Key Differences Between Small Business & Large Enterprise Health Insurance Needs

This article explores the distinct needs of small and large businesses when choosing health insurance providers. We will examine how company size influences the structure and cost of plans, the benefits each type of company may seek, and regulations that should be considered by all businesses. Whether you’re a startup or an established corporation, understanding these differences is crucial to making the right choice.

What Is Small Business Health Insurance?

Small business health insurance, often tailored for companies with fewer than 250 employees, is a policy designed to provide private medical cover for staff members. These plans are often more flexible and affordable, reflecting the unique needs and budget constraints of smaller operations.

Key Benefits of Small Business Health Insurance

• Customisation: Small businesses benefit from tailored plans that allow them to choose coverage options that are relevant to their team, such as outpatient care, mental health support, or dental.
• Affordability: Plans can be adjusted based on the business’s financial capacity, making it easier to offer cover without overextending.
• Employee attraction and retention: With competition for talent, especially in tight labour markets, offering a private health plan can help small businesses stand out.
• Faster treatment access: Employees benefit from shorter waiting times compared to the NHS, leading to quicker returns to work.

Providers such as Bupa, AXA Health, and Vitality offer a range of small business health plans tailored to meet varying budget and coverage needs.

What Is Large Enterprise Health Insurance?

Large enterprises, which are businesses with more than 250 employees, require a different approach when it comes to company health insurance. Their size, resources, and complex employee demographics call for comprehensive, well-structured plans that offer consistency across departments and roles.

Key Features of Large Enterprise Health Insurance

• Extensive coverage: Plans typically include advanced treatments, specialist referrals, and employee assistance programmes (EAPs).
• Administrative support: Due to the complexity of handling large volumes of employees, insurers often provide dedicated account managers, usage reporting, and claims tracking.
• Inclusion of global coverage: For multinationals or companies with international operations, global medical insurance options may be incorporated.
• Wellbeing programmes: Fitness memberships, preventative screenings, nutritional support, and more may be built into the plan.

Business medical insurance plans for large companies tend to prioritise consistency and broad coverage, often with a focus on preventative care and long-term health management.

How Different is the Cost Between Small & Large Businesses

One of the most fundamental differences between small business and large enterprise health insurance needs is budget. Smaller companies often have limited funds and may need to balance offering benefits with maintaining profitability. Larger companies, while having greater financial capacity, must manage economies of scale and ensure that coverage remains cost-effective as employee numbers grow.

Cost Saving Options for Small Businesses

• Only select options that you consider “essential” to your employees, ensuring they are covered for what they need.
• Companies can include an excess that employees must pay when they get treatment to reduce the premium cost of the insurance.
• Offer voluntary benefits to your employees, allowing them to pay into extras they may want in their plans to get the cover they want.

Large Enterprise Budget Considerations

• With the number of employees being significantly higher, companies benefit from bulk options and discounts when taking out health insurance for their employees.
• Because of the size of the company, it does allow the business to negotiate the terms of the health insurance in some cases, this is dependent on the provider and how much the business has spent with the provider, they can also take part in profit shares along with having MHD (Medical Health Disregarded) underwriting.
• Large enterprises usually have wider coverages with their health insurance meaning they can offer more bespoke cover including health screening, dental, optical and potentially even family coverage.

How Your Workforce Can Affect Your Coverage Needs

Different workforces have different healthcare priorities. A young startup team might be more interested in mental health support and gym membership discounts, while a more diverse or older workforce may need comprehensive chronic care management and family coverage.

An Example of a Small Business Workforce Needs

When you think of smaller businesses, these tend to be small start-up companies that tend to have a younger demographic working for them. Which means their health insurance needs will be different compared to other companies, they maybe more interested in wellness plans, digital GP access, and keeping the plan flexible for them. With the addition of optional add-ons that they can benefit from in their day-to-day life, like lifestyle services or gym memberships, to name a few.

It is important, however, for the business to know their workforce and the demographic of their employees as the cover you can get is flexible and can be tailored specifically for you.

An Example of a Large Enterprise Workforce Needs

When large enterprises consider their workforce, they tend to be very diverse and have multiple different needs for their employees. This means employers must ensure the cover they get covers a wide range of options for their employees.

The company will also have a greater demand for occupational health services, to promote to their employees that they have all the cover they need to help them be the best they can both in work and out of work. Including offering mental health resources and return-to-work support.

Like small businesses, however, it is important that a large company still takes into consideration the needs of their team when choosing what policies to add to the health plan to ensure the employees get the cover they need.

UK Compliance and Regulatory Considerations

Regardless of company size, UK businesses must consider several compliance and regulatory requirements when offering health insurance.

Key Regulations

• Taxation: Employer-paid private medical insurance is considered a “benefit in kind” and must be declared on employees’ P11D forms.
• Data protection: Handling sensitive health data requires compliance with GDPR.

