A benefit your team actually values, and one you can afford

Employee group schemes NZ, common questions.

Quick answers to what New Zealand business owners ask us most. Something not covered? Give us a call.

• What is a group insurance scheme in New Zealand?

  A group scheme is a single arrangement with an insurer that covers a defined group of employees – typically health cover, life cover, and sometimes income protection or trauma. Because the insurer is underwriting a group rather than individuals, entry is usually simplified and cover is arranged and administered centrally by the employer rather than by each staff member.

• How many employees do we need to start a scheme?

  It varies by insurer and product. Some health insurers will consider small employer schemes from a handful of eligible staff, while more generous underwriting concessions and pricing generally arrive as the group grows. We check current appetite across insurers rather than assuming – minimum sizes change.

• What does simplified underwriting actually mean?

  On many group schemes, employees who join at the outset or within a set window of starting employment can be accepted without full individual medical underwriting, or with a shortened set of questions. Pre-existing conditions may still be excluded for a period depending on the policy. It's genuinely valuable for staff who would struggle to obtain cover individually.

• Who pays – the employer or the employee?

  Both models are used in New Zealand. Fully employer-funded schemes are the strongest retention tool; subsidised schemes split the cost; and voluntary schemes let staff buy at group rates with the employer simply facilitating access. Many employers start voluntary or subsidised and increase their contribution over time.

• Is employer-paid insurance a fringe benefit?

  Generally, where an employer pays premiums for cover that benefits the employee or their family, the premiums are deductible to the employer but subject to fringe benefit tax. Inland Revenue's published position on employer-arranged term life cover for the benefit of an employee (QB 15/06) is that premiums are deductible and FBT applies, while a death benefit paid to the employee or their estate is not taxable income for them. The treatment differs where the business itself is the beneficiary, as with key person cover. Confirm your position with your accountant before setting up a scheme.

• Can employees keep their cover if they leave?

  Often yes. Many group policies include a continuation or transfer option allowing a departing employee to move onto an individual policy without new medical underwriting, usually within a set period after leaving. That option matters, and it's worth checking before choosing an insurer.

• Does group health insurance cover pre-existing conditions?

  It depends on the scheme. Some larger group health schemes offer broader acceptance than an individual application would, but pre-existing conditions are commonly excluded either permanently or for a stand-down period. The details vary between insurers and by group size, so this is one of the main things to compare.

• Why do employers offer health insurance in New Zealand?

  Two reasons. It's a visible, valued benefit that helps attract and keep staff in a tight labour market, and it gets people treated faster – reducing the length of absences and the cost of covering them. For roles where an absent person can't be easily replaced, faster access to surgery has a direct operational value.

• Can we include contractors or only employees?

  Most schemes are built around employees who work a minimum number of hours, but some insurers will consider long-term contractors, working directors and shareholder-employees. Eligibility rules need to be defined clearly at the outset so there's no argument about who is covered at claim time.

• How much administration is involved?

  Less than most employers expect. Cover is arranged under one master policy with one billing arrangement, and we manage the joiners, leavers and annual renewal with the insurer. We also help you communicate the benefit to staff, which is the step most often skipped – an unused benefit doesn't retain anyone.