What are health cash plans?
Health cash plans are insurance schemes which enable individuals to claim back the cost of everyday healthcare expenses such as dental, optical and physiotherapy treatment, whether the treatment is accessed via the NHS or privately.
The plans, which involve a monthly premium, can be either employee or employer-paid. They can make up part of a voluntary benefits package, meaning cost lies with the individual, or be paid for by the employer as a funded corporate benefit. Employers have the flexibility to choose which products are included in their plans.
Many health cash plan providers now include additional health and wellbeing benefits, such as access to a virtual GP service, coaching, advice and support around areas like mental health, sleep and diet, and gym and retail discounts.
According to LaingBuisson’s 20th annual Health cover UK data insights report, published in January 2025, 2.89 million individuals had health cash plans in 2023, representing 4.7% growth year-on-year.
With 2.8 million people on long-term sick leave, according to Office for National Statistics figures published in April 2024, and long NHS waiting times, employer health support such as health cash plans is ever-more critical to maintaining a well and productive workforce. A survey by Simplyhealth in February 2025 found that 73% of HR decision-makers feel more strongly today that it is their responsibility to look after employees’ health due to longer NHS wait times.
Simplyhealth research has also found that employers derive broader business benefits from offering health support, with 51% reporting doing so improves employee satisfaction, 46% reporting lowered sickness absence and 42% citing improved retention.
What are the cost implications?
Health cash plans tend to be a more cost-effective option than private medical insurance, although the two often go hand-in-hand. A Financial Conduct Authority (FCA) review has said that cash plans offer the best value compared to other insurance products: claims costs as a proportion of premiums ranged from 10% in gap insurance to 72% for health cash plans.
According to LaingBuisson, the average price of an employer-paid health cash plan is £94 per contributor, compared to £272 for an individual or employee-paid cash plan. Employer cash plan costs have grown slower than inflation, meaning they cost organisations less per head in real terms now than in 2022.
Health Shield has seen a market shift from voluntary cover to employer-paid cover, with the majority of corporates choosing to offer benefits for the entire workforce to help employees access healthcare during the ongoing cost-of-living crisis.
Are there any tax or legal issues?
Employer-paid health cash plans are considered a benefit-in-kind: value is premium paid rather than cash repaid to employees. They are an allowable business expense, so can be deducted for the purposes of corporation tax.
What are the current market trends or developments?
UK attitudes are changing towards private healthcare, with 67% of people now saying they would consider using private healthcare and 34% saying they would pay for treatment in the next 12 months if required, according to the Independent Healthcare Providers Network (IHPN)’s Going private 2024 report, published in September 2024.
Health Shield notes a broadening claims mix. While dental, physiotherapy, chiropody, and optical remain the top claim areas, it has seen an increased take up of vaccinations, health screening and family benefits like maternity and family planning.
Westfield Health notes increasing focus on treatments including chiropody, physiotherapy and osteopathy in health cash plans, driven by the increasing prevalence of musculoskeletal conditions among UK employees, and also reflecting a broader trend towards supporting employee wellbeing through proactive care to reduce longer-term absenteeism. Westfield Health has also seen an increased emphasis on mental health support in response to the cost of living crisis.
With many employees struggling to get doctor’s appointments, additional services like access to a virtual GP service are becoming more popular. HealthShield has seen virtual GP usage grow 51% year-on-year, with broader online engagement also growing.
Technological advancements have led to the roll-out of increasingly user-friendly apps and enable providers to offer powerful data and insights to employers, allowing them to track usage and impact.
Who are the main providers and what types of schemes do they offer?
According to LaingBuisson, the top five providers by market share are Simplyhealth, Westfield Health, Medicash, Health Shield and BHSF Group. Other providers include Bupa, Sovereign Health Care, HSF and Benenden Health.
Simplyhealth recently launched a range of products offering affordable options to cover the whole workforce. The Simply Essentials package starts from £3 a month and includes access to a virtual GP and mental health and physiotherapy support. The whole product range includes services including neurodiversity assessments and menopause coaching. Empoyers only pay for what they need, avoiding duplication of services.
Westfield Health’s business health cash plans start from £6.52 per person and include optical, dental, physiotherapy services along with 24/7 virtual GP consultation and corporate-paid or employee-paid options. Certain plans also cover for quick diagnosis from MRI, CT and PET Scanning.
In response to the growing need for affordable healthcare access, Health Shield launched its Select Health Cash Plan in January 2024, which includes cover of dependent children. Level 1 starts at £4.77 per member and Level 2 cover, from £6.50 per member, is proving popular, with 46% of members opting for this level of coverage.
