Employer or Company Group Health Insurance Plan is usually a group insurance, which covers all the employees in the organization. Group policies are usually cheaper than individual policies.
Employer or Company Group Health Insurance Plans offer good benefits to employees covered by it. In a country like ours wherein health insurance is still not ‘demanded’ by a large audience, such a scheme helps especially when disaster strikes. The good thing about the scheme is that the ‘cost’ (policy premium) is borne by the employer. So to the employee, the scheme appears ‘free’. Also good is the fact that some schemes offer PED cover (pre-existing diseases, relevant especially to parents if included) from Day 1 of enrollment. What is also appealing is the fact that there is generally no medical test involved when joining.
But even with all this, Company Group Health Insurance plans are not the ideal way to protect yourself and your family from a medical costs. Here are the areas where such a plan will fall short. You can also use this checklist to assess if your company group health insurance plan is good enough for you and your family.
Company Group Health Insurance plans – Are you covered at all?
First thing to do is to check if you are covered by any group health insurance scheme at all. Don’t assume you are. Generally, less than 60%* of all working professionals are covered by a group health insurance plan. Also, all the employees across all levels are not always covered by your employer. Also, the fact that you were covered last year does NOT mean you are covered this year as well. Your company might have stopped the scheme this year to save costs, or for whatever other reason. So do check for coverage.
Extent of the Company Group Health Insurance Cover
Health Insurance cover can range from 1 lakh to 10 lakhs, or sometimes even beyond that. What is the cover that your company offers? Do you think it is adequate. If you are staying in a metro and have access to good healthcare, anything less than 3 lakhs may fall short of requirements during a claim. Of course, if the illness/disease/injury is bigger, even 3 lakhs may not be enough.
Please also note that the extent of cover in your company will most likely not be the same for all employees. This is because such a scheme is treated as a ‘perk’, so higher your role /designation /grade /level, higher will be the extent of your insurance cover in the health insurance plan.
Does it also cover Family and Parents?
Some group health insurance schemes cover family (spouse, children up to age 21) and most do not cover parents, unless your employer voluntarily adds their coverage to the group insurance plan. This comes at a high cost especially if the average age group of those covered is high. So you need to check whether your family and parents are covered. Also, in most cases of health insurance claims, you will realize that it is the parents (because of age-related ailments) who need such cover more that you/your family. If your employer group health insurance scheme does not cover family and/or parents, its use for you could be limited.
You also need to check if the group plan allows you to add a new family member, e.g. if you get married, can you add you spouse into the plan? Or a new-born child?
Does it offer at least all the key benefits?
The variety of such plans in India is extremely high, and to top that, even customization is easily possible especially if groups are large. So you need to check what are the benefits offered by your Company Group Health Insurance plan. Here are some of the points you should definitely check.
- Does it cover all large costs such as doctor’s fees, OT charges, consumables, bed-charges, surgery charges, etc.?
- Does it cover day-care procedures (less than 24-hours hospitalization) as well?
- Does it pay the entire bill or only a percentage of it? i.e. is it a Co-payment (shared payment) scheme, or one with a deductible? e.g. employee pays 20% of the claim amount.
- Are there any waiting periods for specific diseases or PED (pre existing diseases)?
- Does it cover PED with or without an additional charge?
- Does it offer cashless facility for settlement of bills with the hospital?
- How good is the coverage for cashless claim settlement?
- Does it cover pre- and post-hospitalization charges as well?
- Does it cover maternity charges? (if relevant to you)
Better the no. of inclusions in the above list, higher is the cost of the company group health insurance scheme to your employer. For some employers, this could only be about meeting a statutory obligation towards it employees. Therefore, it is prudent for you to check whether your employer has opted to included at least the key benefits in your plan.
Employer or Company Group Health Insurance Plan – does it match up?
