Group health insurance is a type of insurance which covers members of a group (which has not been formed solely for the purpose of buying a group health insurance)under one master health insurance policy. The most common and popular form of group health insurance is the one taken by an Employer for their Employees, as a part of the Employee Benefits program. Group health insurance covers the hospitalization expenses of the employees due to any illness, disease or accident during the policy period; an employee can make a claim up to the sum insured, she/he is eligible for, under the policy.
It is rightly said, in India, there’s no right to healthcare. While the rich have money, poor have social security schemes run by Governments, the middle class has Group Health Insurance policies offered by Employers.
The pandemic, as the argument goes, has brought to the surface some stark realities. Realities that were dormant, realities people were generally aware of, but their conscious acknowledgement was to a far lesser degree.
Covid-19 made people’s awareness of their own mortalities come alive. We as humans aren’t very good with picturizing fatalities to our own- self especially in the long run; that is the reason for the high incidence of tobacco consumption and the low incidence of health insurance penetration. But Covid-19, which spread like a wildfire, made us see our colleagues, people of our age group, people with good health, struggle with it and at times lose the battle. Sad as it was, the realization changed people, made them reassess priorities.
Covid 19 made people realize what truly matters. People were unable to get hospital beds for their family, despite having the means. Cases of celebrities, bureaucrats running helter skelter only to find a ventilator at the last moment, flooded Twitter conversations. The bubble that people had created around themselves, the bubble of security, the bubble of exercising means when need be, the bubble they thought was made of titanium, burst, and they felt helpless.
The sense of security that a GHI brings to an employee is unparalleled. If anything, Covid has only increased this sense of security. With medical inflation rising at around 20% per annum and the employers inability to provide employees with commensurate hike in salaries, GHI has become one of the most valuable tools in the employers arsenal. This aspect of security in turn breeds loyalty in the employee. She/He thinks twice before switching, thereby bringing down attrition.
Even as job markets shrink, the hunt for cream talent has intensified. There's a limit to the amount of salary an employer is willing to pay, even for the right talent. It is in situations like these a GHI can help you seal the deal. In the same vein, GHI is also an extremely important retention tool. Smart Employers incorporate a higher (than market standard) Sum Insured along with a top up policy for the right employees. GHI policies can also be tailor made to incorporate coverage of pre-existing diseases from day 1,(which is not possible for personal policies as it has a waiting period), annual health checks for employees and family members. Perks like these make the smart employee think a thousand times before they switch.
The Group Health Insurance policy comes with a lot of benefits which are not available in
the open market for Individuals.
Medical checks or declaration of good health are not a prerequisite for employees.
Coverage for employee parents, at times till the age of 90, can be sought in a GHI.
Maternity can be covered from day one in the policy, at times upto 3 babies.
Newborn babies are covered from day one in the policy ( New Born Cover).
Furthermore, a corporate buffer can be used when the claim exceeds the employee's normal sum insured.
Apart from waiting periods for PEDs, most specific disease waiting periods, which can run upto 4 years at times are also waived in GHIs
Most GHI’s waive the waiting period, including waiting period for pre-existing diseases (PEDs), even these can be covered from day one. As an example, if someone suffers from asthma and is hospitalized during the smog-filled winters because of a severe attack, their GHI will cover the hospitalization, even if their individual health plan does not (Pre Existing Diseases Cover).
Group Health Insurance policies are tailor-made, which means they can be customized depending on the needs of the Employer(Fully Customisable).
