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Stuart Gentle Publisher at Onrec

How To Choose Health Insurance for Startups And SMEs

Considering purchasing health insurance for your small business? As your business starts to grow and you begin hiring in more talent, you will be confronted with a wide range of possible benefits to offer your staff. Health insurance as a staff benefit is becoming more and more popular in the UK, and private health insurance is a great thing to offer as part of our startup employee benefits package.

Surprisingly affordable, offering health insurance also sends the right message about your company culture — building a sustainable and healthy working environment where everyone can thrive. Motivating employees is about offering a wide range or benefits, and it could be that health insurance is something that helps you stand out in the SME job market...

Offering value with your benefits package

Even in a startup environment, employees are expecting a certain range of benefits on top of their pay packet — just having an exciting working environment or working on something meaningful won’t necessarily cut it.

And the typical cliche startup benefits of ‘Friday beers’ and ‘unlimited ice cream’ might be fun and entice certain types of employees, but they are not exactly hallmarks of a considered and value-led business. People want benefits that will have a positive impact on their future.

It’s wiser to eschew the startup hype with your employee benefits and invest in the future of your team with benefits they actually might need like health insurance.

Offering benefits like health insurance might even give you a recruitment boost. In the third sector, health insurance is known to help recruitment and create a sense of longevity and loyalty amongst staff (essential for small business success when staff retention and staff turnover are key issues).

Benefits of small business health insurance

Why is health insurance a good idea for small businesses?

Here are some of the main benefits of health insurance to SMEs and their teams:

  • Absenteeism has a big impact on smaller teams — health insurance can help tackle that
  • Boost to staff loyalty and retention
  • Safe investment in company’s future
  • Great recruitment value proposition
  • Increased productivity levels from a healthy workforce.

Some health insurance providers also offer a helpline with telephone support, which can help you strategically manage company resources.

Trying to offer support to team members with health problems can take up a lot of time and resources; not to mention the stress and pressure of dealing with a health problem — and the fear that you’re going to say something wrong. (Mind has a good resource to help managers deal with mental health problems).

How to shop around for insurance

In order to get the best insurance deal, you can easily do it yourself by using third-party review sites or just shopping online.

You also have the option of hiring an insurance agent or broker to help you find the right policy. Insurance agents may charge a fee, but there are plenty of affordable options where the brokers have direct deals with the insurers.

In terms of the actual policy you go for, here are some things to consider:

  • Clarity — do you fully understand the policy?
  • Flexibility — can the policy be easily scaled up and down throughout the contract?
  • Features — does the policy offer any differentiating features and benefits? (For example, mental health support)
  • Cost — can you afford to make the payments every month, even with new hires coming in?

Good to know

Insurance procurement isn’t always easy, and there can be some annoying pitfalls. Here are some things you need to know about buying insurance:

  • Small business insurance cover usually ranges from 2 to 250 staff, so the policies are initially designed to meet a wide range of needs. Provide as much information as you can about your unique requirements so that you get an accurate quotation.
  • You have to disclose certain things when buying insurance — age and potential risks being amongst them. Previous illnesses or lifestyle choices may impact an insurer’s decision to ensure. For example, insurance provider Zurich has some guidance on how smoking impacts life insurance — remember that you will need to factor in the individual circumstances of your employees (though modern policies try to be flexible).
  • There are some cases in which certain insurance providers may be preferred over others — be careful about going with less established firms.
  • You can even get insurance if you have no employees — you need individual or family insurance in that case.
  • Levels of support can be quite different — read the small print and make sure you’re clear on what is (and isn’t) covered.

Budgeting for your insurance policy

Budgeting for SME health insurance is not just about covering the direct cost of the policy, but also about factoring in the time spent finding the right solution and managing the insurance cover for your team.

Note: it’s possible to cut costs by favouring digital solutions which often offer a ‘light’ insurance option. Don’t be tempted by all the add-ons if you just want simple insurance cover.

Communication with your team

How do you tell the team about your health insurance package and get them behind your decision?

If you’ve gone through a consultative process, it’s likely that most of your team will be fully on-board with the decision already.

A lot of businesses offer a phased adoption, giving health insurance to staff who have served a minimum number of months or years. After one year of service, it’s a good idea to offer staff something that helps solidify the commitment on both sides.

Recruitment benefits of things like health insurance can be quite significant, so make sure they’re clearly marked as benefits on job ads.

Remember that there are some potential tax implications for staff — be clear on what they are before you announce it.

  • Have support ready for when someone needs to make a claim
  • Be clear on where information can be accessed
  • Upgrade the policy as the company dynamic and team changes.

Going beyond health insurance

What about life insurance? Insurance for dependents? There are loads of insurance options that you may want to consider.

Some other popular options:

  • Travel insurance
  • Cash plans
  • Dental
  • Flu vaccinations

Selecting the right type of health insurance comes down to understanding your team and their needs. Select a policy that reflects your company and balances features with flexibility.