How Can Self-funded Group Health Insurance Help Your Business?


Summary

How can self-funded group health insurance help your business?

As an owner of a company with 1000+ employees, you must be paying huge amount of premiums for your group health insurance. But what if we told you that there’s a way in which it can be reduced?

You can do this by making the health insurance part of your employee benefits and even consider making it a self funded group health insurance after discussion with your employees.

Keep on reading to see how you can use self funded group health insurance to your advantage and provide your employees with safety at the same time.

Advantages of Self funded health insurance:

Mental Health: 

The primary advantage of taking a self-funded health insurance is that it would provide mental peace to the employees as well as employers and in turn supports the mental health and well-being of the employees. 

In today’s high-tech environment, mental health matters to a great extent as it directly influences the productive capabilities of an individual. Recognizing the importance of mental health, the World health organization has also created a World health day thereby creating awareness on mental health. 

Employees and employers need not worry about their healthcare expenses when they or their family members are hospitalized and this concern has grown multifold during and after the COVID-19 pandemic. 

Most of the group health insurance plans also offer free mental health counseling when the plans are purchased from insurance brokers such as Ethika insurance. Group health insurance plans also provide certain kinds of programs that aim at improving the emotional well being and mental health of the employees. 

Risk Management: 

The other advantage of taking self funded group health insurance is that it helps the employees take control of their risks and have an efficient risk management process in place. 

It is a well known fact that when an employer contributes 100% to the group health insurance, the terms and conditions would be set by the employer. On the other hand, in the case of self-funded group health insurance, employees can decide on the coverage required and even dictate the terms and conditions to the insurance company.

Risk management is one of the ways to transfer the liability from one party to another and insurance helps in this process. There are many methods of risk management available for a firm, but when it comes to medicare, then the best option is risk management in group health insurance. 

Income Tax Benefits: 

Since the employees are paying the premiums in a self funded group health insurance plan, they would be eligible for the income tax deduction under section 80D of income tax. 

Insurance deduction in income tax would be applicable only up to the premium paid by an employee in the group health insurance plan. If an employee pays the entire premium in a group health insurance plan, then he/she would be eligible to claim for health insurance tax deduction. 

To claim insurance deduction in income tax, one needs to follow the income tax login process from the income tax website. In the income tax section for health insurance, there would be a tax calculator in which you should enter the health insurance premium paid, which would then display the health insurance tax deduction amount. 

Atmost, one can claim up to Rs.1 Lakh as health insurance tax deduction under section 80D of income tax. Please click here for more details on the health insurance income tax section. 

Health Insurance Portability:

The other advantage of self-funded group health insurance plans is that it would be very convenient for an employee to avail personal health insurance plans with the same health insurance company. 

Employees under self funded health insurance plans can purchase a personal health insurance plan and be eligible for the benefits accumulated under the group health insurance plan. 

For example, the time spent in a group health insurance policy would be counted for the waiver of waiting periods if you wish to take a personal health insurance policy. Click here for more details on the health insurance portability rules if you want to convert your group health insurance to personal health insurance. 

In addition to this the portability of a health insurance plan in self funded mode is convenient as you can change the insurance company if you are not satisfied with the current insurer. This way, self funded group health insurance plans would increase the accountability of insurance companies and other intermediaries involved in the process. Stand-alone health insurance companies such as Care health insurance offers group health insurance plans with portability options. 

Inclusion of Family Members: 

Employer sponsored group health insurance plans may not have an option to include the family members as the premium is contributed by the employer and many firms might not be interested in giving health insurance for the family members of employees keeping in mind the extra costs involved. 

On the other hand, self funded group health insurance plans would not have any such restrictions as the employees would be paying the premium amount. The best family health insurance would be the self funded group health insurance policy as it comes with a family floater option in which the sum insured can be utilized by all the members of the family. 
Click here to know more about health insurance plans for families including star family insurance plans offered as personal health insurance and group health insurance.

FAQs

  1. What is deductible in a group insurance policy?

    A deductible in a group health insurance policy refers to the amount that has to be borne by the insured customer for every claim made during the policy period. Deductible also known as excess is usually calculated as a percentage of the sum insured or as a fixed amount under the health insurance policy.

  2. SBI group health insurance vs Star health insurance- Which one to take?

    SBI group health insurance and Star health insurance are the best companies offering health insurance in India. SBI group health insurance is serviced by third party administrators whereas Star health insurance has its inhouse servicing team.

  3. What is the difference between group health insurance & group medical insurance?

    Group health insurance plans are designed to cover a wide variety of medicare expenses such as consultation fees, doctor visits etc. whereas group medical insurance plans provide coverage for particular illnesses or injuries.

  4. What is group health insurance for employees?

    Group health insurance for employees refers to the health insurance coverage for the employees working in an organization or a firm. In cases where the group health insurance is offered only to the employees of a firm and not their family members, it is sometimes referred to as group health insurance for employees.

  5. How to take ICICI Lombard group health insurance policy?

    ICICI Lombard group health insurance policy can be taken either through their website or through any of the authorized intermediaries such as Ethika insurance broking.

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Susheel Agarwal