Top Reasons Why Employees Don’t Use Group Health Insurance


Group Health Insurance

As an employer, you may be considering offering a group health insurance to your employees as a benefit.

Why is group health insurance important? There are several advantages of offering group health insurance such as better employee retention, higher goodwill in the market, improved productivity of employees, and so on. A group health insurance is also more cost-effective than having employees avail individual or family floater policies.

However, all these advantages may not work if the employees refuse to avail of or use the group health insurance benefit. There can be several reasons for this, which we’ll discuss below.

Lack of Awareness

There can be a lack of awareness amongst employees about the details and particulars of the group insurance offered by the company.

They may feel that the policy can only be used in case of large expenses and prolonged hospitalizations. However, most group health insurance policies offer more benefits such as preventative health care and health check-ups, OPD cover, maternity cover, and so on.

If you feel that your employees are not using the group policy to the fullest degree, then you may want to take proactive steps to increase awareness and educate employees regarding the benefits of the policy.

Lack of Coverage

There are several versions of group policies. Certain policies have more exclusions and lesser coverage than others.

An employee can feel that their group policy does not provide adequate cover for their needs. For example, it may be the case that the group policy does not cover the dependents of the employee. This can force the employee to avail a separate policy for their family.

The best workaround to this issue may be to ensure that your group health insurance policy is as comprehensive as possible. Such a policy will be more effective in helping employees with their needs.

Lack of Flexibility

By definition, a group health insurance for employees is less customizable and less personalized than an individual or family policy. An employee may need a policy which specifically covers pre-existing illnesses or they may need a policy which provides higher room rent.

Such needs can lead to employees not availing the group insurance policy in favor of availing a policy on their own which specifically caters to their needs.

To avoid such an eventuality, it can be better to avail a group insurance policy that offers personalization features. There are certain new-age insurance companies that offer several add-ons and riders which can be availed by employees.

Social Stigma

Employees may be concerned that making a claim on their group policy may negatively impact their perception in the workplace. Further, they may also be concerned that making a claim under the group policy may inform the company about their and their families private medical issues.

Such concerns can be driven away be assuring employees that it is better for the company if the employees utilize and make claims under the policy. Further, they can ensure that all claims are completely discreet and the details of the claim is never released to anyone.

Wrapping Up

Why group health insurance is necessary? Studies have been conducted which show that employees perform better for their company when they feel like the company cares for their well-being.

The underutilization of a group health insurance policy makes availing the policy less effective and beneficial than it can be. Employers can take proactive steps to prevent such issues from arising and ensure that all employees are aware of the benefits and feel comfortable with making claims under the policy.

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Susheel Agarwal

Susheel is the CEO of Ethika Insurance Broking P Ltd. This company, which has a current value of 10 million dollars, was bootstrapped by him and two of his friends. He attributes his success to his ability to inspire others to seek happiness at work.