Businesses would often be confused when deciding the health insurance for their employees. It would be difficult to decide whether to go with group health insurance or individual health insurance. Group health insurance has certain benefits, such as customization of policy, one policy for all, no sub-limits, no co-payments, no restriction on the number of people, no waiting periods, etc., compared to individual health insurance. Individual health insurance has certain benefits such as individual policy, independent of employer, sum insured selection, add-on selection, including parents and family members, etc.
What’s on this page?
Here’s How The Two Stack Up Against Each Other:-
| Description | Group Health Insurance | Individual Health Insurance |
| Sum Insured selection | Sum insured in group health insurance would be decided by the employer. Different sum insured options can be chosen for different employees based on their grade pay or job role. | Sum insured in individual health insurance is decided by the insured without the need to depend on the employer. Family floater option can be chosen in which the sum insured would be floating among all family members or individual sum insured can be chosen for each insured member. |
| Limit on No.of members | The minimum number of members to purchase a group insurance policy is 7 and there is no limit on the maximum number of members to enroll under the group health insurance plan. | The minimum number required in individual health insurance is 1 and the maximum number depends on the type of plan and the insurance company. The relationships that an Insurer would permit would vary for different insurers. |
| Family member inclusion | Family members cannot be included in group health insurance without the approval from the employer. Family members are also not included in an employee-only policy. The decision to include family members is taken by the employer. | Family members can be included in the policy at the time of purchasing the policy. While mid term addition of members is not allowed, the Insured can add the family member at the time of renewals. |
| Add-on selection | Add-ons can be selected only by the employer while taking the policy. Having add-ons would increase the overall premium payable under the policy. | Add-ons can be selected by the insured at the time of taking the policy.or at renewal. Inclusion of add-ons comes with additional premium. |
| Maternity Cover | Maternity cover can be included in the group health insurance policy based on the decision of the employer. | Maternity cover is mostly an add-on and requires payment of additional premium. Insured can decide on purchasing the cover if deemed necessary. |
| Renewability | The decision to renew group health insurance lies with the employer. Employers can decide to renew the policy on “as is” basis or make changes to the policy or decide not to renew altogether. | The decision to renew the individual health insurance policy is with the insured and he/she can decide to renew the policy on “as is” basis or make changes to the policy or decide not to renew altogether. |
| Co-payment | Co-payment is not mandatory but can be chosen to reduce the premium outgo. Group health insurance policy can be customized to decide on the co-payment percentage which would bear an effect on the premium. The decision to opt for co-payment is with the employer taking the group health insurance policy. | Co-payment is mandatory in certain health insurance plans and in the plans where it is optional, the decision to opt rests with the insured. Insured can decide on the percentage of copayment in the individual health insurance policy. Co-payment would be mandatory in case of senior citizens, people having extreme health conditions and high claim ratio in the past. |
| Sub limits | The sub-limits for certain diseases can be chosen by the employer in group health insurance which is not mandatory. The sub-limit options vary from one insurance company to another. | Sub-limit is mandatory in certain health insurance plans and in the plans where it is optional, the decision to opt rests with the insured. Insured can decide on the option of sub-limit in the individual health insurance policy. Sub-limit might be made mandatory in case of senior citizens, people having extreme health conditions and high claim ratio in the past. |
| Premium paid by | In a group health insurance policy the premium is paid by the employer to the insurance company. Premium sharing can happen in group health insurance where the employees would share a percentage of premium and the rest would be contributed by the employer or the entire premium may be contributed by the employees. In certain cases the entire premium in group health insurance would be contributed by the employer. | In individual health insurance plans, the premium is paid by the insured. The premium sharing option is not a consideration in individual health insurance as the members would be from the same family. Insured need not depend on the employer for payment of premium and renewal of policy unlike group health insurance. |
| Premium calculation method | Premium is calculated based on the age of the members, sum insured required, coverage selected and number of members. Premium would be high if; there are more older people than younger people, high sum insured is selected, more add-ons are selected and more members are present. Premium also depends on the type of policy; family floater or individual sum insured. | The premium in an individual health insurance plan is calculated on the basis of the age of the elder member, sum insured type; family floater or individual, add-ons required, and the total number of members in the policy. The basis of premium calculation would be the eldest member of the family included in the policy. Family floater premium is less compared to individual premium. |
| No. of policies | A single policy is issued. This reduces their administrative burden on the insurer. This also makes it easy to coordinate during claim settlement from multiple employees. It would be cumbersome for the business to maintain the individual health insurance plans of all the members which might include their family. | Insured can decide to include all the family members in a single policy or take multiple policies. One can take a policy for self, spouse and dependent children and another policy for dependent parents depending on the needs and requirements. |
| Addition/Deletions | Additions and deletions under the group health insurance would happen if any new employee has joined or an old employee has left the organization due to superannuation or death or resignation. Addition could also happen in case of a special event such as marriage or child birth. The decision to make additions or deletions to the group health insurance rests with the employer. Addition of members requires a pro-rata premium to be paid whereas deletion of members comes with a refund of pro-rata premium. | Addition and deletions in individual health insurance would be necessitated only due to a special event such as marriage or child birth. Apart from this one cannot add existing family members during the policy period. Any missed out family members can be added only at the time of renewal. The decision to make additions or deletions to the individual health insurance rests with the employer. Addition of members requires a pro-rata premium to be paid whereas deletion of members comes with a refund of pro-rata premium. |
