Traditionally, most SME private medical insurance (PMI) schemes have excluded pre-existing conditions. This is largely because offering cover without underwriting i.e. without medical checks, significantly increases both the cost and the risk of claims. Historically, insurers only offered medical history disregarded (MHD) underwriting to schemes with 20 or more employees, but that’s changing.
We’re now seeing insurers offer MHD terms to schemes with as few as 15 members, and more businesses are starting to adopt this type of underwriting. So, what’s driving the shift? In this blog article we explore the key reasons.
1. Access to NHS treatment is more challenging
Employees with pre-existing conditions often find they can’t get NHS treatment as quickly or easily as they used to. If their company’s PMI scheme excludes those conditions, they’re left without timely access to care. This can result in employees either working while unwell or taking extended time off while they wait for NHS treatment, neither of which is ideal for business continuity or employee wellbeing.
2. Transfer terms are tightening
Previously, employees moving from one employer’s insured scheme to another could typically transfer their cover without further medical declarations. A simple membership certificate was often enough to preserve their terms. However, we’re now seeing a change in attitude from insurers. Many now ask medical questions during transfers, increasing the likelihood of exclusions being applied. This poses a challenge for employers looking to attract top talent, particularly where senior hires may find themselves without cover for existing health issues.
3. Simpler, faster claims process
With traditional underwriting, any claim made shortly after joining might trigger a check on whether the condition was pre-existing. This often involves the insurer contacting the member’s GP, causing delays and frustration. MHD underwriting eliminates that step, resulting in a smoother, more efficient claims experience for both the employee and the employer.
Things to consider with medical history disregarded underwriting
Of course, offering cover for pre-existing conditions does come at a cost. MHD underwriting typically increases premiums and overall claims exposure. That’s why we recommend implementing clear scheme rules to keep things fair and sustainable:
- Limit join windows – Employees (and their dependants) should only be allowed to join when they first become eligible or at annual renewal.
- Discourage selective joining – Without controls in place, employees might delay joining the scheme until they need treatment, which undermines the health of the overall scheme.
Is medical history disregarded right for your business?
Making the move to MHD underwriting can be a valuable investment in employee health, recruitment, and retention. But like any benefit decision, it needs careful thought and the right support. At Bespoke Benefits, we can help you weigh up the options and put the right framework in place to protect your business and your people.
Want to discuss whether MHD could work for your scheme?
We can help you choose the right private medical scheme for your business, get in touch with a member of our team to find out more about the various options.
This article is for informational purposes only and does not constitute financial, medical, or legal advice. The information provided reflects general trends and insights as of the date of publication and may not apply to all circumstances. For private medical insurance or employee benefits, we recommend consulting with a qualified professional or insurance advisor.
