Workplace Health Insurance Claims Reach Record Highs

UK claims on workplace health insurance policies rose by 16 per cent in 2024 against a backdrop of long NHS waiting lists and growing concern that sickness is driving people out of the labour force. The ABI, a trade body representing insurers, said its members processed private medical insurance claims worth £2.6bn for workplace schemes in 2024, the highest on record. In total, including both individual and workplace schemes, they processed medical claims worth a record £4bn, up by 13 per cent from £3.5bn in 2023, or by 9.1 per cent after adjusting for inflation. Even after adjusting for inflation, claims were 12 per cent higher than in 2023 and 32 per cent higher than in 2019. The figures reflect growing demand for employers to offer medical cover as the workforce ages and as employees struggle to access NHS treatment — including for mental health and musculoskeletal conditions that often affect their ability to work, as well as acute illness. Although NHS backlogs in England have begun to improve, there are still millions more people facing long waits for both scheduled and emergency treatment than there were before the pandemic. Official data released earlier this week showed that the number of 16-to-64-year-olds who are not working because of a long-term health condition has risen by about 800,000, to more than 2.8mn, since 2019. This means that while the UK’s overall rate of economic inactivity — the share of the adult population who are neither working nor looking for a job — is roughly the same as in 2019, it is increasingly driven by poor health rather than people taking time out of work to study or look after children. Both ministers and employers say it is crucial to prevent people falling out of work when they become sick, as those who drop out often suffer a long-term loss of earnings, with consequences for the economy and taxpayers. This week, the Department for Work & Pensions said it would roll out a new “Workwell” programme offering people help to stay in or return to work across England, following a pilot in 15 areas. But the government has made it clear employers will need to lead, and largely shoulder the cost of, efforts to tackle ill health in the workplace. The ABI wants its members to play a bigger role in a government-backed expansion of workplace health provision, following a review led by the former John Lewis chair Charlie Mayfield. At present, a handful of employers are trialling new forms of support and funding models that could help make health services more affordable for small businesses. Only a minority of employers currently offer private medical cover to all employees. However, increasing numbers are rolling out lower-cost “employee assistance programmes”, providing advice or access to services such as counselling and physiotherapy. Take-up of medical cover has been rising, however, even as employers pare back other benefits to offset rapid wage growth and higher payroll taxes. The ABI said the number of people covered by health insurance rose 4 per cent to 6.5mn in 2024, of whom 4.8mn were covered by workplace policies. The share of people covered who make claims has also increased, rising to 28.1 per cent in 2024, up from 26.6 per cent in 2023 and 22.9 per cent in 2019, before the pandemic. Rising claim rates have pushed up the cost of providing medical cover for employers, however. A report by Mercer Marsh Benefits, a broker and consultancy, found the median price increase for large companies renewing claims-rated plans in 2025 was 13.5 per cent, while the price of age-rated schemes for smaller companies rose by about 16 per cent. The price increases were also driven by a greater severity of conditions, the rising cost of surgery and a sharp rise in claims relating to mental health, Mercers said.