Faster treatment,
less time off.

What is group private medical insurance?

Group private medical insurance, or group PMI, is a company-arranged scheme funding private healthcare for employees. The employer is the policyholder and pays the premiums; employees are members of the scheme rather than customers of the insurer.

It is the one group benefit employees use while perfectly healthy, a consultation, a scan, a physiotherapy course, which makes it the most visible and most appreciated of the group products, and also the most expensive to run.

What a company scheme typically covers

The core of almost every scheme is acute conditions: illnesses or injuries that respond to treatment and are expected to lead to recovery. In practice that means specialist consultations, diagnostic tests and scans, inpatient and day-patient treatment, and surgery.

Common additions are outpatient cover up to a limit, mental health support, physiotherapy and other therapies, and a virtual GP service, which is frequently the most-used part of the scheme.

What is generally excluded is chronic conditions requiring ongoing management, emergency care, and pre-existing conditions depending on the underwriting basis. Group PMI complements the NHS rather than replacing it.

Medical history disregarded vs moratorium underwriting

This choice determines how pre-existing conditions are handled and is the most important decision when setting up a scheme.

Moratorium underwriting excludes conditions an employee has had in a defined period before joining, commonly five years. The exclusion typically lifts once they have gone a continuous period, often two years, without symptoms, treatment or advice for it. No medical forms are needed at the outset.

Medical history disregarded, usually available to larger schemes, means pre-existing conditions are covered from the start with no exclusions. It costs more and is the strongest basis for employees.

Full medical underwriting assesses each member individually, producing precise terms but requiring forms from everyone.

Most small schemes start on a moratorium basis. Employees should be told clearly which basis applies, because assuming an existing condition is covered when it is excluded is a common and demoralising surprise.

The P11D position

Group PMI differs from the other group risk products on tax, and employers should plan for it.

Premiums are normally an allowable business expense for corporation tax where they meet the wholly and exclusively test. However, company-paid medical insurance is generally a taxable benefit in kind for employees: the premium attributable to each employee is reported on the P11D, the employee pays income tax on it, and the employer pays Class 1A National Insurance.

That does not undermine the benefit, employees pay tax on a fraction of the premium rather than the full cost of treatment, but it should be communicated up front rather than appearing unannounced in a tax code. Some employers use a PAYE Settlement Agreement or payrolling to handle it more cleanly. Tax treatment depends on your individual circumstances and may change in the future.

Controlling the cost at renewal

Group PMI premiums rise with medical inflation and with your own claims experience, and double-digit renewal increases are common. Several levers exist.

An excess per claim, per member per year, materially reduces the premium and discourages very small claims. A guided or directional consultant network, where members choose from a shortlist rather than any consultant, reduces cost noticeably. Capping outpatient cover at a fixed annual amount, rather than leaving it unlimited, is another common lever, as is a six-week NHS wait option that only funds private treatment where the NHS wait exceeds six weeks.

The one thing worth avoiding is drifting through renewals without re-broking. Schemes that are never tested against the market tend to accumulate increases that a competitive review would have removed.

Cover Your Family is not FCA regulated and does not arrange schemes. A separate, FCA-regulated adviser will compare insurers, set the underwriting basis and handle the renewal, at no cost to your business.