Check out this comparison of employer group health insurance plan with individual health insurance plan. You will realize the gaps and the best way to handle health insurance for your family.
|Feature / Situation||Company Health Plan||Separate Health Plan|
|Awareness & Control||Company decides whether to have, what kind, benefits to opt for, etc. They may even choose to discontinue at any time (any you may be unaware of it).||YOU decide everything. The plan is built as per your needs. You know what you get – you are in total control.|
|Level of Cover||Generally up to 3 lakhs. Higher cover is for very senior level employees only.||If you are staying in a metro or the top city/town of your state, having at least a 3 lakhs cover is recommended. You can buy this only with a separate health plan.|
|Members Covered||Generally includes the employee, or sometimes her/his spouse and 2 children. However parents may be excluded.||You can choose to include all members of your family, including parents because at older ages health insurance is an important requirement.|
|Cost||Premium is paid by the company – so it is technically ‘free’.||You pay the premium, so it is an additional cost. But you will realize for yourself based on all other points if there is real value if you buy a separate health plan.|
|Medical Test||Generally, there is no medical test for employees covered in the group.||There would be a medical test if cover opted for is high, or if the member is >45 years of age. A balanced person would see this as a positive rather than an inconvenience.|
|Out-of-pocket Expenses||Company Health Insurance Plan may need you to pay a certain %, e.g. 20% of the expenses in case of a claim.||With a separate health plan, you can choose a ‘no co-pay’ and ‘no deductible’ scheme thereby not needing to pay any share of the claim expenses.|
|Plan Sub-limits||Most companies opt for a plain vanilla cover which has sub-limits, e.g. max per day spend, max per claim limit, etc.||You can choose one of the many health insurance plans available without any sub limits so that you get the full claim amount.|
|No-Claim Bonus||NCB is not offered with a group health insurance plan.||NCB is a winning proposition for separate health insurance. Over time, it increases the level of health insurance cover that you get for the same amount of premium, making it cheaper over time. Also, with progressing age, a higher cover is definitely desirable.|
|Free Annual Medical Check-ups||Generally not applicable in the plan, unless your employer has opted for it.||Mostly offered free of cost for all adults covered by the separate health plan.|
|Switching jobs, loss of job or when starting on your own||Group health cover fails because it ceases when you are no longer an employee with the company.||A separate health insurance plan continues irrespective of your employment status. This is a very important consideration.|
|Retirement||Almost all group health insurance benefits are available only till retirement. These stop completely after that. Trying to buy a separate health insurance plan after 60 is almost impossible since you are highly likely to be suffering from some illness and therefore not eligible for it till the end of your life!||An individual plan goes on till the end of your life. In fact, this is the period when a claim is also more likely and you most need the insurance cover.|
|Section 80D benefit||There is no tax benefit of Section 80D.||Your taxable income is reduced to the extent of health insurance premium that you pay every year. This reduction can be as high as 60,000 per annum. This is also applicable for renewal premiums. It also includes premiums paid for your spouse, children and parents, and even cost of medical check-up. With Section 80D, your health insurance plan can become absolutely free!|
Company Group Health Insurance Plan – Changing Times
Employers are facing pressure on health insurance benefits because of rising costs, which in turn is because of the unfavorable (>100%) claims ratio that health insurance companies are having to bear on their group health insurance portfolios. As per the TW 2015 Asia Pacific Benefit Trends Survey**,
- Only about 44% of Indian companies offer group health cover as an employee benefit
- Most companies are facing the onslaught of rising health costs through increased cost of health-related employee benefits – mainly group health insurance cover.
This is already leading to employers cutting corners to afford a reasonable group health insurance cover, such as…
- reducing the health insurance coverage, e.g. excluding parents from the cover, excluding spouse and children, etc.
- reducing the level of cover, e.g. from 5 lakhs to 3 lakhs.
- asking employees to co-pay the premium (20% share)
- shifting to a plan with sub-limits on room-rent, lower coverage of illnesses, and limited PED coverage, etc.
Some have even adopted a combination of two or more of the above to reduce their employee benefits bill or retain it at the same level, when under cost pressure.
MintWise recommends the following approach.
The key advantages of this approach would be as follows.
(1) You are covered lifelong because most policies are renewable for life.
(2) Any PED waiting periods are covered and there is absolutely no kind of exclusion of illness/disease.
(3) It is cheaper as well because with No-Claim Bonus, your health cover keeps going up for minimal change in premiums.
** Towers Watson 2015 Asia Pacific Benefit Trends Survey results published in Oct 2015