Health insurance vs cash plan

The short version

• Private medical insurance (PMI) pays for bigger one-off events such as diagnostic scans, surgery and in-patient care.
• A healthcare cash plan pays back small, regular amounts for everyday costs such as dental check-ups, glasses and physio.
• You can have both. Many UK employers do.

Who PMI suits

Businesses that want to give staff fast access to consultants, scans and surgery, especially in industries where downtime is expensive or in sectors with an ageing workforce. PMI is the right call when the worst case really matters more than the everyday.

Who a cash plan suits

Younger and healthier teams, price-sensitive businesses, or any employer who wants a universal benefit that everyone feels every month. A cash plan from £5 per employee per month often punches above its weight on engagement.

Can you have both?

Yes, and many growing businesses run them together. A typical setup is a cash plan offered to everyone as the baseline benefit, with PMI added for managers and directors. As the business grows, PMI can extend to the whole team.

Costs example

For a 25-person business:

• Cash plan for all 25 staff at £10 per employee per month = £3,000 per year.
• PMI for 5 senior staff at £85 per employee per month = £5,100 per year.
• Combined annual outlay: about £8,100, before any tax effects.

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What about a healthcare trust?

A healthcare trust is a third option that usually only makes sense at around 250 plus employees, where the saved Insurance Premium Tax and bespoke benefit design can outweigh the extra admin. Below that, PMI or a cash plan or a combination of the two is normally the right answer.