No — there is no legal duty to provide private health cover at all, and you can offer a scheme to a defined group, as long as you do not discriminate unlawfully.

How it actually works

Private medical insurance is a voluntary benefit, not a legal requirement. A business does not have to provide it, and if it does, there is no rule that it must cover every member of staff. This is where it differs sharply from statutory obligations like the NHS or workplace pensions.

Schemes are usually built around a defined category — all employees, or a tier such as directors and senior managers. Insurers may ask for a minimum level of take-up within whatever category you choose, because a scheme that only the people expecting to claim join is one they cannot price fairly. Setting a clear, objective eligibility rule keeps the scheme sound.

The real limit is discrimination law. You can draw the line by objective factors like role or length of service, but you cannot draw it on a protected characteristic — age, sex, disability, race and the rest. An eligibility rule that in effect excludes staff on one of those grounds risks an equality claim, even if that was not the intention.

So the practical answer is that you have wide freedom over who is covered, exercised within equality law. Apply whatever rule you set consistently, write it into the benefit terms, and let a broker structure the categories so the scheme is both compliant and affordable.

Questions to put to the insurer or broker

  • Can I run a scheme for directors or senior staff only?
  • Is there a minimum take-up I need within the group I choose?
  • Does my proposed eligibility rule create any discrimination risk?

Related questions

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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