Yes — a company can run a scheme covering only its directors, which suits small and one-person limited companies, though the benefit-in-kind tax still applies.
How it actually works
A director-only scheme is a normal arrangement. Insurers and brokers routinely set up cover for directors alone, so a one-person or small limited company can hold a scheme for itself without extending cover to wider staff. Limiting eligibility to directors is a legitimate, objective category rather than a problem.
The tax treatment is the same as any employer-paid cover. The company pays the premium and deducts it against corporation tax, and it is a taxable benefit in kind for the director, reported on a P11D with Class 1A National Insurance for the company. Making the scheme director-only changes who is covered, not how the benefit is taxed.
It tends to suit contractors and owner-managers who would rather run their cover through the business than pay for it personally, and it can be widened later to bring in staff or family as the company grows. Whether paying through the company beats a personal policy on tax depends on your income and the rates that apply to you.
As with any company-paid cover, keep the two questions separate: a broker arranges the director-only scheme and confirms what it covers, and an accountant confirms whether the company route is worth it for you. Both are quick to answer and worth asking before you set the scheme up.
Questions to put to the insurer or broker
- Can my one-person company hold a scheme covering only me?
- What benefit-in-kind cost would a director-only scheme add for me?
- Is paying through the company better than a personal policy at my income?
Related questions
- Health cash plan or private medical insurance for my staff — which is better?
- Do I have to offer private health insurance to all my employees?
- What does group private health insurance for a small business cost?
- How does private health insurance for a small business work in the UK?
Cover, tax and advice are three separate questions
This explains how business and group cover is structured, not what a scheme would cost you — that turns on your workforce, the cover level and the insurer. The tax treatment described is general and depends on your circumstances, so confirm it with an accountant, and use an FCA-authorised broker to arrange the scheme itself. Private medical insurance still excludes conditions an employee already has, and the chronic conditions every insurer excludes, whoever pays the premium.
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