What Does Company Health Insurance Cover? What Is Usually In and Out

Last checked: 9 November 2026

Company health insurance usually pays for private diagnosis and treatment of acute conditions that start after a member joins the scheme. An acute condition is a disease, illness or injury that is likely to respond quickly to treatment. Hospital treatment as an in-patient or day patient is the core of most policies. Out-patient cover, mental health cover and therapies are often options with limits. Long-term chronic conditions, emergency care and cosmetic treatment are usually not covered. The exact cover depends on the policy the employer chooses, and each policy lists its own benefits, limits and exclusions.

For a general overview of how a company scheme works, see what is business health insurance.

What is usually in, sometimes in and usually out?

The Association of British Insurers (ABI) sets out what private medical insurance might cover. In general terms:

What is in-patient and day-patient cover?

This is the core of most company schemes. The ABI describes three ways treatment is received:

• In-patient: admitted to hospital and occupying a bed overnight or longer, for medical reasons.
• Day patient: admitted to a hospital or day-patient unit for a period of medically supervised recovery, without staying overnight.
• Out-patient: attending a hospital, consulting room or clinic without being admitted as a day patient or in-patient.

In-patient and day-patient cover usually includes surgery, tests, hospital accommodation and nursing care. Members usually need a GP referral, and they check with the insurer that the treatment is covered before it starts.

What are the out-patient options?

Out-patient cover pays for specialist consultations and diagnostic tests, such as scans, that do not need a hospital bed. According to the ABI, most policies cover in-patient and day-patient treatment, but do not always include out-patient treatment and diagnostic tests.

On company schemes, out-patient cover is often chosen as an option, with levels such as:

• no out-patient cover;
• cover up to a set annual money limit;
• full out-patient cover.

A lower limit usually costs less. Therapies, such as physiotherapy, may come with their own limit on sessions or money.

Is cancer covered?

Cancer treatment can be covered, but the details differ a lot between policies. According to the ABI, policies can differ in which cancer treatments they cover, for which stages of the disease, and in the limits on drug treatments. Some policies cover certain cancer drugs that are not available on the NHS.

Is mental health covered?

Mental health cover varies more than most parts of a policy. Some company schemes include it, others offer it as an option, and limits usually apply. Depending on the policy, cover may range from out-patient therapy sessions to in-patient psychiatric treatment. Some schemes also give members access to a phone helpline or counselling service. Each policy sets out which mental health treatment it covers and the limits that apply.

What extras do schemes often include?

Some company schemes add services alongside treatment cover. In general terms, these can include:

• a remote GP service by phone or video;
• health and wellbeing apps or digital support;
• second medical opinion services.

Routine visits to an NHS GP are not something the policy pays for: the ABI lists GP consultations as normally not included. Extras differ between insurers and plans, and some may be dropped or changed at renewal.

What does company health insurance usually not cover?

The ABI lists conditions and treatments that are normally not included. The main ones for a company scheme are:

• Chronic conditions: long-term treatment of conditions that need ongoing monitoring, continue indefinitely, have no known cure or are likely to come back, such as diabetes. Private medical insurance is designed for curable, short-term illness or injury.
• Pre-existing conditions: conditions a member had before joining are usually not covered, at least for a period, depending on the underwriting type. Under moratorium underwriting, such a condition may become eligible later, usually after a continuous period of two years after the policy starts with no symptoms, treatment, medication, tests or medical consultations for it. More on this in business health insurance underwriting.
• Accident and emergency: emergency admissions are normally left to the NHS.
• Cosmetic treatment: treatment carried out for appearance rather than medical need.
• Other common exclusions: normal pregnancy, infertility, organ transplants, kidney dialysis, experimental or unproven treatment, injuries from hazardous pursuits, and prescription drugs after leaving hospital or as an out-patient.

Under medical history disregarded underwriting, usually available to larger groups, members' past medical history is set aside, but the other policy exclusions still apply.

How does the employer shape the cover?

The employer chooses the cover for the scheme, and the main choices are:

• the out-patient level and whether mental health cover is included;
• the excess, the amount a member pays towards a claim before the insurer pays the rest;
• the hospital list, the group of private hospitals members can use;
• whether partners and children can be added.

More cover usually means a higher premium. Some insurers allow different cover levels for different groups of staff.

Getting a quote

Cover, limits and exclusions 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. Schemes are most common in firms with three or more staff, and smaller firms can also ask for a quote. If you send your details outside office hours, the call may come the next working day.

Sources (checked 2026-11-09):

• Association of British Insurers, Are you buying private medical insurance? (PMI guide): https://www.abi.org.uk/globalassets/files/publications/public/health/2017/08/abi_bro3887_pmi_health_guide_v4.pdf
• Association of Medical Insurance Intermediaries, Health insurance glossary (acute condition, chronic condition, in-patient, day patient, out-patient, medical history disregarded): https://amii.org.uk/health-insurance-glossary/