The Ultimate Guide to Private Health Insurance for Global Employers

While healthcare is a super complex topic, it can largely be grouped into the following three main categories: 

1. State provided 
2. Privately funded
3. A combination of the two

It’s worth noting that these groups don’t quite account for:

• Different models of healthcare systems (e.g. Beveridge, Bismarck, National Health Insurance, out of pocket expense)
• How costs are covered (e.g. taxation, private funding, corporates)
• Ownership of the facilities (e.g. private or state owned)

In this guide, we’ll focus on the private element of healthcare as something provided for by employers. On a global scale, this usually looks like a mandatory private healthcare plan or it’s something that’s expected to be offered to senior employees or within certain sectors. 

Read on to find out everything you need to know about private health insurance for your global team…

Who is this guide for?

This guide is for People teams, People Leaders and anyone who is involved in the research, planning and implementation of your company’s employee benefits package. 

We know that employee benefit insurance can be super confusing with lots of moving parts, but it’s also one of the most important benefits! So we want to try and make it as easy as possible for everyone to understand. 

What is Private Health Insurance?

Private medical insurance (PMI) varies around the world, with some countries operating different models of healthcare, but essentially it is an insurance policy designed to cover the cost of medical care in private facilities. 

You might have also heard it called healthcare or private health insurance. If you’re wondering what the difference is between private health care and private medical insurance, don’t stress—this is a common question! The good news is, there’s no difference in meaning. Although, strictly speaking the policy taken out is called Private Medical Insurance (PMI), ‘healthcare’ can be (and often is) used interchangeably to mean the same thing. 

So, what actually is PMI?

Private medical insurance gives the policyholder a choice over the level of medical care they receive. This cover might include hospital admission, surgery, diagnostic tests, physiotherapy, nursing care, and more. PMI also often provides services and cancer drugs that aren’t always available through public services. Plus, policyholders can choose from a range of premiums to suit their needs. For example, employees can choose the amount they’re willing to contribute towards the cost of treatment (known as the 'excess'). 

In some countries, PMI only applies to acute conditions that present themselves after the policy begins. So, for example, if an employee in the UK has arthritis (or any other chronic condition) this wouldn’t be covered long-term, even if the scheme covers pre-existing conditions.

However, in many other countries around the world, private medical plans do cover chronic conditions and primary care, so it’s important to keep global and local nuances in mind when choosing plans for your team. You can find out more about what’s considered standard, market rate and great in different countries around the world in our country guides.

Types of healthcare systems 

Healthcare looks a little different around the world. Different countries take different approaches to healthcare generally, which affects the level of coverage and types of care typically offered and required. 

Here are some of the different types of healthcare setups:

1. Two-tier

A two-tier healthcare approach means that there is a public healthcare system but there’s also an option for a better level of care and amenities (e.g. private hospital room or beds) paid for privately by the individual or via a PMI policy.

2. Single-payer 

A single payer healthcare system involves either contracts with private organisations (e.g. Canada), or the country may have their own healthcare resources and employees (e.g. the NHS in the UK). 

Somewhere that has a single-payer healthcare system is typically paid for by a single public authority, not a private authority, nor a mix of both.

3. Multi-payer system 

Multi-payer is a healthcare system that is financed through more than a single entity, one of which may include government. 

How does Private Medical Insurance work?

Regardless of the type of healthcare system your country has, private medical insurance usually works in a similar way internationally. It can vary slightly between providers, but generally here’s how it works…

Initially, you (the employer) will choose the level of care you’d like to provide, before setting up a policy for some, or all, of your employees.

If they get sick, they can choose to see their primary care doctor or use the insurer’s online GP service (if available). The GP will give them a diagnosis or referral for further tests and treatment if needed.

In this case, they will receive a referral letter to send to the insurer, who will help them choose the right specialists and hospitals for their care as well as authorise any scheduled treatment. Invoices will be sent to the insurer for payment, minus the value of any excess.

Prescription services are often available too, delivering medicine to home or work addresses.

What is primary healthcare?

When researching private healthcare, you might’ve heard the term ‘Primary Care’ mentioned. It’s useful to know the meaning and/or distinction as it is a type of care many of us take for granted, yet are not fully clued up on whether it’s covered under private healthcare policies.  

Primary healthcare is defined by the World Health Organisation (WHO) as: 

Essentially, and in most cases around the world, this means it is the first point of contact for healthcare for most people. Primary care is mostly provided by GPs or primary care physicians, but other primary care providers can include dentists, pharmacists and opticians. 