Group Health Insurance
Individual health insurance
|Yes, mostly from day 1.||Yes, after a waiting period of|
1,2,3 or 4 years.
|Tax Benefit||Employers can claim exemption, by booking the portion of premium borne by them under business expenses, however the input credit on GST cannot be availed.||Individuals can claim exemption on the premium paid under section 80(D)|
|Year on year cost escalation||Increase in premium depends on previous years claim experience, i.e. claim ratio.|
Discount can also be sought if the claim ratio is extremely low.
|Most insurers will not increase premium unless the claim experience is extremely bad. |
The only increase in premium is because of the age of th
|Additions and deletions of employees||Data for addition/ deletion is exchanged between the company and the insurer on a monthly basis and pro-rata addition/ deletion premiums are charged. The Insurer does not refund premium in case of a claim made by an outgoing employee.||Additions are restricted to legal spouse/ child/ parents and possible only in case of a family floater cover. Mid term additions are possible by virtue of marriage or child birth by payment of premium.|
|Premium||Premium is paid by the Employer. As an add on benefit the Employer at times allows for Employees to avail a higher cover and pays the premium for the higher Sum Insured, but deducts it from the Employees salary in equated monthly installments.||Premium is paid by the proposer; the proposer could take the policy for herself or for someone with whom her insurable interest lies.|
|Beneficial for||Parents/Parents in law as there is no medical checkup required, and coverage for most ailments is from day 1. Elder people who do not otherwise get health insurance coverage outside can be included in the Group policy.||Self employed personnel or people who want to have a higher sum insured apart from the base cover offered by their employer. If a family starts a cover at a younger age, they can avail the policy at cheaper premiums and can continue the cover at the same rate.|
Covid-19 can be called a 'Watershed' moment in the history of employee management practices. There were companies who put the employee interest above all else and at the opposite end of the spectrum were those who paid lip service about how employees were their core strength and yet were the first ones to let them go (despite increasing toplines). Employees who literally bled for their companies were left high and dry, left to fend for themselves. This has triggered a subtle change in the dynamic of employee attraction and more importantly retention.
Gen Z who have started entering the workforce don’t expect benefits like the ones offered by Government companies up until the 90s, but they aren't someone who can be short changed either. [This is the generation, who would not blindly follow orders unless they have understood what is expected of them, why and how exactly are they making a difference in the larger scheme of things.]
How important is my well being?
Answering this question has become one of the most challenging tasks for HR Managers today. The entire Employee Value Proposition(EVP) is centered around the answer to this one question. Employee Benefit Insurance is one of the strongest pillars that shoulders the EVP bucket.
Benefits which you cannot ignore?
Many of the companies want to offer only the bare minimum benefit package which is made compulsory by law.
Those policies are typically :
These are typically construction companies, manufacturing, hospitality companies who operate on very low margins and where the resource availability in the market is plenty.
Most Important Covers of Employee Benefits
The right mix of a GHI, GPA and GTLI cover can become an extremely potent tool towards attracting and retaining employees. We can help you design your Employee Benefits policy.
These three are the most common components of the Employee Benefit Insurance offered by most of the companies in the IT, ITeS and financial sectors.
Employee benefits offered by other employers
As the effects of the pandemic started wearing off, the war for talent is set to intensify; what then would differentiate the good from the great?
Fringe benefits as we used to call them are now mainstream. The pandemic has brought forth a distinct divide amongst types of Employers, and Employees are more than willing to take a cut on their salaries to find and stay with the right Employer. Maslow's need for security was never as profound as in the current times.
Smart Employers realize this need. While Flexi Benefits (FB) is not a new concept, the thrust on FB was never as strong.
Some of the benefits that are in vogue these days include:
Every employer seems to be willing to adopt Flexi Benefits, especially since the impact on their top line far outweighs the ones on their bottom line.
We @ Ethika, have kept abreast of all the developments shaping the industry, the best practices being adopted, the ones being dropped and can help you find the right benefits mix and fine tune them to your needs.
So how do you decide on the benefits package appropriate for you?
Our guess is you, like everyone else, might not want to circumvent the benefits mandated by law. That leaves us with the benefits umbrella that is at your discretion. Believe us, this is a big basket with a lot of legroom to ensure your employee's well being and happiness, and you don't need us, to tell you how a happy employee is a productive one.
