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Group Health Insurance Glossary:


Summary

Group Health Insurance

The insurance industry has a lot of jargon that people need to know about. These terms are commonly used by industry insiders, however, most people outside the industry don’t know what it means. If you’re looking for group health insurance, then you should know about the following group health insurance glossary before deciding on a policy:

Accumulation Period 

This refers to the period in a health insurance policy during which the policyholder cannot make any claims. This period is usually 30 days from the inception of the policy. Any related medical expense during group health insurance in this period may go towards a deductible as part of the policy. 

Acute Care 

Acute care refers to any treatment which is undergone at a hospital or under professional nursing care. 

Age Limit 

The age limit is the range between which a person can avail of the health insurance policy for the first time. For example, a maximum age limit of a policy of 65 years after which a person cannot avail of the policy. 

Area Covered 

The area covered refers to the geographical area that the policy extends to. This means you can avail of hospitalization benefits in a particular geography. 

Most Indian health insurance policies only cover treatment in India.

You can also avail of a policy that covers treatment abroad.

Ambulance Cover

If a policy has ambulance cover, then it will reimburse the policyholder for the cost of ambulance transportation to the hospital.   

AYUSH 

AYUSH refers to treatment via alternative therapy. The AYUSH ministry regulates treatment covered under Ayurveda, Yoga and Naturopathy, Unani, Siddha, and Homeopathy. 

When treatment under AYUSH is covered, most insurers would accept a claim only if the treatment is one at a government facility.  

Beneficiary 

In the event of the policyholder’s death, the beneficiary will receive any insurance amount due from the insurance company. Beneficiary is either the insured, her company or the next of kin (as nominated in records), who would receive the monies spent on treatment by the insured.

Insurance Broker 

The insurance broker is a third-party entity that works on behalf of clients to arrange insurance policies from an insurer. 

Cancer Insurance 

Cancer insurance refers to an insurance policy that specifically covers the treatment of any type of cancer. 

Claim 

A claim is the term used when you make an application to an insurance company for availing treatment at a hospital. A claim could be preferred via the cashless mode or the reimbursement mode. 

Claim Form

The first step in making an insurance claim is filling out a form which is called the claim form. In a cashless claim, the hospital may fill out parts of the claim form on your behalf.

In a reimbursement claim, however, the insured needs to ensure that they get all the appropriate forms filled out before they leave the hospital. This will save them unnecessary trips to the hospital for the purpose of any missed documentation.

Claim Settlement Ratio

Claim settlement ratio is the ratio of the number of claims that have been settled by the insurer to the number of claims received. For example, if the claim settlement ratio is 90%, then that means 10% of claims made by policyholders have been rejected by the insurance company.  

Co-Payment/ Co-Insurance 

Co-payment is the portion of the claim amount that needs to be paid by the policyholder. The rest of the claim amount will be covered by the insurance company. The co-payment is usually a percentage of the claim amount such as 20%. For example, if a policyholder makes an insurance claim of Rs. 1 lakh, then the insurance company will only pay Rs. 80,000 if the co-payment is 20%.

Complimentary Health Check-Up 

A complimentary health check-up is a free health check-up for the policyholder which is offered as a part of the policy. This is an additional benefit that has been incorporated in health policies to attract Customers. 

Critical Illness

A critical illness is a serious illness that may lead to the death of the policyholder. 

Day Care Procedures    

When the duration of hospitalization does not exceed 24 hours, the procedure can be called a day care procedure. Daycare procedures may or may not be covered by a policy. 

Dependents

Dependents refer to the people who are financially dependent on the proposer of the policy. Dependents can be children of the proposer, their spouse, or their parents. Most other relationships are normally excluded from the policy.

Domiciliary Hospitalization   

When the insured needs to avail of hospitalization but is either not in the condition to get to a hospital or is unable to get hospitalized due to a shortage of beds on the hospital’s part, they can avail of professional care at home. Such care has to be prescribed by the consulting physician. Certain health insurance policies cover domiciliary hospitalization while others do not. 

Exclusions 

An exclusion under a policy refers to any treatment or illness that is not covered by the health insurance policy. Exclusion could be temporary or permanent. For example, cataract treatment can be excluded from a policy for a year, while external congenital deformity (like a second thumb on the same hand) could be a permanent exclusion. 

The list of exclusions differs from one insurance company to another, always remember to check this list. 

Emergency Care 

Emergency care refers to treatment that is required immediately. This usually occurs when the patient has a serious disease or illness which needs urgent attention. 

Family Floater Policy

A family floater policy refers to a policy that covers all or certain members of a family for a single sum insured. The definition of a family could include under the spouse, children and parents. The total sum insured of the policy is shared by all the members under the policy. Any member of the policy can make a claim as long as the sum insured under the policy has not been exhausted by previous claims. 

Free-Look Period 

The free-look period is a certain time within the policy during which the policyholder can cancel the policy with a full refund without incurring any additional charges.

The intention behind a free look period is to get absolute clarity on the terms of the policy – generally, a Customer gets a policy document and by that virtue the entire terms and conditions of the policy after he has already bought the policy. 

The free-look period usually lasts from fifteen to thirty days. 

Group Cover

can be availed by any legally recognized entity such as a company or a trade union or a partnership or an NGO. The only limitation to a group in the group insurance policy is that the group should not have come together solely for the purpose of availing benefits under the policy. 

The sum insured under a group cover could be uniform or differential. 

