Employee health cash plans: What you need to know

Employee health cash plans are an employee benefit that companies can implement to help their staff cover the cost of everyday healthcare services. Learn more about what they have to offer in our insight.

Darren Perkins
Sales Director
Employee health cash plans: What you need to know
Darren Perkins
Sales Director
Group Health
August 8, 2023
Read time: 

Employee health cash plans are an employee benefit that companies can implement to help their staff cover the cost of everyday healthcare services. They may be used as an alternative to other types of insurance, such as business health insurance, as they offer an alternative way to provide health related support.

What are employee health cash plans?

Employee health cash plans are paid for by the company and provide a direct benefit to any staff you choose to be covered under the terms.

Covered employees may be able to claim back their expenses for some private health services, such as consultations, treatments, tests, scans and prescription charges, up to an annual limit. Precisely what's covered and how much the limit is will depend on your policy, but in short, employee health cash plans allow you to cover some of the costs of private healthcare for your employees.

What do employee health cash plans cover?

Employee health cash plans may cover a range of diagnostic tests, consultations, and therapy services. One of the many benefits of health cash plans is they may allow your employees to claim back expenses for pre-existing conditions, as well as any new medical problems. Some examples include:

Optical care

Employee health cash plans may include coverage for optical-related treatments, such as eye examinations, prescription glasses, contact lenses, laser eye surgery, etc.

Dental care

Employees may be able to claim back expenses for dental treatments such as check-ups, fillings, dentures, injuries, cleanings and other preventative care.

Consultations, tests and scans

Cover for fees related to consultations, tests and scans with dietitians, occupational therapists, GPs and other medical staff.

Prescription charges

Help towards the cost of prescription charges from the NHS or private healthcare.

Therapy treatments

Your plan may allow employees to claim back their physiotherapy, osteopathy, chiropractic treatments, acupuncture, chiropody and podiatry expenses.

Health screenings

Some health cash plans may allow you to include coverage for health screenings, which aim to help employees understand their health and detect any current or future health concerns.

Family cover

You may have the option of extending cover to employees' families so that their partners and dependents can claim back under the same terms.

Cash benefits for hospital admissions

Employees may be able to claim back some of the costs they pay for hospital admissions for inpatient and outpatient visits.

What are the benefits of employee health cash plans?

Employee health cash plans may allow your employees to access health services that were otherwise unavailable to them due to cost and other factors. The benefit may vary from person to person, but some examples include:

  1. Improve employee health and wellbeing - Employees may be more likely to make healthier decisions if they’re able to reclaim the costs.
  1. Show your staff that you’re a supporting employer - Demonstrate to your employees that your business is taking actions towards improving their physical and mental health.
  1. Improve your retention rates - Adding employee health assessments alongside other employee benefits may help you to retain your employees due to the benefits they receive by working for you.
  1. Attract talented members of staff - Individuals seeking employment may consider the benefits they'll receive on top of their salary by joining your business. Employee health assessments are one of many options you can include with the aim of attracting valuable new team members.
  1. Support your employees financially - Employees can claim back on eligible health services up to an annual limit. This means that they won't have to cover these expenses themselves and have more income for their other financial commitments.
  1. Reduced absenteeism - Employees seeking medical help and receiving treatment may be generally healthier. This means that they may not have to take as much time away from work due to sickness.
  1. Policy flexibility - The company owner will have control over which type of health services and treatments are covered, as well as the annual limit. This allows them flexibility over the level of cover available and create a plan that's within their budget.
  1. Benefit all of your employees - Employee health assessments may allow staff to access a range of different services, making it easier to cater to the needs of a diverse range of employees and benefitting everyone.
  1. Help staff access services they otherwise wouldn’t be able to - Some treatments covered may not be otherwise available to your employees due to cost or available promptly through public services. Your health cash plan may help them get access to the health support they need.

How are health cash plans different to other insurances?

Many business insurances benefit your employees and business in varying ways. Each of them works slightly differently, and understanding these differences may help you to choose the most beneficial cover for your workforce. Some examples of how employee health cash plans differ include:

  1. Scope of coverage - Employee health cash plans may cover your staff for a wider range of day to day healthcare costs and medical services compared to other insurance. As an example, business health insurance may not cover dental and optical treatments and some cash plans may cover preventative treatments.
  1. Underwriting - Employee health cash plans may not require any medical underwriting. This means that all eligible employees can benefit from the coverage regardless of their medical history, helping you meet your entire workforce's needs.
  1. Simplicity and speed - You may find that the claims process for health cash plans is less complex than other insurances due to their wider scope of coverage and ability to cover pre-existing conditions. Employees just need to provide proof of claims for any covered expenses, and they'll receive their cashback when approved.

How does taxation work on employee health cash plans?

As with all employee benefits, it’s important to understand how UK taxation applies to the business and any individuals who are benefitting from the cover. We recommend that you consult with your accountant and/or financial adviser to understand how your business will be affected, but an example of how it may work is:

  1. For employees - If a member of staff earns over the personal allowance and they’re receiving the benefit, they may be liable to pay tax on the cost of the premiums.
  1. For companies - You may be able to deduct the cost of your employee health cash plan from pre-taxed profits as an expense.

Compare employee health cash plans

There are many employee health cash plans available at varying levels with different cover options and terms. To help you compare your options, we offer a free service where we'll learn about your needs and search the UK market for an appropriate policy.

We work with many employee health cash plan providers in the UK, and we'll aim to find you the most inclusive policy at the most competitive price. You're under no obligation to purchase, and we're here to support you before, during and after purchasing a policy. Please complete the form below, and a member of our team will be in touch.

Speak to an independent insurance advisor

Our advisors are available to answer any questions, compare or renew policies, and help advise you on insurance needs. To speak to someone, provide some contact information, and a member will be in touch.

0800 970 1618
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