Smaller businesses may need more external guidance to manage these responsibilities, while large enterprises typically have internal teams or legal departments to handle compliance.

Provide Support and Administrative Needs

The level of support and administration offered by insurers also varies based on company size.

For Small Businesses

• Online platforms and self-service portals can simplify plan management.
• Brokers or consultants often assist with choosing the right plan and add value in terms of medical underwriting and negotiating premiums.

For Large Enterprises

• Require tailored reporting, data analytics, and HR system integration.
• May need multiple access points for different divisions or departments.
• Dedicated account management is essential.

Case Study Examples

Nexteq’s Commitment to Employee Wellbeing

Nexteq took out small business insurance to help and support their workforce. With the company being a small business, it was important that they keep their employees happy, focused and healthy.

The business sees wellbeing as a priority for them as they see it as fundamental for productivity and job satisfaction. Which is why they provide comprehensive cover for all their employees, including pre-existing conditions which allows them to cater to a diverse workforce. This is important for the company as they foster a supportive, dynamic workplace where all employees feel valued and cared for, building an inclusive work environment.

This approach contributes to the company seeing enhanced productivity and making employees more engaged, while also attracting and retaining talent. Making them stand out in a competitive tech industry by offering not only a great working environment but also a culture within the company that prioritises wellbeing and care.

Thomson Reuters Utilising AXA to Streamline Their Processes

For larger corporations, they need to get the most out of their health insurance and make it work for them. Not just at an employee level but also for the admin side which can get tedious and is important it is done right for compliance reasons.

Thomson Reuters a AI and Tech company set out to automate their insurance documents, this would reduce errors and speed up production of the documents and there for ensuring that AXA can aid the employee effectively while also doing what is best for the business. They used Contract Express which streamlined the handbook creation process making it easier to make changes to the documentation while keeping it consistent and accurate.

This has resulted in the process being simplified for the company along with making an annual saving in an excess of £80,000 based on changing 80 documents. The main saving however has been noticed for AXA’s Technical Service time, allowing them to better serve the company and reducing wasted time.

Making the Right Choice

Choosing the right business medical insurance plans involves a combination of strategic planning and understanding of company needs. Here’s a quick guide to help decide:

Small Business Checklist

• Can the plan be tailored to specific workforce needs and are the benefits relevant for the staff?
• Is the underwriting relevant for the size of the business?
• Does it provide staff with virtual GPs, mental health services or lifestyle and wellbeing rewards?

Large Enterprise Checklist

• Does the plan offer comprehensive cover for a diverse workforce? Is there something that every employee could benefit from?
• Are there wellbeing initiatives and preventative care services ensuring that the employees can look after themselves and remain at work?
• Is there dedicated account management allowing the HR team to relay to stakeholders efficiently finding and updates from the health insurance provider?

Working with a broker or health insurance advisor can be a valuable step in making the right decision.

Ensure Your Business Has the Right Cover

While both small businesses and large enterprises aim to support their employees through health insurance, their paths differ significantly. Smaller businesses often seek affordability and flexibility, while large corporations prioritise scale, consistency, and advanced services. Understanding your company’s unique requirements and aligning them with the right insurance provider is key to ensuring a happy, healthy workforce.

Whether you’re exploring your first policy or reviewing an existing one, considering your workforce size, budget, and coverage priorities will help you navigate the UK health insurance landscape with confidence.

Healthplan’s partners offer a wide range of health insurance cover for businesses of different sizes. If you are looking for a quote for your business contact our team and we can help you get the quote that’s right for you.

FAQs

How Much Does Small Business Health Insurance Typically Cost in The UK?

Costs can vary depending on multiple factors, including the size of the team, what is covered in the plan, the provider and even how much excess you want your employees to cover. Healthplan can compare insurance for you and get you quotes from our partnered providers.

Is It Mandatory for UK Businesses to Offer Private Health Insurance?

It is not a legal requirement in the UK to provide private health insurance, however, many companies choose to provide it as a benefit to improve employee wellbeing and reduce sickness-related absences.

Can Small Businesses Access the Same Providers as Larger Corporations?

Yes, many insurers such as Bupa, AXA Health, Vitality and other providers offer products for businesses of all sizes. However, the cover or level of cover may differ depending on the size of the company.

Sources

About the Author

Adam Sherring

Adam Sherring is the Managing Director of Sante Partners Ltd, the owner of Healthplan.co.uk, with over 25 years of experience in the UK Private Medical Insurance (PMI) industry. Before founding Sante Partners in 2019, Adam played a key role in building two PMI networks and setting up direct response teams.

Passionate about accessible healthcare, he is dedicated to developing user-friendly platforms that empower consumers to make informed healthcare decisions. Adam also works with businesses to create tailored employee benefit programmes that promote wellness and drive satisfaction. A regular speaker at UK insurance events, he is an influential figure in the PMI sector and a Financial Conduct Authority Approved Individual.