What’s the cost of providing health insurance for your employees? Well, that depends on several factors and how this employee benefit is set up. There are two primary ways through which businesses can offer health insurance to their workforce:

The company can invest in Group Health Insurance and cover the expenses for employees, or, employees can opt to purchase health insurance through the company as a voluntary benefit.

In the first scenario, employees don’t have to contribute financially, while in the second case, they do, albeit at a reduced rate compared to what they might pay independently.

The overall cost of health insurance hinges on various factors, which we’ll outline in this article, along with an estimate of the industry average.

However, instead of solely focusing on the cost of obtaining health insurance, it’s essential to also consider the business expenses associated with not having it. Long-term absences, high staff turnover, burnout levels, and presenteeism can all impact your bottom line.

There’s no one-size-fits-all policy or pricing in Group Health insurance. What truly matters is tailoring the policy to your needs to achieve the best value for your business.


What determines employee health insurance costs?

When estimating the costs of your health insurance plan, several factors specific to your organisation come into play, in addition to the desired coverage level. Key factors include:

First, the size of your employee group plays a role, as more employees result in higher premiums but lower costs per worker. Second, the ages of your staff members are a significant factor, with insurance costs increasing for older employees who are more likely to make claims.

Additionally, the overall health profile of your workforce can influence premium costs, as can the geographical location of your company and employees, with healthcare expenses varying by location.

The depth of coverage in your policy also matters, as insurers offer optional add-ons that can either increase or decrease premiums. Finally, the choice of insurer is crucial, as each one establishes a different price point with varying policy features, making direct comparisons challenging.

In essence, there is no straightforward answer to the question, “How much does employee health insurance cost?” However, on average costs of health insurance for small businesses can be approximately £50 per month per employee or £600 per year, but many different factors can influence this.


How can I control how expensive my employee health insurance is?

Business Health Insurance is a costlier employee benefit, but it’s also highly sought after. Finding the right policy can be transformative for both your staff and your business. Here are some approaches to manage these costs while reaping the benefits of a Group Health Insurance plan:

First, consider increasing the excess, which is the amount paid by staff or the business toward an insurance claim. A higher excess can lead to lower initial premium costs, making it a prudent choice for businesses with a lower likelihood of claims.

Additionally, setting eligibility criteria, like a minimum tenure requirement, can control access to the scheme. Opting for annual payments rather than monthly instalments may secure discounts from many insurers.

Another effective strategy for managing the costs of employee health insurance is through the implementation of Guided Options. In this approach, the insurer takes an active role in directing individuals to specific healthcare providers rather than relying on the traditional route through a general practitioner (GP). This method introduces a more streamlined and cost-effective process by offering employees a choice of three consultants based on clinical excellence and proximity to their home address.

Consulting an independent broker is a valuable step, as they prioritise your business’s best interests and can source the best-value quotes tailored to your specific needs at no extra cost. Also, consider adjusting the level of coverage to match your budget and employee requirements.

Lastly, review and trim unnecessary extras offered by insurers, such as Employee Assistance Programs or gym discounts, which can lower the overall price, but weigh these savings against the value of the additional services provided.


Get health insurance quotes for your employees

Engaging an independent insurance broker is the most reliable way to obtain accurate and cost-effective quotes. At Anderson Health, we offer free advice and quotes to startups and SMEs looking to initiate employee benefits or review existing health insurance policies. We gather quotes using our long established health insurance company relationships to ensure you receive the best policy for your needs.


Anderson Health are independent Private Medical Insurance advisors based in the city of London with customers both in the UK and throughout the rest of the world.

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Call us at +44 (0)204 548 4670 or email.