Private Medical Insurance vs Health Cash Plans: What’s Best for Your Business?

Choosing the right healthcare benefit for your employees can feel overwhelming. At Cransford, we regularly speak to business owners, directors and HR managers who want to provide meaningful healthcare support but aren’t sure whether Private Medical Insurance or a Health Cash Plan is the best fit.

Both options offer valuable benefits, but they serve very different purposes.

In this guide, we explain the key differences, costs, benefits, and which solution is best suited to different types of businesses helping you make a confident, informed decision.

What Is Private Medical Insurance?

Private Medical Insurance provides employees with fast access to private healthcare, allowing them to bypass NHS waiting lists for diagnosis and treatment.

PMI typically covers:

• Specialist consultations
• Diagnostic tests (MRI, CT, ultrasound)
• Private hospital treatment
• Surgery
• Inpatient stays

Many policies also include:

• Mental health support
• Physiotherapy
• Cancer treatment
• Virtual GP services

For employers, PMI is a premium benefit that offers significant wellbeing and productivity advantages.

You can learn more about our business private medical insurance solutions here

What Is a Health Cash Plan?

A Health Cash Plan reimburses employees for everyday healthcare expenses, such as:

Employees usually pay upfront and then claim back a fixed amount from their cash plan.

Health cash plans do not cover private surgery, diagnostics, or hospital stays and they do not bypass NHS waiting lists.

Key Differences: PMI vs Health Cash Plans

Feature	Private Medical Insurance	Health Cash Plan
Covers surgery	Yes	No
Covers diagnostics	Yes	No
Covers hospital stays	Yes	No
Covers dental & optical	Sometimes	Yes
Bypasses NHS waiting lists	Yes	No
Everyday healthcare	Limited	Yes
Mental health support	Usually	Limited
Typical cost per employee	£38 – £75	£5 – £15

Cost Comparison for Businesses

Typical Monthly Employer Costs (Per Employee)

Benefit Type	Monthly Cost
Health Cash Plan	£5 – £15
PMI (Core Cover)	£38 – £75
PMI (Comprehensive)	£60 – £120

While PMI costs more, it delivers far greater protection, speed, and impact on employee health and productivity.

Which Option Is Best for Your Business?

PMI Is Best If You Want To:

✔ Reduce long-term sickness absence
✔ Speed up employee recovery
✔ Support mental health properly
✔ Offer a premium employee benefit
✔ Improve staff retention & recruitment

PMI is particularly effective for:

• Professional services
• SMEs with small teams
• Executive leadership groups
• Companies competing for talent

Health Cash Plans Are Best If You Want To:

✔ Provide low-cost healthcare support
✔ Improve employee wellbeing perception
✔ Offer an entry-level benefit
✔ Support dental & optical expenses

Cash plans work well for:

• Larger teams
• Entry-level workforces
• Cost-sensitive businesses

Can You Combine PMI & Health Cash Plans?

Yes, and many of our business clients do exactly that.

A combined approach allows:

• PMI to cover serious medical treatment & fast diagnosis
• Cash plans to cover everyday healthcare costs

This provides broad healthcare support at a controlled budget, while maximising employee value.

Which Option Delivers Better ROI?

From our experience at Cransford, PMI typically delivers higher long-term ROI through:

• Reduced absenteeism
• Faster employee recovery
• Improved morale
• Better staff retention

However, health cash plans offer excellent perceived value at a very low cost.

The best choice depends on your:

• Workforce size
• Budget
• Staff demographics
• Recruitment goals

How We Help at Cransford

At Cransford, we take a consultative approach, helping you design a healthcare strategy that fits your business, not a generic template.

We:

✔ Compare all leading UK insurers
✔ Design cost-effective benefit structures
✔ Provide clear, jargon-free advice
✔ Support implementation & ongoing management

You can learn more about our team and approach here

Get Expert Advice for Your Business

If you’re deciding between PMI and health cash plans, or considering combining both, we’d be happy to help.

Speak to Cransford today for expert advice and a free, no-obligation comparison