Something to note is that many people often expect primary care to be included in their medical insurance policy, but this isn’t always the case. In the UK for example, primary care is considered an additional option on a private health insurance policy, as is the case with France. This is because both countries’ state funded healthcare systems are robust, with a focus on high quality primary care for all citizens.

What kind of PMI can employers offer?

There are two main types of health insurance plans that companies can offer employees: 

1. Individual plans 

A single individual takes out the insurance policy. This covers them and only them and the policyholder is usually liable to pay the costs of their medical care.

2. Group plans 

Companies with more than one employee can provide medical care to their team. Group plans often also include supplemental plans (e.g. dental and eye care). 

Group plans often carry less risk for the employer as it is spread across the entire insured population. This benefits employees as it means insurance premiums are often lower, and so they can enjoy reduced tax on their insurance. 

It’s worth noting that group plans are often divided into sub groups depending on company size. For example, Bupa, the largest private medical insurance provider in the UK, has two separate group plans: Corporate plans for companies of over 250 full time employees, and small business plans for companies of between 2 and 250 full time employees. 

If you’re considering opting for a group insurance plan, we can help connect you with a broker from our global network. Speak to someone from the Ben team here.

What does private medical insurance cover?

The general rule of thumb when it comes to PMI is that the policy you select determines the type of cover you have. Private medical care is available at a range of different levels of cover at various premiums designed to meet the needs of different customers. This means that the more basic the policy selected, the lower the employer costs.

That said, most standard PMI policies cover employees for at least the following:

• The cost of hospital admission
• Diagnostic tests, such as MRI and CT scans
• Surgery
• The costs of seeing a consultant
• Hospital accommodation and nursing care
• Cancer drugs 

And, depending on the country and provider chosen, the following care may also be included within a private healthcare policy: 

• Maternity care
• Chronic condition management
• Primary care 

In-patient vs out-patient care

When choosing a private medical insurance policy, it’s super important to understand the difference between out-patient and in-patient care, as this will affect your policy. 

In-patient covers you for procedures or treatments that need you to stay in hospital overnight. Out-patient covers you for procedures and treatments where you don't stay overnight or occupy a bed for the day. This is the main difference.

You might notice the list of things covered by standard policies mentioned above, show that standard policies cover mostly in-patient treatment. So it’s best to check that your policy is fully comprehensive if you’re looking to be covered for things like:

• Outpatient consultations
• Mental health treatment 
• Complementary therapies
• Physiotherapy and chiropody

Is emergency care covered by PMI?

A common question about private medical coverage is whether emergencies are covered. The short answer to this is that it depends which country the healthcare cover is taken out. In the UK, for example, PMI only covers you for non-emergency care—so if a person develops new symptoms where they need urgent treatment, it’s important that they visit A&E to get the care needed (whether they have PMI or not). 

Whereas in the USA, insurance is required for emergency and urgent care, otherwise the person being treated will have to pay the cost of the treatment upfront. 

In countries where PMI doesn’t cover emergencies, it can still be used to make hospital stays following an emergency a more comfortable experience. This could mean the policyholder uses it to access more comfortable private hospital rooms and beds. 

Is chronic care covered by PMI?

Some international providers cover chronic conditions within their policies, and in some countries, it is common practice for chronic conditions to be covered. However, in countries with state-funded healthcare systems, such as the UK, chronic conditions are typically not covered by private medical insurance. 

The reason for this in certain countries is that PMI is designed to cover acute conditions, with the goal of restoring the policyholder to health before the illness or injury happens. ABI states that PMI is designed to work alongside public healthcare (like the NHS), rather than replace it. 

That said, some policies may cover certain types of long-term treatment for chronic illnesses, so it’s always best to check the policy details to make sure.

If you want to find out more about what’s covered in an insurance policy, someone from our team is always happy to chat. Book some time with us here. 

Top international PMI providers

When arranging private medical insurance for a global team, it’s a good idea to shop around and find out which providers are out there in the market to get the best deal. But with so many providers to choose from, it can often feel overwhelming to know where to begin. 

Below is a list of some of our Ben-recommended International Private Medical Insurance providers: 

• BUPA Global
• Allianz
• AXA Health
• Cigna Global

You can read more about each of these providers in our benefits catalogue.

At Ben, we’re super proud of our network of insurance brokers who can help you to find the best providers and plans to suit your global team. Want to find out more about insurance brokers? Read on…

What is an insurance broker?

An insurance broker is a licensed professional who acts as the communicator (intermediary) between you and the insurance provider. This means that their job is to help you find a policy and level of cover that is best suited to your company’s needs and budget!