So, how do you embark on this journey to ensure employee fulfillment and productivity? Here’s a snapshot of some questions to fire your engine. Objective answer to these should give you broad contours of the path that would be right for you
Having spent the last few years dwelling on such questions,
our team of experts can help you design an EBP that works and is not just bound by lip service.
Hospitalization is one of the most basic albeit expensive benefits that an Employer can offer to their Employees. Most Employers fund this hospitalization through an insurance policy, which is primarily an indemnity policy i.e. the Insurer agrees to pay for hospitalization needs of the Employees upto their respective Sum Insured, subject to the condition that the Employee isn’t also simultaneously receiving payment for the same hospitalization from a different Insurer as well.
The health coverage may cover just the Employee or the Employee and their family. The definition of a family can be customized subject to the members not being anyone apart from a Spouse, their children, Parents &/ or in-laws. Broadly speaking a Group Health Insurance (GHI) could cover any/ all of the following four combinations Read More..
The advantages of a GHI far outweigh the costs when compared to an Individual Health Policy (IHP). When bargaining for a group, Employers can seek certain leverages that aren't economical or viable when bargaining for individuals. Some leverages you could bargain for include, but are not limited to -
Do you feel you could bargain for the GHI yourself? The above list is a template of all the covers
that are beneficial for most Corporates. Just in case you feel a tad bit diffident or overwhelmed,
we are just a phone call away.
While a GHI tends to foster a long term relationship between the two parties to the contract - the Insurer and the Insured (Organization), prudent underwriting dictates that the terms of the contract be beneficial to both the parties, for the relationship to survive the vagaries of health inflation.
Claims data analysis for a couple of years should help the Employer with intelligence on pointers like which age group are most claims prone, what ailments do most of the claims come from, which city is most claim prone amongst other factors; this information translated into knowledge can in turn help the Employer demand a better policy.
Here’s a list of benefits that can be sought in case of a favorable claim ratio
Outpatient Benefits are quickly gaining a lot of traction amongst Employers with a younger age group. New age Insurers, in an attempt to make inroads into new businesses, can offer a cover for your Employee outpatient requirements.
Your current Health Insurer can also be asked to roll out the facility of Outpatient Benefits strictly on an outgo basis to start with i.e. if the cost of health checks (in a particular policy year) works out to X, you pay X, nothing more. While your current Insurer might agree to such a request to start with (just to keep the competition at bay), subsequent renewal would be purely on the basis of claims experience.
A couple of complexities to note with an Outpatient Benefit cover is that Premiums for Outpatient treatment could be as high as 60% of the overall sum insured.
It is easy to get bills for Outpatient expenses (especially in a country like ours) even when no such expenses are made. This increases the burden of scrutinizing bills and therefore the costs, which eventually percolate into the renewal premium.
For this reason, it is advisable to review the overall benefits before choosing outpatient treatment and exercise extreme diligence before selecting this cover.
Wellness was a part of the HR lexicon, long before Covid-19, but the pandemic has accentuated its need. As work from home dims work-life boundaries, maintaining a healthy lifestyle was never as difficult as today.
Insurers realize this need and provide the following covers under the wellness benefit
Doctor on call
Nutrition on call
Psychologist on call
Wellness Sessions by Experts
Annual Health Check up
Annual Dental Check up
Annual Eye Check up
A Corporate Buffer allows you to provide for additional Sum Insured for emergencies for few of the employees, for example - a Corporate Buffer of 10 Lakh over and above an individual Sum Insured/ per employee of 2 Lakh can be used by few of the employees as and when need be. The Corporate Buffer can come in handy while settlement of high value claims arising out of accidents or any major illnesses (including pre-existing).
The facility of a Corporate Buffer can be exercised with various combinations - it can be restricted to the Self or any member of the family; a per incident/ family incident limit can be incorporated; its use could be restricted for critical illness alone. Experience should tell you what option best suits your needs.
