Rising business costs are putting employee health cover at risk, with low-cost solutions more important than ever

• Seven in 10 businesses say rising costs may force them to cut back on employee health benefits, according to new data from health benefits provider Simplyhealth.

• The crunch comes as the majority of employers (73%) say they feel a greater responsibility to look after employees’ health due to the NHS crisis.

• To help businesses better support their workforce’s health, Simplyhealth has launched a new product range, with access to 24/7 virtual GP, mental health and physio support – from just £3 a month.

  
  

Rising business costs are putting pressure on businesses’ ability to provide adequate health cover, according to new data from health benefits provider Simplyhealth, with seven in 10 (71%) businesses saying they might have to make a trade-off between providing employee health benefits and other priorities.

Economic uncertainty was the top external factor impacting businesses – affecting nearly half (49%) of those surveyed, with national insurance increases (39%) announced during the Autumn Budget being the second most pressing reason.

Despite the financial pressures, a growing number of businesses (73%) say they feel greater responsibility to look after the health of their employees in the wake of the NHS crisis, up by 3% from June 2024 (70%).

The findings come as 2.8 million people are currently out of work due to long-term sickness in the UK[1] and with NHS waiting lists standing at nearly 7.5 million in December 2024.[2]

To support businesses to offer critical health benefits for employees in the wake of budget concerns, Simplyhealth has launched a suite of new products to help make healthcare simple, affordable and accessible to the whole of the workforce – starting from just £3 a month for access to 24/7 virtual GP, mental health and physio support.

The new range of products – which all cover pre-existing conditions (unlike traditional private medical insurance) – gives employers flexibility by providing them with a one-stop shop to build a health benefits package for their employees, so they only pay for the specific services they need. Built with simplicity front and centre, the services are easy for employees to use through a single app and without the need for employer approval, and are either free at the point of access, or claims are paid within three days.

When employers were asked what’s important to them in providing health benefits, the top priority was how easy they are for employees to use (61%).

Employers’ top concerns around offering health benefits were fears that employees wouldn’t use them (59%) and cost, with seven in ten (72%) wanting to offer more health benefits but worrying it’s too expensive. Nearly six in ten (57%) employers were also worried about duplicating health benefits, and over half (54%) found some health benefits complicated to understand.

Employees said simplicity was the factor most likely to make them use health benefits (37%), followed by speed of access (36%), and cover for pre-existing conditions (22%).

The top three advantages reported by employers for providing health benefits were improving employee health and wellbeing (61%), improving morale / staff happiness (58%), and employee retention (57%).

Of those employees who weren’t offered health benefits, nearly seven in ten (68%) said having health benefits would help them take better care of their health, nearly half (48%) said it would make them take fewer sick days, and over half (54%) said that it would make them more productive at work.

[1] Office for National Statistics, Economic inactivity by reason (seasonally adjusted)

[2] In December 2024, the waiting list stood at 7,463,403 consisting of around 6,235,352 individual patients waiting for treatment in England, British Medical Association (BMA), NHS backlog data analysis