How do health insurance exclusions work?

Private health insurance policies cover various types of medical treatment and provide access to services such as 24/7 virtual GP appointments and telephone helplines. You can also access membership benefits, such as a rewards scheme that provides discounts on products and services. Investing in a group health insurance policy covers your whole workforce.

Health insurance policies typically provide core cover, which is available to all members as standard. You can also tailor and extend your coverage by adding optional extras and paying an additional premium.

What do health insurance policies typically include as standard?

Health insurance policies typically include in-patient and day-patient treatment in a hospital, as well as follow-up rehabilitation and cancer treatment. Most health insurance plans also provide some form of out-patient treatment, whether that's diagnostic tests and scans or physiotherapy. Employees needing mental health support can usually access 8-10 counselling or cognitive behavioural therapy sessions.

We've also mentioned access to virtual GP appointments. These are typically available online or by telephone, providing guidance or a referral to another medical professional.

What optional extras are available?

The optional extras available with health insurance policies vary depending on your chosen provider. However, you'll usually be able to extend or enhance your out-patient coverage and mental health support to increase the number of treatment sessions and provide additional treatments. For example, extended mental health insurance can provide access to in-patient psychiatric care as well as counselling.

You can also add coverage for dental and optical check-ups and treatments, which can be a cost-effective way to fund eye tests for employees using display screens. Dental coverage can also save your staff money if they're already paying for private care.

Health insurance exclusions set out the treatment types and conditions that your health insurance policy doesn't cover. Some health insurance exclusions are standard coverage terms, meaning the treatments aren't available to any member, regardless of their medical history.

Other health insurance exclusions vary depending on each employee's medical history.

As we've mentioned, health insurance exclusions can either be part of a policy's standard terms and conditions, or based on an employee's individual medical history. It's worth remembering that health insurance policies change over time, and treatments that were once standard exclusions across the health insurance market are now beginning to be included.

If any treatment types are particularly relevant to your industry or workforce, it's worth shopping around to find the best health insurance policies for your needs.

Standard policy exclusions

Many policy exclusions form part of an insurance company's standard terms and conditions. Some are common across the health insurance market, while others vary by provider. Let's look at some of the standard exclusions you'll typically find on most health insurance plans.

Cosmetic surgery and weight loss treatments

As a general rule, health insurance policies exclude treatments that could be classed as a lifestyle choice rather than a medical necessity. This means that health insurance policies typically don’t cover cosmetic surgery, weight-loss surgery, or other cosmetic treatments.

If you want to support your team in losing weight or developing healthy habits, health insurance companies usually offer free or discounted health assessments. Some membership benefits include discounted gym memberships, fitness trackers and other well-being benefits. However, if employees want cosmetic surgery, they'll need to fund it themselves.

Emergency care

Health insurance policies typically cover routine and planned care, rather than emergency treatment. If your employees have a medical condition or injury that needs immediate attention, they'll need to call an ambulance or head to their nearest NHS accident and emergency department or urgent care centre.

Straightforward pregnancy and birth

Health insurers classify starting a family as a lifestyle choice, so health insurance policies don't cover routine pregnancy and childbirth. Similarly, health insurance plans don't fund fertility treatments or other family planning services such as access to contraception.

However, most health insurance policies will cover pregnancy complications and provide treatment following a miscarriage, ectopic pregnancy or molar pregnancy.

Treatment for addiction

Many health insurance providers exclude addiction treatment, whether an employee struggles with drug or alcohol abuse or another form of addiction. If this is the case for your chosen provider, your staff can still use the policy to access other forms of mental health support. For example, most health insurance policies include access to telephone helplines that offer general guidance on various health problems. These helplines can signpost callers to third-party support services when needed.

However, attitudes to addiction are beginning to change, with some health insurance providers treating addiction as a mental health condition.

Intensive care

Private hospitals typically don't have intensive care units (ICUs), which are highly specialised units treating serious and life-threatening conditions. If an employee needs ongoing treatment in ICU after a serious illness or injury, or high-level monitoring after surgery, they'll need a transfer to an NHS hospital.

Behavioural and developmental conditions

If an employee or one of their children has symptoms of a learning difficulty, or a behavioural or developmental condition such as autism, ADHD or dyslexia, they'll need specialist advice and support. This often involves a multi-disciplinary approach involving a child's school, an adult's employer and support from a GP and mental health services. These conditions often require long-term monitoring that private healthcare isn't designed to provide, meaning ongoing care is typically excluded from health insurance plans.