As health inflation outpaces salary hikes, getting an appropriate health cover at the right cost is becoming increasingly expensive. Covid-19 has also had a major bearing on management of cash flow for companies.
IRDAI, has long recognized this need and allowed for an installment facility in collection of premium for health policies.
In India, the Employer driven health benefit landscape is shifting from the traditional all expense paid inpatient indemnity plan to other ways of risk/ cost sharing, like high deductible/ co-pay insurance plan. A little bit of experience should help you fine tune your needs, and if you still have difficulties figuring out the covers best suited for your needs, we are just a phone call away.
Generally speaking, Health is called a bleeding portfolio, primarily because health policies are rarely profitable for the Insurer. More often than not an Insurer is doing one of the following two things
If at some point the Insurer realizes that they might be unable to get your asset business or that your asset business is claim prone, the Insurer would move to the other end of the spectrum i.e. either not quote for your asset policy or quote an irrationally high amount.
If you were charged 50 as premium and incurred 100 as claims, the Insurer might charge you 150 at renewal, and the cycle would go on, year on year. Read More..
Why exactly are GHI policies unprofitable? One of the most prominent reasons is that health inflation has been surging
at unprecedented rates in the recent past. The median cost of a cataract surgery in India used to hover around 10000
in 2010; in just over a decade, a decent hospital charges you anywhere upwards of 40000 for the same surgery - that is
a CAGR of around 15%; during the same period average salaries have risen by a CAGR of around 9%.
While Compensation & Benefits professionals have started subsuming the rising cost of group mediclaim into the CTC for Employees, a simpler solution could be better underwriting of your GHI policy.
So, what factors affect the premiums of a GHI. here's a list
Okay, so you have decided on the modalities of the GHI you want to offer, you have even decided on the Insurer,
you think to yourself, that's it, now I pay the premium and insure my employees.
A Broker worth their salt, will get you a breadth of quotes for a breadth of coverages. Are you left wondering how Insurers
could vary their pricing to such extent, for insuring the same set of people for the same Sum Insured?
Well, here's a couple of factors that will help you understand the complexity
The underwriting philosophy of one Insurer could be starkly different from another. One of them could be wanting to go gung ho on the Health vertical while the other might be more conservative.
A startup trying to ramp up operations could price their product extremely aggressively, while someone who has been in the industry for some time might not sit for a single round of negotiation.
A general insurer might offer a significant discount anticipating inroads into your asset business, which a standalone health insurer might not, even if they wanted to.
With soaring health inflation, a proportionate increase in GHI premiums is more a question of when than will they. Employers need to explore alternative strategies to avoid being caught unaware of the sudden increase in insurance premiums.
With the increased awareness around Health and Health insurance policies, lack of appropriate communication regarding the GHI can be perceived negatively by employees.
Consequently, many Employers keep bearing the cost of increased premium year after year to avoid facing the risk of diminished employee satisfaction. There is an urgent need to develop long-term measures and metrics which would help in containing costs and ensuring the effective management of health benefits Companies should consider a flexible benefits strategy and the kind of structure that would be most appropriate in the context of employee satisfaction, expense control, and revenue growth.
Ethika has developed many tools and strategies that can help an employer overhaul their employee benefit program and align it with future needs.
Insurers tend to use different methods to control health claim costs; while necessity dictates this approach for the Insurer, Employers could also learn some of the tricks of the trade.
Incorporation of restrictions on the coverage of Group Health Insurance is a tricky business and due care should be taken to ensure that the overall experience of the member is not affected negatively.
Here are some innovative ways to control claim costs.
Insurers negotiate contracts with some of the top Hospitals, to allow for cashless treatment at fixed costs. Such hospitals form a part of the Preferred Provider Network (PPN) hospital group. About 15% of claim costs can be reduced by increasing the use of PPN Hospitals by about 50% (Something seems wrong).
Here’s how you could go about it
Copayment refers to the amount of the hospital bill that will have to be borne by the individual in every claim they prefer.
