Healthcare Cash Plans are one of the fastest growing employee benefits on the market.
With over 2 million people now benefiting from healthcare cash plans through their workplace, this product addresses one of the main elements employees look for in a benefits package; support with their health.
Whether this be physical or mental health, a Healthcare Cash Plan means businesses can look after their employees wellbeing, while giving them control over what they use the benefit for. Let’s look at what a healthcare cash plan is.
What is a Healthcare Cash Plan?
A health cash plan provides your employees with basic health coverage at a very competitive rate. As a result, the monthly premiums are significantly lower than they would be with a comprehensive medical insurance policy. Whilst cash plans don’t offer the range of cover private medical insurance offer, it encourages and supports your employees to look after their health by covering routine expenses.
Healthcare cash plans cover a number of different NHS and private treatments, provided they’re carried out by a qualified and registered practitioner. Treatments can vary per policy and per provider, but here are some of the most common treatments that are covered, with an example of potential coverage amount:
Note: your plan may not cover the entire cost of every session, as some policies will only pay out a proportion of each claim. For example a 50% per claim rule for physiotherapy. So for a plan with a £150 annual physio limit, you could claim back £20 from a £40 appointment up to seven times a year.
The Difference Between a Health Cash Plan and Private Medical Insurance
The most obvious difference is that group health insurance can offer a much wider range of medical coverage while healthcare cash plans are limited to routine health treatments. So where PMI might cover surgery, hospital costs and/or specialty treatments, Cash Plans help with lower-cost, everyday healthcare. Things like dental, physio, eye care.
The other key difference is ease of set-up. While group medical insurance will price their schemes on a range of variables (such as age of employee, location, previous claims, level of cover etc) a healthcare cash plan typically provides clear rates per level of cover. This typically means that healthcare cash plans have a much lower cost than private medical insurance.
Another notable difference between a private medical insurance policy and a healthcare cash plan is that a private health care policy works on a referred basis. Once referred and authorised, the medical provider will pay for medical diagnostics or treatment fully on behalf of the policyholder. Health Cash plan requires no such referral and works on a ‘claim back’ basis.
This means the cash plan holder will have to pay out for a check-up or treatment in the first instance, before claiming back the payment outlay from their provider, in addition to payment of a monthly premium. Nowadays claims can mostly be actioned via a providers app or online services and the money is typically refunded to the individual within 48 hours of treatment.
The main disadvantage of cash plans is that treatment is restricted to a list of authorised procedures and each employee is responsible for arranging the treatment themselves. This may be straightforward if they are already registered with a dentist or optician or are in contact with a physiotherapist. With Private Medical Insurance, the insurer advises you of suitable treatment providers. The other disadvantage is the employee pays for the medical treatment and then claims back from their employer afterwards.
Comparison Chart
| Feature | Healthcare Cash Plan | Private Medical Insurance |
|---|---|---|
| Core Purpose | Reimbursement for everyday healthcare costs (routine care) | Covers diagnosis and treatment of acute medical conditions (serious/new illness or injury) |
| Typical Coverage | Dental, optical, physiotherapy, osteopathy, prescriptions | Private consultations, diagnostic scans (MRI/CT), hospital treatment, surgery |
| How it Works | Pay upfront and claim money back up to annual limits | Insurer pays provider directly (subject to policy terms/excess) |
| Average Cost | £10–£30 per month | £40–£120+ per month (can be much higher depending on cover) |
| Employer Uptake | Approx, 2–2.5 million employees | 4.7–4.8 million employees covered via employer schemes |
| Market Position | Smaller but fast-growing “everyday health support” benefit | Larger, established private healthcare access benefit |
| What it Does NOT Cover | Major surgery, hospital treatment, serious conditions | Routine dental/optical care, most everyday health expenses |
| Typical Use Case | “Help me manage routine healthcare costs” | “Get me fast access to diagnosis and treatment” |
| Employer Value Proposition | Low-cost wellbeing perk, reduces out-of-pocket spend | High-value benefit to reduce waiting times and improve access |
Why Choose a Healthcare Cash Plan
Whilst the NHS provides heavily reduced cost medical treatment, it can sometimes be a struggle to cover the expense of routine appointments. If, for example, employees refrain from attending a dental appointment or physiotherapy session, their condition will likely worsen. Wearing glasses with an out-of-date prescription can cause headaches and nausea, leading to lack of engagement or sick leave.
Healthcare cash plans are also much more simple to implement and launch as they do not have to be individually costed. Employees are also fully covered for the range of treatments listed by a Healthcare Cash Plan, irrespective of their medical history. Everyone stands to benefit and nobody is left out making this a very inclusive benefit to offer.
A plan that’s funded by the employer is a fantastic perk and likely to attract new talent. And it’s a foundation for healthy, engaged employees.
How Bigmore Benefits Can Help
With over 20 years experience working with businesses to build their perfect employee benefits package, we have developed a unique framework suited to any company size and budget.
Whether it’s healthcare cash plans, private medical insurance, group income protection, death in service or more, we have the expertise of the market and the skill in customer service to help you make sure your employees feel their benefits are impactful and valuable.
To get in touch for a free initial consultation call fill out the contact for below or give us a ring. We will be happy to help!
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