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Average Cost of Small Business Health Insurance (2025)
A small business owner typically pays in the range of £26 to £150 per employee for health insurance. To see how health insurance costs vary based on factors like the age and number of employees, as well as the level of cover, we've run some numbers with Bupa, the largest private health care provider in the UK. Here's what we found.
How much does health insurance cost for a small business?
Health insurance for a typical small business costs in the range of £220 - £260 a month for a small business with 5 employees, depending on the level of cover. But what about larger businesses? The chart below shows how total costs change as your business grows assuming your employees are in their early 40s. Obviously, prices rise with the number of employees.
But on a per-person basis, the cost will come down as the number of insured employees rises. In fact, discounts can reach around 33% by 50 employees, as you can see in the following chart.
Average small business health insurance cost per employee
The typical cost of small business health insurance on a per employee basis is roughly £50 a month, but can range from around £26 to £150 a month or more depending on employee ages and the tier of cover. Employees in their 50s cost more than 2X as much to insure as employees in their 20s. Other factors like the excess would also affect the rate.
| Small business health insurance cost, per employee | Age 21-25 | Age 31-35 | Age 41-45 | Age 51-55 | Age 61-65 |
|---|---|---|---|---|---|
| Low tier | £26 | £32 | £49 | £70 | £130 |
| Middle tier | £29 | £36 | £54 | £77 | £142 |
| High tier | £33 | £39 | £58 | £89 | £148 |
For these examples, the low tier plans include lower out-patient limits, less complementary medicine coverage and a smaller network of eligible hospitals, but all include full cancer treatment and the same number of days of mental health cover.
Small business health insurance cost calculator
To calculate how much health insurance might cost for your small business, use the table below to look up rough estimates based on the number of employees and their ages. These figures are estimates for a sample business quoting for a mid-tier policy. Rates could differ by 10% or more for a lower or higher tier of cover.
| Small Business Health Insurance Costs by Number of Employees | Age 21-25 | Age 31-35 | Age 41-45 | Age 51-55 | Age 61-65 |
|---|---|---|---|---|---|
| 1 employee | £29 | £36 | £54 | £77 | £142 |
| 2 employees | £58 | £71 | £107 | £154 | £284 |
| 3 employees | £84 | £102 | £155 | £222 | £409 |
| 4 employees | £108 | £132 | £200 | £287 | £528 |
| 5 employees | £129 | £158 | £239 | £343 | £632 |
| 6 employees | £151 | £186 | £280 | £403 | £742 |
| 7 employees | £171 | £209 | £316 | £454 | £835 |
| 8 employees | £188 | £230 | £348 | £500 | £920 |
| 9 employees | £204 | £249 | £377 | £542 | £997 |
| 10 employees | £218 | £267 | £403 | £579 | £1,065 |
| 15 employees | £318 | £389 | £588 | £845 | £1,555 |
| 20 employees | £406 | £498 | £752 | £1,080 | £1,989 |
| 30 employees | £601 | £736 | £1,112 | £1,597 | £2,940 |
| 40 employees | £789 | £967 | £1,461 | £2,099 | £3,864 |
| 50 employees | £972 | £1,191 | £1,800 | £2,585 | £4,759 |
| 75 employees | £1,436 | £1,759 | £2,659 | £3,820 | £7,031 |
| 100 employees | £1,886 | £2,310 | £3,492 | £5,016 | £9,233 |
Should I buy health insurance for my small business?
Health insurance is a perk that many small businesses are offering to employees now as they compete to offer attractive packages to applicants. While not required, it is a feature that can tip the scales for a potential employee deciding between multiple job offers.
In a similar sense, certain types of small business insurance can attract employees. Any small business hiring a senior manager, director or officer would want to consider buying a directors & officers insurance policy, for example, as this protects these key people from being sued for doing a poor job.
What factors affect the cost of business health insurance?
The most obvious factor is the number of employees, as costs rise with each additional employee. In addition, the age of your employees will affect your health insurance costs as well. Employees in their 60s can cost 5X as much to insure as employees in their 20s. This is not a surprise as older people tend to have more health issues. The level of cover is also a big factor, with premium plans costing 10%+ more than basic plans. This difference in prices across tiers is more pronounced for older employees, whereas there's not a huge price increase for premium plans when insuring young employees.
Note: the figures in this study all reflect an excess of £100 per person per year. The excess is the amount an employee pays towards treatment.
How can you save money on small business health insurance?
Here are some ways to save money on health insurance for your small business employees.
- Excess. Raising the excess (the amount an employee pays towards cover) should lower the insurance rate.
- Reduced outpatient cover. Policies with lower limits of insurance will be cheaper. Plans with unlimited cover will cost the most.
- Hospital access. You may find higher-tier policies offer access to a wider network of hospitals. Going for a smaller network might result in a cheaper rate.
- Discounts. UK health insurers offer discounts from time to time. For example, Bupa was offering 20% off to new customers in 2025. Note, the above prices do not reflect this 20% discount!
Methodology
To learn about the cost of small business health insurance in the UK, we received quotes from Bupa for sample businesses of different sizes, with different employee age profiles. We broke down the data on a per employee basis as well as for a business as a whole. Rates for your small business might vary significantly.