This is one of the novel ways Insurers bring prudence into the equation - having a copayment clause forces you to examine every expense that is being incurred, even when it is on your own claim. It is as if all of sudden one becomes aware of all the small charges that are being billed to us - be it the extra cotton rolls or the nursing charges. This in turn forces the Hospitals to be vigilant with billing; a win-win for all.
We have seen a drop of about 15 to 20% in the claim cost by incorporating a 10% copay to every claim.
A couple of things that you need to ensure though, while incorporating a co-pay are
Deductible is normally the fixed amount you pay before your health plan can trigger. It is different from a copay in the sense that it is a one time expense on your annual policy, while a copay could trigger at every claim.
Deductible and Copay used prudently can not only add to the perceived value of the GHI but can also bring down your renewal premium by keeping a tab on the total claim expense.
A word of caution seems in order at this juncture. Since both the copay and deductible largely affect the perceived value of the GHI, they need to be designed judiciously and with extreme care. Both of these have to feel more inclusive than exclusive.
If there ever was an award for the most misunderstood clauses in Insurance, the undoubted winner would definitely be the Room Rent Clause.
Let's put your understanding of Insurance to a small test -
If your mediclaim policy caps your room rent at 3000 a day, and your hospital bill at the end of the third day is 1 Lac. Since the hospital was short on beds, and a single room cost was 5000 a day, you thought how much of a difference an extra 2000 a day would make and got yourself admitted to the single room.
At the Billing Counter, how much of the bill do you think the Insurer would have approved? 1 Lac less 6000 (2000*3) i.e. 94000, right? Well, if you are still at the Billing Counter, you better get back to reality, because your bill would hurt.
A rough estimation of the amount approved by your Insurer would be around 60000 (i.e. the proportionate cost of your room (3000/5000)%)
Room rent forms the basic unit on the basis of which all hospital packages are built. All subsequent charges of hospitalization are a multiple of the room rent and not added to the room rent i.e. if the room rent is x, the cost of the attending physician would be 3x and not 3+x.
Hence if not communicated properly the employee will be shocked to see this kind of deduction from the claim amount and will have a negative opinion on the overall benefit program of the company - for her/him you are the face of the policy, you are the one who has sold her/him the policy, you are her/his trusted party, neither does she know the Insurer nor cares for them.
It is common for Insurers to link the room rent eligibility to the sum insured of the employee for instance many policies will cap Room Rent per day at 1% of the Sum Insured.
Covid-19 adversely affected policies that included such clauses, because of the steep hike in room rents during the pandemic.
Here's a couple of ideas that could help mitigate this risk for you
Vilfred Pareto's 80-20 principle can easily be regarded as one of the most profound principles of economics. Extrapolating the principle to claim costs - 80% of our costs come from 20% of the diseases. And it is these diseases that we need to monitor in order to remain in the range of relative profitability for the Insurer.
Insurers maintain a repository of data on spending based on illnesses. Your Broker could access this data and bring out the sought intelligence from it.
A capping on diseases like Cataract, Piles, Hernia, Hysterectomy, Gallbladder, Kidney stones and the like can ensure that Hospitals do not overcharge when they can.
This way claims can be minimized and those who need financial support for serious ailments which burden their pockets can get the support they need.
Most Indian parents never insured their health when they were young.
Insurers are now hesitant to underwrite their risks because of their growing age.
Most Indian parents never insured their health when they were young.
The Ayushman Bharat Scheme launched by the Government of India does not cover the middle class.
Just about 15% of the Employers cover Employee parents under group health insurance.
Of these 15%, most remain uncertain whether they can continue doing so, given the ever increasing premiums
Well, we promise there's light at the end of this tunnel… sorry, article!!! Read More..