Brokers usually work on commission from the insurer, but are always regulated in the UK by the Financial Conduct Authority (FCA). Part of the regulations here is that brokers have a duty of care to their customers and must work with their best interest in mind.

Most brokers are known for offering advice on insurance, handling claims, and recommending providers to best suit your needs. However, some brokers are “non-advised”, meaning they will help you apply for cover and explain how things work — without offering you advice. Non-advised brokers typically operate in the home & car insurance industries.

Ben partners with top brokers who are licensed to offer the best advice for your business needs. If you want to speak to someone about country specific providers for your global team, we’d be happy to connect you with our network. 

What are the advantages of PMI to employers?

So we’ve outlined what private medical insurance is and how it works, but you might be wondering what the advantages associated with it are. The good news is that PMI brings awesome benefits to both employers and employees. Let’s look at some of them!

Advantages to employees 

Quicker access to care 

‍In the UK, long waiting times are a major issue for the NHS, with over 3 million people waiting more than 18 weeks for medical treatment as of April 2023. By comparison, most PMI policies give policyholders 24/7 access to virtual GPs and they can usually expect to see a GP in-person within one week.

Access to private medical insurance through their employer gives employees the green light to skip lengthy NHS queues and get the treatment they need faster.

Virtual GP services

‍As mentioned, many private health insurance providers now offer virtual GP services (some on a 24/7 basis) to help people get a diagnosis or referral quicker. While many people prefer to be seen in-person, virtual appointments can be a massive help for those with low mobility or particularly hectic work schedules. Plus, it frees up more time for doctors to tend to more patients each day.

Earlier diagnosis 

If an employee has private health insurance and a GP thinks they need to see a specialist or consultant, they can refer them. They’ll be given what’s called an ‘open referral’ letter, detailing what the issue is and what type of medical specialist they need to see. Being seen faster means you’re more likely to be diagnosed (and therefore treated) sooner.

Some providers offer mental health support

It’s becoming more and more common for insurance providers to offer mental health support, as mental ailments are considered just as important as physical issues. In fact, Bupa recently launched a ground-breaking mental health proposition for businesses, the Workplace Mental Health Advantage. Companies with group plans can now receive advanced data analytics to help businesses understand the impact of employee mental health, as well as digital access to a mental health therapist within 10 days for all members.

Health insurance providers are seeing more companies investing in mental health cover through PMI in recent years. Similarly, employee uptake in mental health support via their PMI plans is on the up. This is most likely a result of the cost of living crisis putting additional strain on employee mental health, meaning they’re more likely to seek out employers who offer health insurance to ease their worries. 

Access to a wider range of drugs and treatments 

One of the key benefits of PMI is that patients get access to a wider range of drugs and treatments than they might on the NHS. This could mean their treatment will be more tailored to, and therefore better for, their individual condition. Employees with PMI are also more likely to be able to get experimental treatment and drugs privately, as private clinics do not need to wait for full clinical trialling to be complete before they offer these services.

Similarly, if you have private medical insurance, you’re more likely to have control over the type of treatment you receive and when it’s carried out. For example, if you want to be treated in a hospital close to home, that might be easier privately than on the NHS where hospital beds and staff are limited.

Private hospital room & facilities

PMI gives employees access to a network of private hospitals and treatment centres. Each provider has their own hospital list, which could be made up of their own hospitals, private facilities in publicly funded hospitals, or a combination of the two. Some providers also work contractually with other companies to allow policyholders a choice of even more facilities.

Providers factor in the cost of treatment at each hospital when calculating the health insurance premium. This can mean that hospitals with higher fees (e.g. in central London) are offered separately.

Paying a higher price will also give employees some added extras, like the privacy of an en suite room and home amenities, such as a TV. Private facilities sometimes also have free WiFi, meals adapted to dietary requirements and even toiletries—making for a much more comfortable experience. 

Enhanced cancer care

This is often a key reason for people seeking private medical cover. In some instances, patients have to wait up to two months before they start receiving cancer treatment, which can feel endless. Cancer cover usually includes things like diagnostic tests and private consultations as well as surgery, radiotherapy, chemotherapy and aftercare. Some insurers will even pay for pricier treatments or new drugs, plus employees will have a wider choice of hospitals to receive treatment in. 

Cover for dependents and family 

Another massive advantage to many private healthcare policies is that employees can often add their family members and dependents to their policy. This means they will also be covered and therefore able to receive all the benefits associated with private medical insurance, too. 

For many employees this is a very valuable employee benefit as it gives them peace of mind that their loved ones will also be cared for in any time of need. In fact, according to Metlife, around 76% of employees said that having health benefits gave them peace of mind in their working day—PMI is not to be underestimated!

