For an employee, yes — the premium is a taxable benefit. For the company it is usually an allowable expense, which is why the arrangement persists.

What the policy documents actually say

Where an employer pays medical insurance for an employee, HMRC treats the premium as a benefit in kind. It is reported on the P11D or payrolled, and the employee pays income tax on the value at their marginal rate while the employer pays Class 1A National Insurance on it.

The economics still tend to favour the arrangement. The employee receives cover worth the full premium and pays tax on it rather than paying for it from taxed income, and the employer usually deducts the cost against profits.

Directors of their own companies face a more finely balanced calculation, since they bear both sides. Whether it is better to have the company pay or to buy personally depends on your marginal rate, the corporation tax position and how much you value the cover, which is an accountant's question rather than an insurer's.

The cover itself differs too. Employer schemes are often written on medical history disregarded terms, which is the one underwriting basis that ignores your history entirely — AXA Health lists it alongside full medical underwriting, continuing medical exclusions and moratorium. That basis is rarely available to individuals.

Which is why leaving a scheme matters so much. Moving from medical history disregarded to a personal policy usually means fresh underwriting, and anything that developed while you were covered becomes pre-existing on the new policy.

Questions to put to the insurer or broker

  • Is the scheme on medical history disregarded terms?
  • What happens to my cover if I leave?
  • Should the company or I pay, given my tax position?

Related questions

Sources

  • Source: AXA Health — Personal Health membership handbook, October 2024, read 4 September 2026.

The limit behind every answer here

None of this reaches a condition you already have. Cover is written for problems that arise after it starts, so anything you have symptoms of when you apply is excluded — permanently under full medical underwriting, or until a symptom-free period has passed under a moratorium. Chronic conditions are excluded by every insurer whose wording we hold. Figures quoted come from current policy documents and change at renewal, so check the document you are actually offered.

Get a free quote — a specialist broker calls you back, free and with no obligation.

Or see how UK cover compares and the FCA-authorised broker list.