Employee healthcare: a strategic approach to protecting your business and workforce
In the world of employee benefits, private medical insurance has undergone a dramatic transformation. What was once considered a peripheral perk has now become a critical strategic asset for businesses competing to attract and retain top talent. As healthcare costs continue to surge and employee expectations shift, companies must reimagine their approach to medical insurance and group income protection.
Should private medical insurance come with a health warning?
The current healthcare landscape is defined by challenges and opportunities. Due to severe underfunding the NHS is struggling. People want protection, and more employees are demanding easy access to private medical insurance. It has become the number one benefit in employee benefits as it plays a key role in attracting and retaining staff.
Employee participation in private medical insurance has reached record levels. Gone are the days when health insurance was a simple checkbox in employee compensation. Today it’s a necessity. The message is clear: in a competitive job market, comprehensive healthcare coverage is no longer optional – it is expected.
How can you protect your business?
Medical inflation is currently running between 10% and 13%, with premium increases ranging from 20% to 35% annually. The impact on a business if private medical insurance has no cost controls can be catastrophic. Employers can protect themselves by choosing an affordable and sustainable structure, apply benefit limits and select an appropriate excess for employees.
Businesses may also wish to review their Group Income Protection policies to ensure that they are utilising the early intervention and rehabilitation processes embedded within them for physical and mental health issues.
How can early intervention processes help?
Modern insurance strategies are increasingly focused on prevention rather than cure, so early intervention is a gamechanger. Early intervention services provide mental health support, reduced insurance claims and minimise productivity losses. A robust early intervention service supports your employees but it can also reduce business costs including health insurance.
Most Group Income Protection providers offer early intervention and rehabilitation processes for absence within their policies at no additional cost, but businesses do not always utilise these services to their full potential. These processes are a win-win all round, for both employers and employees. As well as reducing absence spend, early intervention processes can link in with existing occupational health services.
The days of one-size-fits-all medical insurance are over. Successful businesses will be those that view healthcare not as an expense but as a strategic investment in their most valuable asset – their people. By embracing a proactive approach, companies can build medical insurance and intervention processes that protect both their financial interests and their workforce’s wellbeing.
Graham Yearsley, Principal and Carl Heritage, Consultant – Employee Benefits
24 June 2025