Health & medical insurance
All contractors know how vital it is to maintain their well-being, particularly because they don’t have access to the benefits and sick pay that employees receive. Contractor health insurance allows contractors the flexibility and freedom they need to look after themselves no matter how tough times get.
Medical Insurance Market
Take a look at the medical insurance market - leave your details with us and we’ll help you pick the best option for you and your business.
Frequently Asked Questions
What does basic health insurance usually cover?
Health insurance allows you to receive healthcare from private medical practitioners. Basic health insurance usually covers in-patient treatments – things like tests and surgery – and daycare surgery.
What kind of things does basic health insurance NOT usually cover?
Every policy is different and you should always check individual offerings, but in broad terms, the following conditions are not usually covered by your standard basic medical insurance:
- Organ transplants
- Serious pre-existing medical conditions (although this does depend on the type of coverage you elect to take on)
- Issues relating to a normal pregnancy/childbirth
- Cosmetic surgery
- Drug abuse related conditions
- Chronic illness like diabetes, HIV, epilepsy, hypertension etc.
What are the benefits of health insurance?
Some of these benefits vary from provider to provider, but here’s a broad overview of what you can expect if you hold health insurance.
As a contractor, you’re responsible for every aspect of your business and you don’t have a lot of time or resources to spare. Private health insurance allows you to circumvent NHS waiting times and have a lot more flexibility as to where and when you receive your diagnoses and treatments.
- Specialist referrals
You can ask your regular GP to refer you to a private specialist if you want to explore alternative diagnoses/treatments. Your health insurance will cover the cost of that private specialist’s fees.
- Your family can receive the same level of care
Health insurance gives you the option to add family members to your policy, often at a discount, giving you the peace of mind that your loved one are also covered in the event of health problems.
The NHS is wonderful but it cannot always offer the same level of privacy as a private healthcare facility. If you pay for health insurance, you’re partially paying for an elevated level of care, which means things like private rooms and better facilities.
- Increased access to medication
There are some policies which will allow you access to drugs that the NHS does not. This is especially true of cancer medication. This increased level of personal choice and accountability can be invaluable, especially if your medical circumstances are difficult or life-threatening.
- Better mental healthcare facilities
Mental healthcare can be a bit of a lottery if you use the NHS – facilities depend enormously on living in the right postcode. Private mental healthcare ensures that you get fast access to qualified professionals, without having to be at your very lowest ebb.
- Quicker access to physiotherapy.
NHS physiotherapy waiting lists are often extraordinarily long and often result in patients being treated in a class as opposed to getting individual attention. Private healthcare gets you quicker, more person-centred physio.
- Access to 24/7 helplines
Although, the NHS does provide access to 111, it is an immediate non-urgent treatment line rather than a service where you can discuss your medical ailments and concerns with a qualified professional. Health insurers often offer additional services like dedicated helplines so that you can feel supported no matter where you are or what time it is.
- Preferential treatment for contractors
In some cases, private healthcare providers provide benefits and incentives for contractors and limited companies, so you may find that you get access to benefits like direct discounts and fitness checks.
What are the different types of health insurance?
There are two different types of health insurance: moratorium underwriting and full underwriting. The difference between them is that moratorium underwriting is a much more straightforward process and you don’t have to disclose your exhaustive medical history. If you have a pre-existing condition, it will definitely not be covered under your policy.
Full underwriting requires a complete medical check-up by an insurer-nominated medical professional. Your medical coverage is likely to be more comprehensive but it will also probably cost more.
Should I pay for my health insurance out of my personal funds or pay through my limited company?
This is an extremely complex question and will depend a great deal on your personal situation. However, here are the principles that should help you make a decision based on your circumstances:
If you want to pay for health insurance through your limited company
- Health insurance is a tax deductible expense when paid for by a business
- If your company pays for your health insurance (an expense that does not directly benefit the business) then this is called a ‘benefit in kind’ and this is taxable. Your company will have to pay category 1a National Insurance, which is 13.8% of the total cost of the health insurance and you will also be personally liable for income tax on the cost of the premium.
- A benefit in kind triggers the need for a P11d form, which will need to be prepared by you or your accountant, so this lost time/fee should also be taken into account.
- How much income tax you pay depends on whether or not it you fall into the basic, higher or additional rate tax band.
If you want to pay for health insurance personally
- You’ll be paying for the premium out of your net profit. This means you’ll have to earn more to cover the expense of the premium, plus tax.
- As always, the amount of tax you pay depends on which tax bracket you occupy.
- You can also choose whether or not to pay with the money from your personal income or from your dividends. This too will affect the amount you are taxed.
If you are unsure of the most cost-effective way to proceed, talk to your accountant, who will advise you on the best course of action.
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