Group Health Insurance

Why Group Health Insurance?

The biggest reasons why group insurance is preferred and is increasingly becoming essential in the corporates is that, in group policy, the pre-existing conditions can be covered from day 1, while the normal retail health policy covers only the healthy members and moreover it comes with a waiting period for pre-existing diseases.

Statistics show that more than 35% of the corporates offer cover equal to or more than 3 Lakhs as the sum insured, plus in India, 95% of diseases get treated within 3 lakh sum insured which seems to be pretty much an adequate cover!

Differences between individual and group insurance

  • Individual
    • No
    • Under Section 80(D)
    • No increase in premium because of the claim. The only increase in premium because of age slab.

  • Vs
    • Pre-existing Diseases Coverage
    • Tax Benefit
    • Premium increase in future

  • Group
    • Yes
    • Can be booked under Business expenses. However, the Input Credit on GST is not applicable.

     

    • The increase in premium of renewal depends on the claims in the expiring year.

How to Choose the right Insurance broker

The Insurance brokers represent their clients to Insurer and not the other way around. They are bound by the Insurance Regulator to perform as per the terms laid to them. They need to protect the interest of the client (you) at every step of insurance, be it buying or claims assistance.Now, because they are experienced and have worked with various clients, they know the best practices and hence can help you set up the right insurance program for your organization with an ease, saving your time and effort and other nitty gritty!

Typically, you should expect the following from any employee benefit Insurance broker

Personalized quotes from a broad selection of top insurers and Side-by-side comparisons of plan rates and benefits
Special online platforms for enrolment of employees
Personal and unbiased claim assistance
Consulting on Benefits Strategy including benchmarking and alignment to corporate benefit
Audit of existing benefit structure with recommendations for optimization, consolidation, plan design and cost containment
RFP Management and in-depth carrier analysis from financials to account management to support services
Recommendations on specific benefits or unique situations
Strategy to minimize the health risk by increasing the employee engagement
Renewal analysis and negotiation and support on escalated questions or issues

By working with an authorized Insurance broker like Ethika, all these checkpoints can be taken care of, and you will end up saving your time and in return get a selection of quotes from top insurance companies.

How to decide the premium

Number of members covered

Self
Self+ spouse
Self+ Spouse + Children
Self+ Spouse + Children+ parents

The Extent of benefits

Maternity benefits
Dental benefits
OPD benefits
Pharmacy reimbursements
Room cost capping
Health check benefit
Domiciliary care reimbursement

As with all things, Indian employer health benefit is shifting from that usual traditional all-expenses paid inpatient indemnity to other ways of risk or cost sharing, like high deductible plans or co-pay insurance plans.

The sum assured varies among employers but usually, a minimum sum assured is above Rs 200,000 to each employee. Various combinations of benefit limits and privileges in room types are included in the benefit design at various levels of staff. With rising medical inflation, improved access to healthcare and rich coverage in benefits, claim costs have been rising steadily.

While taking the policy one must ensure with its broker or insurer that the below covers are provided:

30 Days waiting period is waived off
1,2,3 years waiting period is waived
Pre-existing disease waiting period is waived
90 days newborn baby waiting period is waived
9 months maternity waiting period is waived
Pre and post hospitalization cover is provided

In order to avail the optimum benefits, certain restrictions need to be customized, which include

Room Rent Clause

Here we have room rent restriction by linking the limits to the percentage of sum insured. On the other hand, it will be better to customize this clause for considering the private or sharing room!

Copayment Clause

Employees will question hospital for treatment and charges, since a certain amount will also be paid out of pockets of employees, hence it will make the employees aware as well as responsible. Percentage of copayment by an employee shall be nominal. A normal copayment of 10% of claim can reduce the claims of company by more than 15% to 20% at the end of year

Waiver of Internal congenital exclusion

A part of standard exclusions, however, must be considered while negotiating the premium (For any queries on Internal Congenital exclusion please feel free to reach Ethika Insurance Broking Private Limited)

Disease Wise Cap

For minimizing the claims, limiting the average cost of treatment for the common procedures like cataract surgery, hysterectomy, piles surgery, etc. By doing this, ones who need support for more serious conditions will get the timely assistance and there will be less burden on their pockets!

Maternity Cap

Normal limit for maternity is 50,000 per claim both for normal and C section delivery. An appropriate segregated limit will also save claims

Deductibles

Here a flat nominal amount of say Rs 1000 or Rs 2000 is applied as deductibles per claim. However, it’s advisable to apply this clause to those claims where copayment is not applied. In order to restrict small value claims and thereby reduce premium of next year, deductibles clause must be appropriately designed

Preferred Hospital Network

Insurers have a pre-negotiated tariff with the hospitals and this costs less than the average treatment cost anywhere else. The overall claims can be significantly controlled if the members of the policy are encouraged to opt for the preferred hospitals from the list by removing the certain clauses (copayment and deductible). Also, with preferred hospitals, arrangements can be done for cashless treatment and also by increasing the room rent limit!

