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What to consider when retiring or leaving a company health insurance scheme

3 min read

12 August 2019

Despite free NHS medical treatment, an increasing number of businesses are choosing to cover employees by taking out a corporate health insurance plan.

A company health insurance policy not only helps to protect employees, but is beneficial for the business. Access to quick diagnosis and treatment helps with staff retention and is an attractive benefit for new employees. 

What happens to your cover if you retire or leave the company?

When retiring or leaving the company, the provider you are insured with will most likely provide you with a quote for continuing your medical insurance. At this point you may find that the price is more than you were expecting. Insurers will often inflate the price for a group leaver because they find it difficult to pinpoint the risk associated to you. 

Group schemes are community rated, so your premium will be calculated from the policy you are leaving. This means, even if you haven’t had to claim on the company health insurance policy, any claims that have occurred can still impact the premium the insurer provides. Therefore, we strongly recommend that you shop around and compare health insurance policies when moving away from a group scheme, as there will likely be competitive options available.

Company health insurance scheme

Seek advice from a specialist health insurance broker to fully assess your options.

If your company policy covers over 15 members then the underwriting of your policy could be Medical History Disregarded (MHD). Unlike other forms of medical underwriting, MHD allows members to gain cover for pre-existing conditions (a medical condition that was present before the start of cover). 

Although MHD underwriting has the major benefit of having cover for pre-existing conditions, there are a couple of things you should be aware of if continuing this underwriting on an individual policy. MHD underwriting can cost significantly more than other options and your choice when switching insurers may be limited, as each health insurer has their own stance on this underwriting.

Seeking advice from a specialist health insurance broker will allow you to fully assess your options with regards to your medical underwriting and the most suitable insurer for your needs. 

Why continuing cover could be essential

Having a gap in cover could mean that you must start new underwriting, which can have a detrimental impact if you are already covered for an existing condition. The rule for most insurers is that, to continue your current underwriting, you must take a policy out within 30 days of the termination of the group scheme.