A 5-person company typically pays around £3,400–£4,500 a year for group health insurance — roughly £57–£75 per employee per month on mid-range cover, with young teams from nearer £38 a head. Schemes start at 2 employees, so 5 qualifies comfortably; expect moratorium underwriting with no health questionnaires, and group rates 10–30% below individual policies.
- ✓Budget around £3,400–£4,500 a year for five people on mid-range cover.
- ✓Moratorium underwriting is standard at this size — no health questionnaires to complete.
- ✓Mixed director-and-staff tiering is normal: comprehensive for directors, core for the team.
The 5-person budget: what the numbers look like
Group health insurance prices at £35–£110 per employee per month depending on ages, postcode and cover level, with the UK average around £57. For five people, that maths lands most companies at roughly £3,400–£4,500 a year for sensible mid-range cover — a young team on core cover can come in nearer £2,300, and a fifty-something director group on comprehensive terms can push past £6,000. Insurance premium tax at 12% is included in all quoted premiums.
| 5-person team profile | Cover shape | Indicative annual cost |
|---|---|---|
| Young team (20s–30s), core cover | Inpatient + capped outpatient, digital GP | £2,300–£3,300 |
| Mixed ages, mid-range | Full diagnostics, therapies, mental health cover | £3,400–£4,500 |
| Mixed ages, comprehensive | Full outpatient, low excess | £4,500–£6,600 |
| 2 directors comprehensive + 3 staff core | Tiered | £3,500–£5,000 |
Group rates typically run 10–30% cheaper per head than five individual policies, and the company premium is generally an allowable expense for corporation tax. Our business health insurance cost guide covers every lever behind these numbers.
Why five is a sweet spot
At five people, every absence is a fifth of the company. UK employees average 9.4 sick days a year; a long absence — someone waiting out the NHS trauma and orthopaedics median of 14.1 weeks, or the 9.3-week mental health median — has no slack to disappear into. The NHS is brilliant. The waiting isn't, and a 5-person company feels every week of it.
Five is also where the benefit starts paying for itself in hiring. Health cover is consistently the most-valued voluntary benefit among UK employees, and only around 31.5% of employers offer it — almost none at the 5-person scale. A micro-company offering private medical cover reads as established and serious to the candidate choosing between you and a bigger firm.
The micro-scheme playbook: setting it up
Setting up a 5-person scheme is genuinely simple — usually a week from quote to cover. The playbook:
- List the members. Names, dates of birth, postcodes. Directors on payroll count; contractors and freelancers don't qualify.
- Pick the cover shape. The big decisions are outpatient limit (full, capped at £500–£1,500, or none), excess (£0–£250 is typical), and hospital list. Protect outpatient cover first — it's where diagnostics and physio live.
- Compare across insurers. Bupa, AXA Health, Aviva, Vitality, WPA and The Exeter all quote at this size, and the same team can price 30% apart between them.
- Accept moratorium underwriting. Standard at this size: no health questionnaires, conditions from the last five years excluded until two years pass symptom- and treatment-free.
- Sort the admin once. Direct debit from the company, members added or removed as people join and leave, one renewal a year.
There's no obligation to cover all five — you can insure directors only, or everyone past probation — but eligibility must follow objective criteria (role, service) applied consistently, not individual picking. Adding family is optional per member: partners and children can usually join at the employee's tier, with the extra premium either paid by the company (a larger benefit in kind) or deducted from the employee's pay.
Compare quotes for your 5-person company
Mixed cover: directors and staff on different tiers
The most common 5-person structure isn't uniform cover — it's two tiers: comprehensive cover for the director or founder pair, core-to-mid cover for staff. Insurers handle this routinely; each tier prices separately and the benefit-in-kind value follows each member's actual tier.
It's worth doing deliberately rather than apologetically. Directors typically carry the highest key-person risk and are often older (pricier, but also likelier to claim), so weighting spend toward them is rational. Equally, giving staff a real tier — full diagnostics and mental health cover, even with a capped outpatient limit — keeps the benefit meaningful for retention rather than a directors-only perk. Our director health insurance maths guide runs the company-vs-personal numbers for the top tier.
Tax and the fine print at this size
The tax shape for a 5-person Ltd: premiums are generally an allowable expense for corporation tax; each covered employee (including directors) pays benefit-in-kind tax on their cover's value — reported via P11D until the April 2027 payrolling change — and the company pays Class 1A National Insurance at 15% on the benefit. For a £57-a-month member, the BIK typically costs a basic-rate taxpayer around £11–£14 a month in extra tax; still far below the £80-ish personal-policy alternative.
The fine print worth reading: how the moratorium treats each member's recent medical history (see our underwriting guide), whether the outpatient limit is per person or shared, and what happens at renewal — small schemes reprice on age and claims each year, and a bad year can move the premium. Comparing at renewal is as valuable as comparing at setup, and switching insurer with continued moratorium terms is usually straightforward at this size.
Frequently asked questions
How much does health insurance cost for a 5-person company?
Typically £3,400–£4,500 a year for mid-range cover — about £57–£75 per employee per month. A young team on core cover can pay nearer £2,300 a year; older teams on comprehensive cover can exceed £6,000. Ages, postcode, excess and outpatient limit set the price.
Is 5 employees enough for a group health insurance scheme?
Comfortably — group schemes start at just 2 employees, so a 5-person company qualifies with every major insurer, including Bupa, AXA Health, Aviva, Vitality, WPA and The Exeter. Group rates typically run 10–30% cheaper per head than five separate individual policies.
Do employees at a 5-person company need medicals to join?
No. Schemes this size are set up on moratorium underwriting: no health questionnaires or medicals. Instead, conditions from the past five years are automatically excluded until two years pass without symptoms, treatment or advice — after which they generally become eligible for cover.
Can a 5-person company give directors better cover than staff?
Yes, and it's the most common structure: comprehensive cover for directors, core or mid-range for staff. Insurers price each tier separately, and benefit-in-kind tax follows each person's actual tier. The rule is that tiers must be defined by objective criteria like role, applied consistently.
Does a 5-person company have to cover all five employees?
No. You can cover directors only, or set eligibility rules such as completing probation — as long as the criteria are objective and consistently applied. Many schemes start with two or three members and add the rest later; the minimum for group pricing is 2.
Is health insurance tax deductible for a 5-person limited company?
Generally yes — premiums are normally an allowable expense for corporation tax. Each covered person pays benefit-in-kind tax (via P11D until the April 2027 payrolling change) and the company pays Class 1A NIC at 15% on the benefit value. This isn't tax advice.
What happens to a 5-person scheme's price at renewal?
It reprices annually on ages, medical inflation and sometimes claims. Small schemes can see meaningful jumps after a heavy claims year, which is why re-comparing insurers at renewal matters as much as the initial comparison — switching with continued moratorium terms is usually possible.
Is group cover for 5 people cheaper than everyone buying their own policy?
Usually, yes — group rates run 10–30% below equivalent individual cover, the company premium is generally corporation-tax deductible, and employees pay only benefit-in-kind tax rather than the full premium. An average adult personal policy runs about £80 a month; group members typically cost the company £57–£75.
How quickly can a 5-person company set up health insurance?
About a week from quote to live cover is normal. You need names, dates of birth and postcodes for the five members, a decision on cover level and excess, and a company direct debit. No medicals or health questionnaires are involved at this size.