IRDAI

IRDAI, the Insurance Regulatory and Development Authority of India, as the name suggests, is incharge of the regulation of the industry. It also acts as the apex development authority. IRDAI is a statutory body formed under an act of Parliament in 1999.

ICU Limit

The ICU limit is the maximum amount that the insurance company will pay per day. The ICU limit is generally expressed as a percentage of the sum insured. The industry norm is to peg the ICU limit at around 1% to 3% of the sum insured. 

If the ICU expense exceeds the amount under the ICU limit, then the insured has to bear the difference on their own. The ICU charges can, at times, aggregate to a large amount.

It is therefore prudent to check the ICU limit carefully before finalizing a group health insurance policy for the employees.

Network Hospitals   

A network hospital is a hospital that has a cashless arrangement with your insurance company. A policyholder can claim cashless treatment only through a network hospital. This means that the insurance company will directly pay the hospital for the treatment costs.

Non-Network

Non-network hospitals as you might have guessed are ones that do not have a tie-up with your insurer. An insured has to apply for reimbursement in case of a non-network hospital. A reimbursement claim is time-consuming and needs the constant attention of the insured. 

No-Claim Bonus

A no-claim bonus is normally a percentage of the sum insured that the insurer gives you at renewal, without charging any additional premium. A no-claim bonus acts as an incentive for the insured. 

Outpatient Department Treatment (OPD Treatment)  

OPD treatment is treatment that does not require the insured to get admitted to the hospital. The OPD expenses could be ones incurred on consultations, tests or medications.  

Premium 

The amount you pay the insurer to cover you for hospitalizations in a year is called the premium. 

Charging premiums annually used to be the norm, but not anymore.

Policy Coverage

Policy coverage defines what is covered under the policy. Exclusions to the policy are also mentioned in the policy document. 

Policy Period  

The period during which the policy is valid and you can make a claim is called the policy period. 

Portability 

Portability allows you to switch insurers at the time of renewal. Currently, the facility is available only in individual mediclaim policies.

Preventive Care

Preventative care refers to care that the insured undergoes in order to prevent future illnesses or medical conditions.

A lot of group health insurance policies reimburse the insured for preventive care. The intent is to avoid the possibility of bigger claims in the future. 

Preventive care can also help the early detection of a medical condition. Early detection is beneficial for both, the insured as well as the insurer. 

Pre-Hospitalization & Post-Hospitalization Charges

These are charges that the insurer bears if the claim is admitted. The general practice in the industry is to allow for pre-hospitalization expenses of up to 30 days and post-hospitalization expenses of upto 60. Expenses such as consultations, medical tests, and medicine are normally reimbursed under these head

Refill Sum Insured 

In case the sum insured by an insurance policy gets exhausted before the year is completed, a refill sum insured can be availed at additional cost. Not every group insurance policy comes with the option to refill the sum insured. Further, there may be certain additional terms that may need to be met. 

Riders

A rider is an additional benefit that can be added to your insurance coverage. Riders will normally cost you. For example, AYUSH cover, maternity cover, and dental cover are some of the common riders in use.

Renewal 

Renewal means the extension of the term of a policy. A renewal is usually for a period of one year.  

Reimbursement

Reimbursement means that the insurance company will repay any cost that the policyholder has incurred as part of treatment that is subject to the claim being admissible under the policy. A reimbursement claim is usually filed when the treatment is availed at a non-network hospital and a cashless claim cannot be made.

Room-Rent Limit

The room rent limit refers to the maximum amount that the insurance company will pay for the room charges during the hospitalization of the insured. In most cases, the room rent limit is a specified percentage of the total sum insured.

For example, the room rent limit maybe 5% of the total sum insured. If the sum insured is ₹ 1,00,000, then the room rent limit will be ₹ 5,000.

It’s important to be aware that the room rent limit is calculated on a daily basis.

In case the room rent exceeds the room rent limit, the insured will need to cover the excess cost on his own. 

Sum Insured

The sum insured is the maximum amount that can be claimed from the insurance service provider. If the sum insured is Rs. 5,00,000, then you can only receive a maximum of ₹ 5,00,000 from the insurance service provider, even if your medical treatment costs exceed that amount.

Further, the sum insured remains the same regardless of how many treatments you undergo within the same year. 

The sum insured is calculated on yearly basis. This means that the sum insured will renew itself the next year when the policy is renewed.

The higher the sum insured of an insurance policy, the higher the premium of the policy will be.

Sub-Limit

The sub-limit is a limit on claims relating to certain medical conditions in your policy. The sub-limit is the maximum amount that can be claimed for such specific treatments, as mentioned explicitly in your policy.

Usually, sub-limits are placed on medical conditions like cataracts, knee replacement, glaucoma, and the like. 

While your sum insured could be significantly higher than the sub-limit, you cannot claim for more than your sub-limit for these specific treatments.

TPA or Third Party Administrator 

A third-party administrator or TPA is a third party that helps with the processing and administration of an insurance claim. The policyholder can file their claim with the TPA and they will administer the claim as an intermediary between the insurance company and the policyholder. 

Waiting Period

The waiting period refers to the period during which the insured cannot make a claim relating to a pre-existing illness. A pre-existing illness or illnesses specified under the policy. Pre-existing illnesses are illnesses that the insured already has when buying the policy for the first time.

For example, if a person suffers from diabetes and then avails of a health insurance policy, they cannot make a claim relating to diabetes for a period of two years (depending on the waiting period in the policy) from the date of insurance.

Usually, the waiting period for an insurance policy is 2 to 4 years. However, for group health insurance, the waiting period might be zero.

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Susheel Agarwal