Advantages to employers

Aside from having healthier employees, which is beneficial for you in the long-run as you’re likely to have fewer people off on sick leave, PMI offers many other advantages to you as an employer.

1. Employer Branding 

Firstly, it can have a big impact on employer branding, as you’ll be viewed as a business that genuinely cares about its people and supports them through thick and thin. This can help you stay competitive and attract top talent—in such a saturated job market, candidates are more likely to opt for a workplace with a strong and caring employer brand. 

2. Improved employee retention 

Retaining employees, and keeping engagement levels high, is another benefit. Nearly half a million people took out private medical care in 2022, so if you’re willing to cover the cost as an employer, that’s likely to be a driver in encouraging employees to stay put and appreciate what they’ve got. This is particularly true for individuals who are able to add family members to their insurance policy, giving more of their loved ones peace of mind.

3. Stay competitive 

According to Metlife, in 2023, 79% of employees say private medical insurance is a “must-have” employee benefit. Not only that, but less than half (46%) of employees rate salary as the most important factor in employee experience. 

This means that meaningful benefits are a super important way to stay relevant and competitive in the job market. 

4. Increased employee productivity

The same report by Metlife states that 60% of employers in 2023 found that healthcare benefits greatly increased productivity amongst staff. This could partly be attributed to the wealth of benefits they receive from having access to great healthcare.

Is PMI tax efficient for employers? 

When your company offers private medical insurance as a benefit to your employees, there are a number of tax implications that come with it. These may vary from country to country, so it’s important to confirm with your country’s tax authorities for local implications. 

If you’re a UK based company, here’s how PMI will impact how your business is taxed.

• Insurance Premium Tax (IPT)

The premium you pay for PMI is subject to IPT at the standard rate of 12% (as of June 2017).

• VAT

Most PMI schemes are insurance based, and therefore not subject to VAT. Though it is worth noting that some schemes where a non-insured non-medical service is included, then VAT may be charged on the value of that service.

• Corporation Tax Relief

Buying PMI is considered a business expense, so the costs will be taxed as such—meaning you’ll benefit from tax relief at the current corporate rate. For unincorporated businesses, the cost of PMI can be deducted from taxable profits.

• Employee Tax

When a business provides PMI for employees, the employee is considered to have received what is called a ‘Benefit in Kind’, so the employee is taxed on the individual benefit value.

Tax can be tricky to navigate when it comes to employee benefit insurance, so if you want to find out more about it in different countries, we have a dedicated team at Ben who’d be more than happy to chat to you!

How do insurance premiums work? 

Insurance premiums are the amount paid for insurance every month. With company paid PMI plans, usually the employer pays the cost for both the company and the employee. Sometimes the employer will pay a base amount and then the employee can use the likes of a flexible allowance or salary to pay for extra coverage.

How are insurance costs calculated?

There are many different factors which can impact insurance premiums and how the costs are calculated. With medical insurance, this can be the likes of the employee’s age, where they live or whether they smoke or not. 

With group private medical insurance plans, the premium is calculated by incorporating all of these factors and taking an average. So for example, if you work for a company where most employees are based in central London and are smokers, then your quoted premium will likely be quite high. 

Can PMI be a flexible employee benefit?

While it’s true that the insurance landscape has traditionally been fairly rigid, we’re aiming to make it as simple, flexible and easy to navigate for companies as possible. To help manage the regulated side of employee health insurance, we work with a panel of brokers who we can bring into conversations to help support with recommendations and the set up of PMI within your company. We have our own network, but if you have an existing relationship already, you also have the flexibility to bring them onto Ben!

Flexibility can sometimes be difficult for certain companies (e.g. smaller companies), but we’re working on unlocking as much flexibility as possible for all customers. We do this with voluntary health options and flexible allowance cards which allow employees to easily add dependents and family members to their policies, as well as upgrading their level of cover. 

Find out more about our flexible benefits options and the Ben card here!

What are top companies offering?

Companies who are excelling in their employee benefits are offering as much flexibility and choice as possible to support their core benefits. 

Giving employees an allowance through Ben which allows them to spend their allocated budget on what actually matters to them—whether that’s health insurance, a gym membership, adding a family member to their dental cover, or a monthly pottery class. 

In recent years, we’re consistently seeing a trend of companies gravitating towards more flexibility for their employees, but you can see for yourself with our benefits benchmarking tool. We’ve now surveyed over 1,000 companies to offer clear insight into what companies of different sizes and industries are offering.