In India, only 50% of Employers include parents of employees while covering them under Group Insurance. Out of these 50% which include parents, 25% collect premiums from Employees and act only as a facilitators by arranging group policies i.e. only 25% of the Employers bear the cost of the premium. Premium payable is decided based on many factors and most important among those is previous year's claims. With people who are on the wrong side of sixty and have pre-existing diseases, it is only natural that the frequency of claims as well as the cost per hospitalization in such cases will be high. So, should the Employer forget about including parental insurance as part of employee benefits? The answer is “No”.
Unlike the west, we are a Collectivist society - for us the “we” always dominates the “I”. And that need not necessarily be a bad thing. Case in point - When Individualistic societies like the US were struggling to vaccinate their entire populations and people weren’t getting vaccinated because of all the conspiracy theories, we - a country of a billion and a half, saw mass adoption of masks & vaccines like no other. One of the main reasons the adoption of masks succeeded in our country was our collectivist nature - most of us stayed with our parents/ in-laws and did not want to transfer the virus to them, even if we got affected. So, non-inclusion of parents in a group health policy is more an emotional issue than a financial one and this is a line, Employers should tread only when there’s no other option left.
A strategic approach towards designing the group policy can help bring down premiums and at the same time extend the benefit of group insurance to the parents. Lets look at some scenarios to elaborate the point.
Case 1: When Employer bears the full cost of the premium
Employers who include parents of the Employees in group insurance and bear the premiums from their pockets can
take the following steps while designing the policy.
Exercise sub limits on employee cover: The employer must work with their Broker to design the policy in such a way that the employees should take standard/benchmark benefits and not luxury benefits from the policy. Luxury benefits might sound ridiculous when spoken in the context of a mediclaim, but the phrase runs pale in comparison to a Suite that can be booked at a tertiary care facility.
The policy must contain inbuilt cappings for particular ailments. It should include capping on common surgeries/ procedures like Cataract, Piles, Hernia, Hysterectomy, Hydrocele correction, Joint Replacements, Gall bladder stone, Appendicitis. An ailment specific capping ensures that gullible Employees are not taken advantage of.
Eg: For day care/ short stay procedures, like cataract, BPH surgery, for employees or the dependents, it is important to consider that the treatment cost can vary significantly depending on the facility available in the hospital. Due to lack of standardization of cost across hospitals, a cataract surgery in a private hospital will cost around 30,000, however the same procedure can cost 50,000 in a multispeciality hospital. The funny part is the Surgeon treating the patient in both the cases could be the same. Having a sublimit therefore ensures optimization of resources.
Always remember, the purpose of a mediclaim policy is to render help in the time of need, its should aim at the greatest good of the greatest number of people
Setting a lower limit on claims: The policy must be structured in a way where Employees can claim for expenses, which are painful to the pocket, but not ones where having a mediclaim policy serves as a motivation for expense.
The Employer can set a minimum limit for seeking claims at around 3,500/-. This will not only curb claims below 3,500/- but also inculcate a sense of prudence in the Employee - while no one visits the Hospital just for the sake of making a claim, having a mediclaim does tend to push people into a sense of extravagance.
Hospitalization in preferred hospitals: While setting a lower limit on claims is a good start, it is not an airtight solution, especially in a country like ours. People can join hands with Hospitals for all kinds of misrepresentation, sometimes for as little as 10,000; especially when they are not aware as to how the economics of mediclaim policies work - they tend to think that the money they are apportioning would be borne by the Insurer, but the Insurer would just add the expense to your overall claim cost and present it to you as renewal premium.
This menace can be curbed to a large extent by encouraging Employees to avail services in preferred hospitals.
Simple incorporations in the policy like a clause, stating that, Employees who avail services in preferred hospitals would be entitled to 100% of the claim amount, as opposed to a deduction of about 30% for claims in non-preferred hospitals, can go a long way in addressing the issue.
Preferred hospitals are reputed hospitals that do not have the tendency to inflate bills or misguide patients under the guise of treatment. Employers can also work with different hospitals to get discounted rates for consultation in return for adding their hospital to the preferred list.
An employer can avail the services of an Insurance Broker for designing and incorporating such clauses in their policy.