The company may not like to put copayment clause in reimbursement claims as they can execute control while clearing reimbursement claims

Some of the covers that can be added are:

Covering Outpatient treatment

There are insurers who offer claims for outpatient treatment as well, however, one must know that the premium for outpatient treatment is as high as 80% of the sum insured. Hence, it’s advisable to review the overall benefits offered before going for any outpatient treatment and opted only in rare cases.

Cover of corporate Buffer

This is of help in high-value claims which arise out of any accident or any major illness. This can be limited to any members of the family or with per incident limit or restricted to only critical illness.

Voluntarily Super Top Up Policy

This is in demand nowadays. By paying the additional premium, the employees who wish to increase the sum insured limit can go for this super top-up policy. They not only get the additional limit but, also, they can avail the benefit for an additional premium paid under section 80D

Getting good health coverage for the parents in the retail market is quite a challenge, as the age is more than 45 years, the premiums are very high! Majorly the covers are restricted to only non-pre-existing diseases. The group cover offers this benefit, however, there is a catch, it comes at a cost. Large Employers offer this cover as an option to their employees, wherein the employees who want to opt for the cover should pay for the premium. Employees are eligible for the section 80D tax benefit for the premium paid by them. Again, for the small employers, it remains a challenge.

In India, only 50% of the employersinclude parents of the employees while covering them under Group Insurance. Out of these 50% employers who include parents, 25% of them collect premium from employees and act only as a facilitator by arranging group policy. Only 25% of employers bear the cost of the premium.

Premium payable is decided based on many factors and most important among those is previous year claims. With people who are aged and with the pre-existing disease it is very natural that the frequency of claims will be high and most of the times intensity, in other words, the amount of claim is also high. So, should the employer forget about including parental insurance as part of employee benefits? The answer is a “No”. A strategic approach towards designing the group policy will help in bringing down premium cost and at the same time extend the benefit of group insurance to the parents of the employee.

Leverage technology-Most of the Insurance brokers including Ethika offer you a complimentary enrolment tool so that you can manage the enrolment period* online seamlessly and conveniently. With an online platform, the new employee can be onboard. The premium for additions and deletions is generally calculated on a prorated basis and the credit or debit is made in the CD balance account. one can see the balance anytime online for their policies. Online tool helps in managing the policies, adding or deleting the members without any hassle just with a click!

Employee may receive confirmation of approval for the coverage right away, but the insurer endorsement and card usually takes one month. In some cases, it may take longer. Remember that the endorsement is not sent to insurer right away after approval. If employee enrolls by the 15th day of the month, the endorsement coverage details will be sent on the first day of the next month. The endorsement is done only when there is enough balance in advance premium deposit account maintained by insurer.

Less than 8% of employees avail the Insurance benefits. Many of them may not be even aware that such benefits are available, that’s why proper employee communication is important, it increases the overall perceived benefit among employees about the benefit program offered by the employer.

The Importance of Employee Benefits Communication is “The “Most important part of a company’s HR function. The employees should be aware of the overall compensation and not just the cash value of the salary! That’s where benefit communication plays its part by helping the employees to understand the value of their employment.

A good, thought through employee benefits communication program is important as it tells the employees what options are available, what to choose wisely, what mistakes to avoid, like not selecting the plans that will later lead to increased out of pocket costs putting a burden on their pockets

When your employee is having questions about the claims, most of the Insurance brokers, direct them to contact the health insurance company’s customer service department or third-party administrator. If employees feel that their concerns are not addressed, only then they will contact your health insurance broker for help (if you worked with one). Your broker can simplify and also help you understand how the benefits work and from time to time can help you settle billing disputes if any arise in the due course.

Outsourcing the management of your Benefits program has several advantages. Crucial personnel need not be burdened with additional, unfamiliar responsibilities and your employees are assured of timely, professional assistance and compassion. Most of the Insurance Brokers provide the above service.

Ethika believes in ‘serve to care and serve with compassion’. We are sensitive to claimant’s losses and his expectations from an insurer. Our exposure to diverse cases of claims redressal has shown us that each claim is unique in terms of conditions and requirements. We direct all questions or concerns raised by your employees to us and therefore, are in a better position to have control over the process.

Get in touch with us

At Ethika, we understand that Insurance Broking is about ensuring the best interest of our customers and establishing trust. Our team has diverse experience and strong expertise which enables us to understand your business needs and your risks well. Our experts are highly innovative and they deploy the latest technology tools to bring Speed, Effectiveness and Utmost Responsiveness to your doorstep.

#88, Above MRF Tyres,
Gachibowli – Miyapur Rd,
Hyderabad. 500032

+ 91 84980 94601

info@ethika.co.in
support@ethika.co.in

Ethika Insurance Broking Pvt. Ltd. IRDAI Certificate No: 574, Date of License: 8th Aug 2016, License valid till 7th Aug 2019,
Registered Address: 517, B Block, Vijaya Raghwa Township, Nallagandla Bypass Road, Lingampally. 500019
Principal Officer: Susheel Agarwal, Contact Details of Principal Officer: susheel@ethika.co.in +91 8498094600,
Directors: Susheel Agarwal and Suresh Agarwal, Category of License: Direct (Life and General).

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