However, some policies can provide access to an initial diagnosis, which can speed up the process.

Chronic conditions

Chronic conditions are typically permanent and require ongoing treatment and monitoring, as medical treatment can't usually cure them. As we've mentioned, private treatment providers aren't set up to offer this type of care, meaning employees with chronic conditions must seek treatment from their NHS GP and consultant as needed. Private health insurance policies cover acute conditions that will respond to treatment.

Chronic conditions can include the following:

• High blood pressure
• Angina
• Diabetes
• Arthritis
• Epilepsy
• Crohn's disease
• Cystic fibrosis
• Chronic fatigue syndrome

While private health insurance policies don't cover treatment for chronic conditions, they can provide other forms of support. Many policies offer coverage for flare-ups related to chronic illnesses. In addition, if your policy includes coverage for consultant appointments and diagnostic tests, an employee could use these services to investigate their symptoms as an alternative to an NHS diagnosis. They can then switch to receiving treatment at an NHS hospital if their private health insurance doesn't cover it.

Exceptions to standard exclusions

As we've mentioned, private health insurance policies vary in the coverage terms they offer. While the health insurance exclusions we've mentioned used to be standard practice across the industry, this is no longer the case.

Here are a couple of common variations to bear in mind when choosing your private health insurance.

Providers can vary

Private health insurance providers can vary widely in the standard exclusions they apply to their health insurance policies. Some may apply a longer list of exclusions in one treatment area, while offering more generous coverage terms in others. Understanding how these balance out can help you choose the right health insurance for your needs and your team's priorities.

Speaking to a broker for specialist advice can help you understand the pros and cons of each policy and make an informed choice.

Mental health coverage

Many health insurance policies exclude addiction treatment, but some now include these treatments as part of their mental health coverage. Access to rehabilitation or other addiction treatment can vary depending on the coverage your health insurance provides. For example, Bupa's health insurance policies can cover up to 28 days of in-patient psychiatric treatment, which employees can use to treat addiction if needed. Aviva also provides support for addictions, including alcohol and drug abuse, gambling, gaming and social media, as one of the optional extras on their corporate policy for businesses with 250+ employees.

It's also worth bearing in mind that insurers will often classify an ongoing mental health condition as chronic, meaning the policy won't cover it.

Pre-existing medical conditions

Health insurance policies cover new, acute conditions that arise after an employee joins the policy. This means that your health insurance won't cover pre-existing conditions. Your insurance company bases these exclusions on an employee's medical history, so they vary from individual to individual.

What is a pre-existing condition?

Health insurance providers define pre-existing conditions as any condition for which an employee sought advice or treatment within the 5 years before joining the policy. This definition can encompass a course of treatment, an operation, or an appointment or telephone call seeking advice about symptoms.

All exclusions for pre-existing conditions have a two-year moratorium period that begins when an employee joins the policy. If they remain symptom-free during that time, the insurer can often remove the exclusion.

How do insurers know about pre-existing conditions?

The information that insurers gather about pre-existing conditions varies depending on the type of underwriting that applies to your health insurance policy. We'll explain that in more detail shortly. Still, the main distinction is whether your insurer asks for medical information when an employee joins the policy, or seeks information to investigate each claim when it's made.

Underwriting is the process insurers use to determine your premium and any individual exclusions that apply to your insurance policy. Different types of health insurance underwriting affect the information your employees must provide when they enrol in the policy, how your insurer determines which pre-existing conditions to exclude, and the claims process.

Some underwriting types are available with all health insurance policies. These typically apply a moratorium period to each new employee who joins the policy. Others are available only to businesses, often based on a company's number of employees. There are also other underwriting types that you may be able to use if you need to change your provider.

The moratorium period

If your policy has moratorium underwriting or full medical underwriting, it will typically include a 2-year moratorium period. We've mentioned that insurers define pre-existing conditions as conditions for which an employee sought medical advice or treatment within the five years before joining the policy. However, if they stay symptom-free during the moratorium period, your insurer can often remove the exclusion.

When you first buy a health insurance policy, you can typically choose from three main underwriting types, provided your company meets the eligibility criteria. These are moratorium underwriting, full medical underwriting and medical history disregarded underwriting.

If you need to switch from your existing provider to a new insurance company, you may be able to use continued moratorium underwriting (CMORI) or continued personal medical exclusions underwriting (CPME).

