Most UK businesses pay £35–£110 per employee per month for health insurance in 2026, with the average around £57. The price depends mainly on your team's ages, the cover level and the excess. Premiums are usually an allowable business expense, and employees pay benefit-in-kind tax on their share.
- ✓Group cover is typically 10–30% cheaper per head than the same people buying individually.
- ✓Add ~12% IPT (included in quotes) and 15% Class 1A NIC on top; deduct corporation tax relief.
- ✓The excess, outpatient limit and hospital list are the three levers that move the price most.
What UK businesses actually pay in 2026
Group health insurance is priced per employee, based mostly on age, location and the cover you choose — not on anyone's medical history. Here's what schemes typically cost per employee, per month:
| Team profile | Core cover | Mid-level | Comprehensive |
|---|---|---|---|
| Young team (avg age ~30) | £35–£45 | £45–£60 | £60–£80 |
| Mixed team (avg age ~40) | £45–£60 | £57–£75 | £75–£95 |
| Senior team (avg age ~50) | £55–£75 | £70–£90 | £90–£110+ |
Core cover means inpatient treatment and surgery; mid-level adds capped outpatient consultations and diagnostics; comprehensive removes most caps and widens the hospital list. London postcodes price towards the top of each range.
The taxes on top (and the relief that offsets them)
Three tax effects shape the true cost:
- Insurance Premium Tax (12%) — already included in any premium you're quoted.
- Class 1A National Insurance (15%) — the employer pays this on the benefit value each year.
- Corporation tax relief — premiums are generally an allowable business expense, reducing taxable profits.
For employees, cover is a benefit in kind: a £684-a-year premium costs a basic-rate taxpayer about £137 in tax through their tax code. From April 2027, this moves from the annual P11D into real-time payrolling.
Five ways to bring the cost per employee down
- Add an excess. £100–£250 per person typically cuts premiums 10–20%.
- Cap outpatient cover. A £1,000 outpatient limit keeps the big protection and drops the price meaningfully.
- Choose a standard hospital list. Unless your team needs central-London hospitals, don't pay for them.
- Use a six-week option. Cover only kicks in if the NHS wait exceeds six weeks — saves roughly 20%.
- Review at every renewal. Insurers price keenest for new business; a whole-of-market review each year keeps yours honest.
Get your per-employee price in 60 seconds.
Frequently asked questions
How much is business health insurance per employee per month?
Most UK businesses pay between £35 and £110 per employee per month in 2026. A young team on core cover sits at the bottom of that range; an older workforce on comprehensive cover with a full hospital list sits at the top. The average across schemes is roughly £57 per employee.
Is it cheaper per person than individual health insurance?
Usually, yes — typically 10–30% cheaper per head than the same person buying alone, because insurers price the group's risk collectively and acquisition costs are lower. Larger groups also unlock underwriting individuals can't get, like medical history disregarded.
Do employees pay anything?
Employees pay tax on the premium as a benefit in kind — roughly 20%, 40% or 45% of the premium value depending on their tax band. A £600-a-year benefit costs a basic-rate taxpayer about £120 in tax. The company can also choose to let employees contribute towards upgrades or family cover.
What does the employer pay on top of the premium?
Two things: Insurance Premium Tax at 12% (built into the quoted premium) and Class 1A National Insurance on the benefit value, currently 15%. A £1,000 premium therefore costs the company about £1,150 before corporation tax relief.
Does the price go up as employees get older?
Yes — age is the biggest single pricing factor. Most insurers use age bands, so the scheme's cost drifts up as the team ages, in addition to annual medical inflation. Reviewing the market at each renewal is how you keep this in check.
Can I get a scheme with just 2 or 3 employees?
Yes. Group schemes typically start at two employees. Below that, directors can still be covered through the company on an individual policy paid by the business — the tax treatment works the same way.