Health Insurance
6 min read

Why your Small Business Needs to Offer Health Insurance in 2025

From attracting the best talent to reducing absenteeism, here are five reasons why group health insurance is a benefit all small businesses should be offering.

Sam Fromson | Co-Founder & COO of YuLife - April 10, 2025

Whether it’s the battering headwinds from global economic turmoil or trying to part potential customers from their cash in the midst of a cost-of-living crisis, small businesses are under pressure right now. And that’s on top of all the usual stresses—let’s not forget one in four businesses fail within the first year.

In that context, Health Insurance for small business owners might seem like an unnecessary expense—we have a National Health Service, after all, leaving many to wonder if offering private health insurance is worth it. In reality, though, we can all see that the NHS is struggling, and despite plans to improve it, most experts agree it will take time before we see any significant change. 

In the interim, there is an opportunity for small businesses—those with fewer than 50 staff and a turnover of less than £8.5 million—to step up the provision of physical and mental health support and insurance. 

“We know there is a health and wellbeing gap between what the NHS can provide and what employers can offer,” says Katie Howarth, Head of People at YuLife. “By providing health insurance, access to a digital GP, mental health support, and tech that builds healthy habits, employers can go a long way towards supporting the physical and mental health of employees while taking the pressure off the NHS.” 

Here are five more reasons why you should consider offering Group Health Insurance as part of your small business employee benefits package.

1. It helps you hire the best people 

Every small business lives or dies on the quality of its people. After all, in a large organisation you can rely on the bulk of your employees to make up for the shortcomings of a few. In a smaller company, there isn't that wiggle room. 

Yet the phrase “can't get the staff” has never felt so relevant to anyone running a small business today. In today's competitive job market, the best people have the luxury of being selective about where they work. 

Of course, job hunters are going to prioritise pay, but if prospective employers are offering similar salaries, other factors start to come into play. 

A key thing that candidates consider when evaluating job offers is who is offering the best employee benefits package—and Health Insurance is always high up on the list of benefits that people like to see. 

So, it's pretty simple. Offering small business Health Insurance enables you to position yourself as an attractive employer, stand out from competitors and appeal to the best candidates in your industry.

2. It helps you keep the best people

At YuLife, we work with businesses of all sizes. But when you run a small business, you don't have large, well-funded HR departments to take care of recruitment: you pretty much have to manage all of that yourself. 

And it can be time-consuming, expensive, and ultimately very stressful if you can't find the right candidate. So when people decide to leave their jobs, it's not just a pain—it can become a real crisis for your business.

According to data from YuLife’s Workplace Wellbeing Trends 2025 report, more robust health insurance or physical wellness programmes were the third most requested wellbeing support mechanisms (after flexible working and paid wellness days) that employees would most like their employer to offer in 2025.

Offering employee retention benefits not only means your employees feel valued and cared for, but also more engaged, motivated, and productive. Even if offered a better-paying job elsewhere, they'll probably at least pause to think—because the prospect of losing their health benefits will be a real concern.

3. It can give you tax advantages 

In the UK, contributions made towards small business Health Insurance are generally tax-deductible for the business, which can help offset the cost of providing this valuable benefit. So the answer to ‘how much is Health Insurance?’ and how to calculate the cost to your business might be different from what you first thought.

Additionally, employees may receive tax advantages for receiving small business Health Insurance plans through their employer, making it a win-win all around.  

4. It improves the health and wellbeing of your staff 

This might be an obvious one, but it's still worth pointing out. Small business Health Insurance isn't just there for times of crisis, good Health Insurance plans are also a way of providing employees with preventive care and early intervention before minor medical problems become serious. 

In other words, by offering Health Insurance, you encourage your employees to prioritise their health and seek medical attention when needed, rather than delaying treatment due to cost concerns. 

And at a time when it's never been more difficult to get an appointment with a GP and NHS waiting lists are ever-growing, that’s a serious consideration.

“Nobody else is going to step in and tackle this challenge on behalf of employers,” says Brett Hill, Head of Health and Protection at Broadstone, one of the experts who contributed to YuLife’s Workplace Wellbeing report. “That traditional public healthcare safety net that kept the workforce healthy for the benefit of UK employers has gone; it’s not coming back in the near-term, so employers now have to step into that healthcare gap.”

A proactive approach to healthcare can lead to better overall employee wellbeing and reduce the risk of more serious and costly health issues further down the line. From a purely selfish point of view, that means improved performance and reduced absenteeism.

5. It helps to future-proof your small business 

It won’t always be this tough. Eventually, the UK economy is likely to return to growth and you won’t want your small business to be left behind. As your company grows and evolves, the ability to offer competitive employee benefits, including Health Insurance, will become more important. 

By incorporating small business Health Insurance into your benefits package right now, you can establish a strong foundation for a motivated, happy workforce. And that will be the best advert for attracting future new recruits. 

So don't wait until “the time is right”. It's always a good time to offer your employees Health Insurance, even if you're self-employed with just one member of staff. And the sooner you do so, the sooner you'll start to feel the very real and identifiable benefits.

About YuLife

YuLife is working to reimagine the insurance industry by protecting lives, rewarding living and inspiring life. We’re on a mission to transform traditional insurance into a life-enhancing experience each employee will value and use daily. 

How does it work?

Our award-winning app uses behavioural science and game mechanics to reward your people for living well while offering protection in case of crisis. And with our top-rated employee assistance programme, your team gets access to mental, financial and social support, virtual GPs, nutritionists, life coaches and more to help them live their best lives.

Because we believe that your employees should benefit from their insurance from day one — and that wellbeing should be accessible every day, for everyone.

Request a demo for your team today.

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Sam Fromson | Co-Founder & COO of YuLife

Sam has a diverse background in finance and operations. Previously a hedge fund equity analyst and business development lead at Invoice Cycle, Sam’s passion for wellness and finance drew him to YuLife, where he drives operational excellence and strategic growth. His unique blend of experience and values fuels YuLife’s mission to integrate wellness into insurance.