiest, best selves to work.

Here’s how mental health support with Spill stacks up against mental health support with small business employee health insurance.

Health insurance
Spill
Who can get therapy?
Anyone who is part of the company health insurance plan Anyone in the company
Is everyone on the team covered? No, most providers exclude pre-existing mental health conditions from their cover Yes, there are no exclusions with Spill 

How easy is it to use?
Employees will need to call the health insurance provider, explain their symptoms and wait to find out if their feelings qualify them for therapy Very! Spill has a Slack or MS Teams integration, meaning your employees can book a next-day therapy session whenever they need it via your existing tech stack
Are employees proactively cared for?
No, only employees who realise they need mental health support and feel able to call the health insurance provider for advice will get the care they need Yes,  Spill’s unique algorithm spots signs of poor mental health on your team before it gets to a critical stage
Is it possible to choose a therapist?
No, your employee will be randomly assigned a therapist Yes, your employee can choose a therapist based on gender, language, or their area of expertise, and they can request to see the same therapist again
What format is therapy available in?
The initial contact is often by telephone and if therapy is suggested, can be in person or virtual Employees can choose to have message-based therapy, a one-off virtual therapy session, or book a longer course of virtual therapy
Can the company see usage data?
Not as standard Yes, you will get anonymous and transparent data on usage as well as employee feedback on sessions
Is it confidential?
Only if your employee knows how to contact the health insurance provider, otherwise they'll have to ask in the company and their use of the service is no longer private Yes, Spill is entirely confidential

Employee health insurance can be an amazing benefit for your team — but only if its the right solution to your company's problems. Take your time, do your research and speak to your employees. After all, they're the ones that know what they need to feel their best.

Are employee health insurance plans a legal requirement?
How does small business employee health insurance work?
How much does small business employee health insurance cost?
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