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Private Medical Insurance (PMI)

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Group Private Medical Insurance (PMI) schemes provide private medical treatment services to employees. The principal features and benefits are shown in the table below:

Common features of Group Private Medical Insurance
Employee benefit
  • Provides access to swifter treatment services
  • Provides access to (arguably) better levels of health services
  • Many different levels and types of cover available
Employer benefit
  • Swifter treatment means less initial sickness absence and faster return to normal working
  • Certain services can mitigate employer's duty of care risks e.g. stress counselling
Corporation taxation
  • Full corporation tax deduction of premiums for company
  • Class 1A NICs payable on P11D benefits in kind
Employee taxation
  • P11D benefit in kind and therefore premiums paid are subject to taxation;
  • The heath services benefits arising from claims are not taxable
Premium rates
  • The premium cost per employee will normally be well below the individual cost of providing the same benefit from taxed income

PMI cover can be extended beyond the employee to include their spouses/partners and dependent children.

There are many variations in the cover available, ranging from pure basic medical expenses cover to "Rolls Royce" plans including full travel insurance, dental treatment, various preventative benefits and increased levels of medical cover.

Employers also need to ensure they choose the correct underwriting terms and give consideration to any policy or group excesses that could reduce the premium. Policy excesses can cut both the premium cost considerably and the level of "comfort" claiming.

PMI is an excellent way to reduce absence through sickness and speed up staff returns to work. That's why it's an ideal component of a voluntary or flexible benefits arrangement.