How Much Does Group Health Insurance Cost Per Employee? (2026)

Group private medical insurance (PMI) is one of the most valued benefits a business can offer — but “how much is it per employee?” has no single answer. The per-head cost depends on who’s in your team and how you build the scheme. Here’s what actually drives the price, and how to keep it sensible without gutting the benefit.

What drives the per-employee price

Insurers price a group scheme on the risk and make-up of your workforce. The biggest factors are:

• Ages of your employees — the single largest driver. An older team costs more to cover than a younger one.
• Location — treatment costs (and therefore premiums) are higher in some areas, London especially.
• Level of cover — the hospital list you choose, and whether you include outpatient, mental health, dental and optical.
• Excess — a per-person excess lowers the premium in exchange for a small contribution at claim time.
• Scheme size — more employees usually means better value per head and more underwriting options.
• Claims history — for existing schemes, previous claims feed into the renewal price.

Underwriting: the choice that quietly shapes the price

How employees’ health histories are handled matters as much as the headline cover:

• Moratorium — no medical forms; recent pre-existing conditions are excluded for a set period. Simple and common for smaller teams.
• Medical history disregarded (MHD) — often available on larger schemes, this covers employees without excluding their pre-existing conditions. A powerful benefit, and sometimes surprisingly affordable at scale.
• Full medical underwriting — each person declares their history up front, so everyone knows exactly what’s covered.

Ways to control the cost without gutting the benefit

• Add a modest excess to bring the premium down.
• Use a guided or local hospital list rather than the broadest national one.
• Set sensible outpatient limits instead of unlimited cover.
• Offer a health cash plan as an entry-level benefit for part of the team.
• Tier the cover by role — comprehensive for key people, core cover for everyone else.

Is it tax-deductible or taxable?

For most businesses the premiums are an allowable business expense. For employees, group PMI is usually treated as a P11D benefit in kind, and the employer pays Class 1A National Insurance on the premium. The value to staff almost always outweighs the modest tax cost — and an adviser will set out the exact treatment for your scheme.

The cheapest scheme on paper is rarely the best value — the right cover for your team usually is.

Get the best value per head

ComparePMI compares your scheme across multiple insurers like-for-like. If you decide to go ahead, we introduce you to an FCA-authorised firm who advises on and arranges the scheme. It’s free and there’s no obligation. Explore business & group schemes or ask for a comparison.