| Value added services | Group health insurance comes with certain value added services such as wellness benefits, check ups etc. Some Insurance Brokers like Ethika insurance broking also offer value added benefits such as red carpet claim assistance, employee engagement, employee happiness programs.These are aimed at increasing the happiness and satisfaction of employees. | Individual health insurance comes only with value added benefits such as wellness benefits which includes addition of points for engaging in fitness activities and these points can be used to redeem in lieu of money at the renewal. Apart from this there are no other value added benefits for individual health insurance plan customers. |
| Pre-existing waiting period | Group policies give you the option of waiver of all pre-existing diseases waiting period. Employees under such policies can claim from day 1 without the need to wait for a certain period of time. This provides incentive to the employees or their family members with already existing conditions who can continue their treatment under the group insurance plan. | Pre-existing waiting periods in individual health insurance plans can range from 1 year to 4 years based on the type of plan and the insurance company. One needs to wait for the aforementioned period before availing the health insurance claim. There are some health insurance plans which offer pre-existing waiting period reduction on payment of additional premium but there would be a minimum waiting period of 1 year. |
| Specific disease waiting period | Group policies give you the option of waiver of all specific disease waiting periods. Employees who are the members of the policy can claim from day 1 without the need to wait for a certain period of time. | Specific disease waiting periods in individual health insurance plans range from 1 year to 2 years based on the type of plan. Insured customers are expected to wait for a certain period before making the claim. Specific disease waiting periods can be reduced by purchasing add-on with payment of additional premium. |
| Initial waiting period | Most group policies do not have an initial waiting period. Employees can claim without having to wait for the first 30 days after taking the policy. | Initial waiting period in individual health insurance plans is 30 days. It cannot be reduced even on payment of additional premium. Initial waiting period would be applicable to all the hospitalizations relating to diseases and illnesses except for accidents. |
| Maternity Waiting period | Waiting period for maternity is generally waived in group policies. | Individual health insurance plans have a maternity waiting period ranging from 9 months to 4 years. One can reduce the maternity waiting period to 9 months by purchasing add-ons. |
| Income tax exemption | Group health insurance plans provide income tax exemption for employers. Employers can claim the exemptions by showing the expenses incurred under the employee benefits section. These can be claimed as a business expense. | The premium paid under individual health insurance plans is eligible for income tax exemption under the Section 80D of income tax. One can claim up to Rs.1 Lakh under the Income tax towards the health insurance premium paid for self, spouse, dependent children and dependent parents. |
| No claim bonus | Group health insurance does not carry any no claim bonus even if there is no claim in the previous policy period. Insurers may consider a reduction in premium based on the claim ratio but there is no concept of no claim bonus in group health insurance policies. | Individual health insurance plans have a no claim bonus in the form of sum insured addition for every claim free year. No claim bonus ranges from 10% to 50% of the additional sum insured for every claim free year. No claim bonus may be reduced at the time of renewal by a certain percentage it has grown in case of a claim during the previous year. |
| Cashless Claim Settlement | Cashless claim settlement facility is available in all the network hospitals. Cashless approval requires the confirmation from the employer to verify the employee details. Health cards are provided to all the insured members to avail cashless claim settlement facility. | Cashless claim settlement facility is available in all the network hospitals. Insured need to provide details such as health insurance policy or health card to avail cashless facility. |
| Reimbursement Claim settlement | Reimbursement claim settlement would be done in case of treatment undertaken at a non-network hospital. If all the required documents are submitted, then the claim would be processed within the stipulated time. | Reimbursement claim settlement would be done in case of treatment undertaken at a non-network hospital. If all the required documents are submitted, then the claim would be processed within the stipulated time. In case of a reimbursement claim from a network hospital, there would be a co-payment, unless a valid reason is provided. |
| Policy Period | Group health insurance plans are usually offered for a 1 year period after which they have to be renewed. | Individual health insurance plans are offered from 1-3 year periods and customers can select any one of them. |
| Mandatory Medical checkup | Group health insurance plans do not have any mandatory medical checkup before the policy issuance. It would not be feasible and beneficial for the insurance company to conduct medical checkups of all the insured members before policy issuance. | Individual health insurance plans may require a medical check-up before policy issuance. The decision of policy issuance would then depend on the health report. |
| Eligibility | Any company registered under companies act or any other relevant act and having at least 7 lives to be insured can avail group health insurance policy. | Any person above 18 years of age can be the proposer of an individual health insurance policy. However policy can be taken for anyone who fits the eligibility criteria of the policy being taken. |
| Corporate Buffer | Group health insurance plans have a corporate buffer to offer extra sum insured in case of need to the insured employees. The decision to assign the buffer rests with the employer and it is not mandatory to utilize the buffer. Buffer would work as per the existing conditions of the policy unless specified. | There is no concept of extra sum insured in the form of a corporate buffer. |
| Super top-up health insurance | Group super top up health insurance provides extra sum insured at affordable rates which acts as a cushion to the members. The policy comes with an excess or deductible and is taken as a back-up to base sum insured. Once the base sum insured is exhausted the super top-up policy comes into action. | Super top up policy in individual health insurance plans comes with an excess or deductible. It is usually taken with a base individual health insurance policy and comes into picture after the base sum insured is exhausted. |
Group health insurance and individual health insurance plans have their advantages and disadvantages. Businesses should consider all the above points and decide which policy to opt for. For more assistance from our health insurance experts, please book a call with Ethika Insurance Broking.
