How Much Does Business Health Insurance Cost Per Employee?
Last checked: 31 October 2026
There is no single price for business health insurance per employee. Each insurer works out a premium for the whole group, and the cost per person depends mainly on the ages of the staff covered, how many people are on the scheme, where they live, the underwriting type, the excess, the out-patient limit, the hospital list and the group's claims history. Two firms with the same number of staff can be quoted very different amounts. Insurers also price the same group differently, and a broker talks through the options.
How is the price worked out?
Insurers usually price a company scheme per member and add the members together to give the total premium. The figure is normally reviewed once a year when the policy renews.
The main factors are set out below. For an overview of how a scheme works, see what is business health insurance.
The factors that affect cost per employee
| Factor | How it usually affects the price |
|---|---|
| Staff ages | Older members usually cost more to cover than younger ones |
| Number of staff | Larger groups can spread risk more widely and may have more pricing options |
| Location | Treatment costs differ by area, so where staff live and work can change the price |
| Underwriting type | How past health is treated changes what is covered and so the premium |
| Excess | A higher excess usually means a lower premium |
| Out-patient limit | Lower annual out-patient limits usually cost less than full out-patient cover |
| Hospital list | A narrower list of hospitals usually costs less than a wider list |
| Claims history | A group that has claimed a lot in the past may see higher renewal prices |
Staff ages
Age is one of the biggest drivers of cost, because the chance of needing treatment tends to rise with age. A younger team is usually cheaper per head than an older team of the same size.
Number of staff
Group size affects both price and the options available. In very small schemes, each member is usually priced mostly on their own age and details. As a group gets bigger, insurers can spread the risk across more people, and the group's own claims record starts to carry more weight. Some underwriting options, such as medical history disregarded, are often only offered above a minimum group size, which varies by insurer.
Firms with one or two staff can still ask for a quote. The broker explains what is available for a business of that size.
Location
Private treatment costs differ across the UK, and premiums can be higher where hospital fees are higher, such as central London.
Underwriting type
Underwriting is how the insurer treats each member's past health:
- Moratorium: on policies that offer it, there is usually no health questionnaire at the start, but recent pre-existing conditions are not covered at first.
- Full medical underwriting: each member declares their medical history, and the insurer lists any conditions that are excluded.
- Medical history disregarded: past medical history is ignored, so pre-existing conditions can be covered. Because the insurer takes on more risk, this option usually costs more.
Excess, out-patient limit and hospital list
The excess is the amount a member pays towards a claim before the insurer pays the rest, so a higher excess usually lowers the premium. Out-patient cover pays for specialist consultations and tests that do not need a hospital bed; a lower annual limit usually costs less than full out-patient cover. Insurers also group private hospitals into lists, and a list that leaves out the most expensive hospitals usually costs less.
Claims history
For an existing scheme, insurers look at how much the group has claimed. A high level of claims can lead to a bigger rise at renewal. A new scheme with no history is priced on the members' details and the cover chosen.
Other costs to know about
Covering partners and children, adding mental health cover or extras such as dental cover usually raises the premium. Company-paid medical insurance is also usually a taxable benefit in kind, and the employer pays Class 1A National Insurance on its value, according to HMRC guidance on GOV.UK.
How does cost per employee change with group size?
In general terms, the price per head reflects the people in the group more than the headcount alone. A small group with older staff can cost more per person than a larger, younger group. As a group grows, the risk is shared across more members, more underwriting options can open up, and the group's own claims record plays a bigger part at renewal. A larger group with high claims can still see higher prices.
Getting a quote
Prices and cover differ between insurers and depend on your business and staff. Quotes are not given on this website. The form asks a few short questions, such as how many employees you have and whether you already have a policy, plus your contact details. A business health insurance broker then calls you to talk through the options. If you send your details outside office hours, the call may come the next working day.
Sources (checked 2026-10-31):
- GOV.UK, Expenses and benefits: medical or dental treatment and insurance, What to report and pay: https://www.gov.uk/expenses-and-benefits-medical-treatment/what-to-report-and-pay
- Association of British Insurers, PMI health guide: https://www.abi.org.uk/globalassets/files/publications/public/health/2017/08/abi_bro3887_pmi_health_guide_v4.pdf
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