A guide to employee benefits insurance plans for UK employers

Among the many different kinds of support and benefits you can offer your workforce, employee benefits insurance plans can be the most cost-effective and comprehensive.

Let’s hone in on the topic of group insurance coverage and why it’s something your business should consider, whether it’s large or small, for your employees.

What do we mean by employee benefits insurance plans?

Employee benefits insurance refers to any kind of benefit you extend to personnel via group coverage. This includes things like group health insurance, critical illness cover, income protection as well as life insurance. These types of plans and benefit packages are becoming more valued by employees and are a cost-effective way for companies to put in place vital financial protection for their staff.

How does group insurance coverage work?

As mentioned above, employee benefits offered through insurance plans are provided through you, the employer, to support your employees. In a lot of ways, group insurance plans work very similarly to individual plans. The main difference is that as the company providing this type of coverage, you are the master policy owner.

In other words, when buying group employee benefits insurance in the UK, the main contract will fall under your business’ name. Your employees will then be provided with confirmation of the coverage, in other words, a certificate of coverage which allows them to use the policy in question. 

Each member of staff will be covered at a minimum, but coverage may also extend to family members, such as dependants, children under a certain age, parents and spouses.

Which businesses are eligible for employee benefits in the UK?

As long as your business is registered in the UK, you’re allowed to set up an insurance scheme for your staff. In order for your business to take out coverage, some schemes might require a minimum number of employees, such as three or five staff members, to start.

Which employee benefits are mandatory in the UK and do they include insurance plans?

While it’s not mandatory to offer insurance as a benefit, it can form an important part of your rewards & benefits strategy. Mandatory benefits for employees include:

• Workplace pension schemes

• Paternity, maternity, and shared parental leave

• Paid annual leave

• Statutory sick pay

How much does employee benefits insurance cost?

While it’s difficult to put an exact number to what a group insurance plan may cost (it’s up to your organisation to research different plans and providers), the cost usually depends on the type of coverage you want to offer. Healthcare insurance, for instance, will cost more than dental coverage. The cost can also depend on the make-up of your workforce.

What is the most in-demand employee benefits insurance cover?

Health is generally at the top of most businesses’ lists when it comes to providing employee benefits. Life insurance, critical illness coverage and income protection all come in a close second.

Why buy group employee benefits insurance?

There are lots of reasons why you should purchase group insurance for your workers:

It enhances the financial well-being of your staff

First and foremost, group insurance coverage can significantly improve the financial security of your employees. It provides a safety net that covers unforeseen events, such as medical emergencies or severe illnesses, ensuring that your staff are not burdened with unexpected financial challenges.

It’s more cost-efficient when compared to taking out individual plans  

One standout advantage of group employee benefits insurance is its collective cost efficiency. By pooling resources, premiums are generally lower compared to individual policies. This not only makes it more affordable for employees but also underscores your commitment as an employer to well-being.

It helps attract and retain top talent 

From comprehensive coverage to extra perks, like discounts, tickets and subscriptions, group insurance offers many ways to attract the best talent. Employees today are far more discerning about their benefits package, and a robust insurance plan adds a compelling dimension to your overall compensation strategy.

It’s easy to administer

Group insurance streamlines administrative processes for both employers and employees. With one, central policy, it is easier to manage policy holders, reducing the administrative burden on HR teams. This efficiency translates into a smoother experience for employees, who can easily access, read and understand their coverage, without wasting anyone’s time.

It encourages wellness initiatives and prevention

Many corporate schemes incorporate wellness initiatives, promoting a proactive approach to health. This not only benefits individual employees but contributes to a healthy and more productive workforce. Prevention-focused features, such as regular health check-ups, mental health support, early intervention programmes and wellness schemes can lead to reduced absenteeism and increased overall productivity.

Plans are flexible and easy to customise

Group insurance plans are versatile and can be tailored to meet the specific needs of your workforce. Whether it’s life insurance, emergency medical coverage, income protection, or dental insurance, the flexibility to customise allows employers to address the unique requirements of their diverse personnel make-up.

It fosters a culture of care 

Investing in group insurance goes beyond financial considerations. Employees feel valued when their employer prioritises their wellbeing, leading to increased morale and a positive work environment.

As you can see, the benefits of purchasing group employee benefits insurance are multifaceted, ranging from financial security to talent attraction and retention. It’s a strategic investment that not only safeguards the interests of your employees but also contributes to the overall success and sustainability of your business.

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What are different types of employee benefits insurance policies?

There are several types of benefits that you can cover with group insurance. In this section, we cover the most common types of group policies your organisation can take out or buy.

Group health insurance

A group health insurance policy offers comprehensive private health coverage to employees and their families under a single contract, regardless of their role or background. Policies typically cover hospitalisation, ambulance costs, maternity leave, and worldwide treatment. While some plans include critical illness cover, it’s a good idea to do a bit of research in order to find a provider with a policy that specifically suits your organisation’s needs.

Group critical illness cover

Sometimes employees can contract or develop a serious medical condition. In this case, critical illness coverage will provide a large payout if they survive a minimum period. The group coverage you choose should list out all the diseases that are covered, which could include cancer, Parkinson’s disease, stroke, dementia and heart attacks.

Group life insurance

A group life insurance policy, or ‘death benefit’, provides a lump sum payout to an employee’s designated beneficiaries if they pass away. This coverage offers significant peace of mind regarding family finances. Typically, employees do not need to undergo pre-medical checks to be covered, though provider rules may vary. Again, make sure you identify a policy that aligns with your specific business needs.

Income protection

Income protection offers employees additional support if they suddenly can’t work due to a sickness or disability. A group income protection plan will offer the individual a payout in the form of regular income, up until when they return to their job. It may also include access to rehabilitation services to aid their recovery.

Group dental insurance

Company dental insurance is a more specific type of health coverage that takes care of any costs associated with dental care - think routine check-ups and hygiene appointments as well as dental procedures. Just like regular health coverage, these plans can often cover the employee’s family members as well. 

Conclusion: the value of group coverage

Group employee benefits insurance can be a cost-effective and hassle-free solution to providing broad and comprehensive benefits to your staff. You won’t have to spend hours administering individual plans and employees get to enjoy additional perks like discounts to their favourite restaurants, retailers and cinemas. In addition to other benefits focused on well-being, it’s one of the best ways of providing your staff with coverage for the things that matter most like their health and what happens after they pass away.