Employee Retention, Attraction, and Satisfaction: The Benefits of Group Health Insurance


Employee Retention, Attraction, and Satisfaction: The Benefits of Group Health Insurance

Group health insurance has several benefits, such as health insurance coverage in case of accidents, illness or diseases, daily cash benefits, coverage of organ donor expenses etc. In addition to these basic benefits, a group health insurance policy would also provide an additional advantage to the employers in the form of increased employee retention, new talent attraction and employee satisfaction. In developed countries such as America, Canada, Europe etc., employees stress the group health insurance coverage instead of the Salary as it is very difficult to survive in these countries without a valid health insurance plan. One could go bankrupt and become homeless if they do not have a proper health insurance plan. In developing countries where medical inflation is high, employees also place adequate weight on the group health insurance coverage offered by the employer as a part of the employee benefits.

Let Us Understand The Benefits of Group Health Insurance That Are Related to The Employees:

Employee Retention:

The major benefit of group health insurance is increased employee retention. Major costs are incurred to recruit, train and get employees on board. It would be costlier for an organization to recruit new employees when compared to retaining employees. So, employee retention is important to the organization’s growth, which the group health insurance plan can achieve. Group health insurance can help retain employees, particularly those in their mid-career and later career stages.

In most cases, mid and late-stage employees do not want to take risks with new organizations and prefer to stay with their existing ones. It is important to note that the employees in these career stages are prone to lifestyle diseases and other illnesses and are, therefore, highly dependent on health insurance plans. In developed countries, it is found that group health insurance can help employee retention for organizations, and it is expected to be the same in developing countries as well.

Employees requiring health insurance coverage would prefer to stay in their current organizations if given the health insurance that suits their requirements. For example, an employee might need health insurance coverage for their parents as the parents are finding it difficult to get a health insurance plan from the market. In such cases, employees would like to stay with the organizations that provide them the health insurance benefits that suit them. Many parents tend to plan families depending on the kind and extent of coverage offered under the maternity plan of the company.

Employee Attraction:

The other advantage of group health insurance is that it can help to attract talent to an organization. For example, consider an employee willing to cover their parents under a health insurance plan but cannot get proper coverage. In such cases, employees would be willing to shift to an organization that could offer health insurance coverage to their parents, keeping other factors constant. This scenario could be seen among the lower-level employees as they prefer a group health insurance plan. This is because their salaries are minimal, and affordability also plays an important role in health insurance purchases. It would not be possible for lower level employees with salaries less than Rs. 40,000 to buy an individual health insurance plan with Rs.10 Lakh sum insured. Such employees would be happy to join an organization that can provide them with group health insurance coverage for employee benefits. The level of attraction of entry-level new talent also depends to a certain extent on an organization’s group health insurance policy. Employers nowadays are marketing the employee benefits offered by them so that they can get the right talent for their organization. 

Again, coming to the same example of maternity benefits, some couples switch jobs based on the kind and extent of coverage prospective employers provide.

Employee Satisfaction:

The other benefit of a group health insurance policy is employee satisfaction. Employee satisfaction is a combination of various factors, among which employee benefits are important. Any employee who goes through the claim process in a group health insurance process would be highly satisfied with the organization. The policy would have helped the employee save much money that could have been incurred on the treatment. On the other hand, the group health insurance coverage would also have helped the employee escape from the burden of debt as the group health insurance settled the claim. Employee satisfaction also plays an important role in the organization’s attrition rate; it can be seen from various studies that employees who are not satisfied with the organizational culture would leave the company. In addition to the culture, various factors contribute to dissatisfaction, such as the perks, salaries, nature of work etc., and the degree of contribution varies from one factor to another. Employee satisfaction also depends on the support provided by the organization at the time of claim settlement, as the claim would be settled based on the approval provided by the organization. Organizations have been focusing on the group health insurance claim service offered to their employees to address this issue.

Health Reimbursement Arrangements:

The other benefit of group health insurance is that employees can avail reimbursement in cases where they cannot avail of cashless claim settlement service. The reimbursement must be processed through the organization, which must provide approval and other necessary documents to prove that the employee is still active with the organization at the time of the claim. It is important to note that one should give adequate support and education to their employees regarding the group health insurance claim settlement process. Some employees might go for reimbursement if they do not know the cashless claim settlement facility. In such cases, the insurance company would apply co-payment in the claim if they tend to avail of the reimbursement facility in-network hospitals. Employers arranging for proper training and information on group health insurance for their employees stand to benefit from the employee satisfaction that could be obtained during the claim settlement process.

Health & Wellness Perks:

Group health insurance provides other wellness services, such as arranging health camps and eye checkups, and some insurance brokers, such as Ethika Insurance, extend a red carpet claim settlement service. It is important to note that wellness services, also known as value-added services, are provided by insurance brokers mostly as a part of their service to the customers who take the group health insurance plans from them. These wellness perks would be available without additional cost to the customers availing group health insurance plans from the insurance brokers. The wellness perks would help the customers understand their health conditions and take preventive measures accordingly. It would also help insurance companies to make future predictions on the occurrence of the claims. Insurance companies would understand the level of claims that could arise and plan accordingly by setting aside the required amount to be settled as part of the claim settlement.

For more information on the benefits of group health insurance plans, please visit our website, Ethika Insurance, and get the complete details from our health insurance experts.

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Susheel Agarwal

Namaste. I'm Abhinay Nedunuru, a Fellow of the Insurance Institute of India with a passion to make insurance simple and crisp. I write on insurance and investment. I have a passion for teaching and training in particular to insurance. I'm currently doing my PhD from IIM in Management.