Let's look at each type in detail and examine how they affect exclusions for pre-existing conditions.

Moratorium underwriting

Moratorium underwriting applies a two-year moratorium period from the date an employee first joins the policy. It's ideal if your employees typically have straightforward medical histories, as they're less likely to have claims rejected. It also reduces the administrative burden on your staff as they won't have to process a medical history form for each new starter.

However, there are pitfalls. At renewal, your insurer will consider your claims history, examining both successful and rejected claims. A claim can be rejected simply because an employee forgot about a question they asked during an appointment five years ago. If this happens frequently, it can increase your renewal premium.

Medical history information

With moratorium underwriting, a new employee won't need to complete a medical history form or provide any medical information when they join your company scheme. It reduces the amount of onboarding paperwork they must complete, which also means less work for your HR team.

The claims process

If your health insurance has moratorium underwriting, your insurer won't ask for medical information upfront. Instead, they'll examine each claim on a case-by-case basis to see whether any exclusions apply. This can mean that the claims process takes longer and an employee must wait for confirmation that the policy covers their treatment.

Full medical underwriting

As the name suggests, full medical underwriting examines an employee's full medical history when they join the policy. This process can provide certainty for you and your insurer, as they can confirm which exclusions based on pre-existing conditions apply from the outset. It can be beneficial for employees with complex medical histories, as your insurer will examine their full medical history when they join. Full medical underwriting can also reduce your premium, as insurers can carry out a more accurate risk assessment when providing coverage.

Medical history information

Under full medical underwriting, each employee must complete a medical history form upon joining. It means more admin for them and your HR staff, so you should consider the pros and cons when choosing this underwriting type.

Employees should take care to complete the form accurately, as insurers can still investigate claims. Any missing information can result in a claim being rejected, potentially increasing your premium or invalidating your coverage.

The claims process

The claims process can often be shorter, enabling faster access to treatment. Insurers can often approve straightforward claims quickly without needing to investigate every claim fully. This can offer real practical advantages when an employee needs urgent treatment, or if early intervention could dramatically improve the outcome. It can also help to reduce the length of any absence from work.

Medical history disregarded underwriting

Insurers typically offer health insurance plans with medical history disregarded underwriting (MHD) only to businesses with at least 20 employees. Accessing this type of underwriting means that your insurer will disregard all pre-existing conditions, offering comprehensive coverage to every employee regardless of their medical history. Other health insurance exclusions will still apply based on your insurer's standard terms and conditions.

MHD is the most expensive underwriting type, but it has its advantages. You can provide comprehensive coverage to key staff with complex medical histories. There's no need to provide any medical history information, which reduces the admin burden. Insurers can also approve claims quickly, giving staff quick access to medical treatment.

Underwriting when you switch to a new provider

Say you decide to switch to a new health insurance provider because they offer better coverage or a lower premium. Switching may have its advantages, but you also risk adding new exclusions to your policy because your employees have received treatment under their existing coverage. Some employees may also be on the way to having an exclusion removed because they haven't received any further treatment for a pre-existing condition.

Depending on the underwriting type on your current policy, you may be able to switch using continued moratorium underwriting (CMORI) or continued personal medical exclusions underwriting (CPME). It's a good idea to speak to a broker for guidance, as the switching process can be complex. They can also compare policies to ensure your new policy offers the same or better coverage and terms as the existing one.

Continued Moratorium underwriting (CMORI)

CMORI underwriting continues the moratorium period from your previous policy, carrying it forward to the new one. If your previous insurer applied exclusions based on employees' pre-existing conditions, they can remove the exclusion if an employee has no further treatment during the two-year moratorium period. For example, say an employee had physiotherapy for knee pain two years before joining the policy, but they've remained pain-free for the first year of coverage. Another year without treatment could remove the exclusion, but a new policy would mean they'd have to start from scratch and stay symptom-free for another two years. However, CMORI underwriting means they could access treatment after a year if needed.

Continued Personal Medical Exclusions (CPME)

You can only access CPME underwriting if your existing policy has full medical underwriting. It moves the existing exclusions that applied to your policy over to the new one, without adding any further exclusions. It's ideal if employees have received treatment during the first year of coverage, particularly if that treatment is ongoing.

Understanding medical insurance exclusions and how they operate can help you make an informed choice about the best coverage for your team. At Globacare, we offer tailored advice to help you choose the right coverage for your needs. Contact us today for a comparison quote.