Q. What makes the National Friendly Group Healthcare Deposit Account different to other private medical insurance?
A. Unlike traditional private medical cover, the Group Healthcare Deposit Account has a cash value if your employees don’t claim. That’s because 75% of your monthly premium goes towards the cost of running the scheme – the other 25% goes into your own personal deposit account. From this account your employees pay 10% of any claim. We always pay the majority share.
Q. Are all of my staff eligible to join the Group Healthcare Deposit Account scheme?
A. Members of the scheme must be under the age of 70 and employed by the company that pays the premiums.
Q. What happens when an employee reaches the age of 70?
A. Membership of the scheme ends on an employee’s 70th birthday. At this time, they can choose to keep healthcare cover for life by transferring to an individual account and paying the premiums themselves. From then on, they will have to pay a higher share (25%) of any claim.
Q. Can I extend cover to my employees’ families as well?
A. Yes. There are four types of account that you can set up according to whom you’d like to provide cover for:
- Individual
- Couple – the cost is 2x the individual rate
- Individual + children – 1.5x individual rate
- Couple + children – 2.5x individual rate
Q. What level of cover does the scheme provide?
A. You can choose how much cover your employees have. The maximum level of annual cover is £100,000 medical, £3,000 dental and optical cover, plus £2,000 for NHS overnight stays.
Q. How much is the monthly premium?
A. This depends on your employees’ ages when the plan starts, the level of cover you want and which compulsory top-up you choose (either £10, £15 or £20 a month).
Q. Will the premiums go up every year?
A. No. Unlike other private medical insurance policies, the monthly premiums are fixed for 5 years. If you would like more cover for your employees, monthly premiums can be increased by one premium level per year, per person without further underwirting or alternatively employees can contribute to their personal deposit account to increase the amount they can claim at any time (any money paid in by an employee should remain their money if they leave the scheme).
Q. Why is there a compulsory top-up?
A. In the early years of your employee’s policy, there might not be enough in their personal deposit account to cover their share of a significant claim. Once the money in an employee’s personal deposit account has been used up, the top-up cover provides an extra £30,000 of medical cover for an extra £10 a month, £45,000 for £15 a month or £60,000 for £20 a month. The top-up doesn’t include cover for dental or optical claims.
Q. How much can employees claim?
A. The amount an employee (or covered dependants) can claim depends on the level of cover, sufficient money being in the employee’s personal deposit account to fund 10% of a claim and the level of top-up cover.
Q. What is the employees’ share of a claim?
A. Your employees’ personal deposit account pays 10% of each claim and the Group Healthcare Deposit Account scheme pays 90%. So to work out the maximum value of a claim, simply multiply the personal deposit account balance by ten.
Q. What if there isn’t enough in an employee’s deposit account?
A. The employee will have access to their top-up cover once their personal deposit account is empty to help with claims. If the top-up and the personal deposit account have been exhausted, we'll pay a smaller proportion of that claim on a pro-rata basis.
Q. Can extra money be paid into the personal deposit account?
A. Yes – both you and your employee can pay in extra money on top of the monthly premiums at any time. By building up the balance in the personal deposit account when you or your employees are able to do so, there’ll be more of the chosen level of cover available for a claim. (In order to protect the integrity of the scheme for all members, additional lump sum deposits won’t cover a claim for a complaint known about at the time they were paid in.)
Q. Can employees withdraw cash from their personal deposit accounts?
A. Employees can’t take out money that you, the employer, have paid in. They may withdraw money from their own contributions.
Q. Can I, as the employer, withdraw cash from the personal deposit accounts?
A. No, not while the employee is part of the Group scheme. When they leave the scheme, contributions that you have made still remaining in the personal deposit account revert back to you.
Q. What are the underwriting options?
A. You can choose from three ways to apply for a Group Healthcare Deposit Account, according to the needs of your employees: Full Medical Underwriting, Moratorium and Continued Personal Medical Exclusions (CPME).
Q. Where do I stand with regard to taxation?
A. The premiums are generally eligible for corporation tax relief. If there are controlling directors covered under the scheme, please check the tax position with your accountant or tax adviser. Employees and directors earning £8,500 a year and above (including all expenses and before deductions) will pay tax on your premiums as a benefit-in-kind. If you need assistance or advice in this area you should contact your usual tax adviser.
Q. What happens when an employee leaves the company?
A. When an employee leaves for another job, retires or reaches the age of 70, they have the option to transfer their cover details to an Individual Healthcare Deposit Account. Any money left in their personal deposit account that you have paid in goes back to you, the employer.