Company director health insurance

Yes. A limited company can pay for health insurance for its directors, either through a business policy or by paying the insurer for a director's cover. The premium is usually an allowable business expense for corporation tax, but the cover is normally a taxable benefit in kind for the director.

When the company pays for your cover, you would usually pay income tax on the value of the benefit, and the company would normally pay National Insurance on it too. How this is reported depends on how the policy is set up, which we explain in the next question.

Whether paying through the company works out better for you depends on your wider circumstances, so we always recommend speaking to your accountant before deciding. We do not give tax advice, but we can explain how each type of policy works and give you the figures your accountant needs.

It depends on how the policy is set up. If your company arranges and pays the insurer directly, the cover is reported on a P11D and the company pays Class 1A National Insurance. If you hold a personal policy and the company pays it, or reimburses you, different payroll rules apply.

According to HMRC guidance on GOV.UK, where an employee arranges the insurance but the employer pays the provider, the employer reports it on a P11D and adds its value to earnings for Class 1 National Insurance through payroll, but not PAYE tax. Where the employer reimburses the cost, the payment counts as earnings, so PAYE tax and Class 1 National Insurance are both deducted through payroll.

These differences are one reason the structure of your policy matters. You can read the guidance on medical insurance and tax for employers and talk it through with your accountant before you decide.

Often, but not always. Paying through the company gives corporation tax relief on the premium, but you will usually pay income tax on the benefit and the company pays National Insurance on it. Whether that beats paying personally depends on your salary, dividends and tax rates, so it is worth checking with your accountant.

If you pay personally, the premium comes out of income that has already been taxed. If the company pays, the tax treatment changes, as explained above.

The premium itself can also differ between an individual policy and a business policy, and between insurers. We can arrange quotes for both routes, so your accountant has real figures to compare. Our guide to how much private medical insurance costs explains the factors that affect the price.

Yes. Most insurers need at least 2 employees to set up a business health insurance policy, but some offer business plans that can be arranged for a single member. Alternatively, a sole director can take out an individual policy, paid personally or by the company, depending on what suits your tax position.

A single member business plan and an individual policy can differ in their cover options, underwriting and what happens if you take on staff later. We explain those differences so you can choose the structure that fits your plans.

If you work for yourself without a limited company, our page on health insurance for self-employed people explains your options.

Director only and small company schemes usually use moratorium or full medical underwriting. Larger schemes may qualify for medical history disregarded terms, which cover pre-existing conditions without a questionnaire. If you are switching an existing policy, your current underwriting can often be carried across to the new insurer.

On a moratorium basis, anything you have had symptoms, advice, diagnostic tests or treatment for in the 5 years before cover starts is not covered for the first 2 years. It may then be covered once you have been free of symptoms, advice and treatment for 2 consecutive years. With full medical underwriting, your history is reviewed upfront and any exclusions are confirmed at the start.

Each insurer sets its own minimum group size for medical history disregarded terms, but it is usually around 20 insured employees. Our guide to health insurance underwriting explains each option in detail.

Often, yes. Many policies let you add a partner and children, either paid by the company or at your own cost, depending on the insurer and scheme rules. If the company pays for their cover, the value is usually added to your taxable benefit, so it is worth comparing this with a separate family policy.

A separate family policy paid personally can be simpler, and it keeps family cover independent of the company. Each person on a policy is underwritten individually, and insurers price children in different ways.

We can quote both approaches so you can see the difference before deciding. Read more in our guide to what family health insurance covers.

Cover under a business policy usually ends when the company stops paying for it, but you do not necessarily have to start again. Where you are covered on a medical history disregarded basis, insurers can accept this underwriting when you move to an individual policy, subject to their criteria.

If your cover is on other terms, continued personal medical exclusions or a continued moratorium may allow you to keep your current position. In some cases carrying over your previous underwriting may not be necessary, and choosing a different option could reduce your premium.

Timing matters, so speak to us before your company cover ends and we will help you choose the right start date. Our guide to company health insurance after retirement explains the options in more detail.

Some are. HMRC guidance says 1 periodic medical check or health screening a year is exempt, so it does not need to be reported or taxed. Private medical insurance premiums are not exempt, and are normally treated as a taxable benefit when the company pays for a director's cover.

The same guidance lists other exemptions. These include treatment or insurance for injuries or diseases caused by your work, and up to £500 of medical treatment to help an employee return to work after being unfit or absent for at least 28 consecutive days.

Tax rules can change, so check the current position with your accountant. Some insurers also offer health assessments as an optional extra, and our guide to health insurance options explains the main choices.

Because we look at both sides of the decision. As an independent broker, Morehealth compares personal and business policies from leading UK insurers, explains how each would work for your company and helps you set up the right cover. Our advice is free, and our commission is not added to your premium.

As a small, UK based team, we offer a personal service. You speak to an adviser who understands the questions directors face, from single member plans to adding employees later.

We help with the application, underwriting and paperwork, then review your cover each year at renewal. You can call us on 0800 028 5540 or message us on WhatsApp. Our advisers are available Monday to Thursday, 9am to 6:30pm, and Friday, 9am to 5pm. Find out more about Morehealth.