For more insights on what clauses can help you save better feel free to reach Ethika Insurance Broking Private Limited.
Case 2: Employee bears the cost of premium partially
In a scenario where an Employer cannot bear the entire cost of premium, it can act as a facilitating vehicle for the group insurance. Some pointers towards facilitation of such a benefit program could be
While migration of a policy allows an individual to move from a Group to an Individual, portability allows them to switch an Individual mediclaim policy from one Insurer to another. To know more about portability of policy feel free to reach Ethika Insurance Broking Private Limited.
Care for your parents with no worries about medical expenses - Reach out to us to know more about parental insurance.
Case 3: When neither case 1 nor case 2 is possible
Acting as an interface : It is said that pointing someone in the right direction when one cannot help them, could turn out to be of greater significance than helping them in actuality. Employers who can’t afford to support their Employees financially, can support them by acting as an interface between the Insurer and the Employee. They are the insiders that the Employees can trust. The knowledge they might have gathered can help Employees make the right decisions. Moreover, this is not just an act of good faith because it can help remove one of the biggest distractions from the Employees time. Encouraging Employees to take a senior citizen health insurance policy for their parents can not only save the Employee a lot of distress, but can also ensure they don’t fall into a debt trap by loaning the amount.
Individual Health Plans for senior citizens are costly because they do not have the bargaining power of a group.
Senior citizen health insurance policy is designed to serve the health needs of senior people who have crossed 60 years of age. These policies cover hospital charges and medical expenses incurred due to sickness or injury due to an accident. The most important aspect of such a plan is that the waiting period for pre-existing diseases is set lower than that for regular individual health policies.
Certain Banks also offer Group Mediclaim policies for its customers and the premiums are relatively lesser than the normal retail policies. Employers can tie up with such banks and offer those policies to employees.
Gone are the days when the relationship between the Employer and the Employee used to end the moment the latter stepped out of office. In an age dominated by talent shortage, the threat of whether your Employee turns up at their desk the next day looms large. One fact that you could rest under though is that no one quits home, make your Employee a family member, ensure their needs are taken care of, especially the ones they might be unable to, by themselves, and we assure you, your Employees would keep turning up, every single day!!!
Ravi Kumar, an IT professional in his late forties walked into the office of a general insurer. He was not happy with the way his current insurer had treated his health claim; they had kept dilly-dallying the processing for a couple of months, asking for additional documents every time he submitted the previous ones, and eventually denied the claim on absurd grounds.
Ravi was a reasonable man and would have been okay if he had gotten a satisfactory reason for the rejection, but after endless conversations, he had come to realize that all his conversations were going in circles with no end in sight. That is when he decided he had had enough and landed at the doorstep of the new Insurer seeking health insurance portability. Read More..
Portability of health insurance policies is undoubtedly one of the most popular tools that the regulator IRDAI, has
supplemented the Indian consumer with. In this article we explore some questions about portability like the
difference between portability and migration, when can you port, why should you port and how.
What is portability, how is it different from migration?
IRDAI defines health insurance portability as moving from one individual health policy (IHP) of an Insurer to another IHP of a different Insurer as opposed to migration which is defined as moving from one health product of an Insurer to a different health product of the same Insurer.
Can you port from any health insurance policy into any other policy?
Technically, you can migrate from a group health policy (GHP) to an IHP offered by the same insurer. But you can subsequently port to an IHP offered by a different insurer the next year.
One complexity that could arise during porting or migration is in the case of co-branded health products. Co-branded health products are group health insurance products offered to all retail Customers of Banks. While the product is underwritten as GHP, most Customers are issued individual certificates which could make them think they are covered under an IHP.
That said, the norms of migration as stipulated by IRDAI apply to the product as well, for eg : an individual who wants to migrate out of a New India Canara family floater policy would need to migrate to an IHP or FHP with New India before they can move to an IHP/ FHP with HDFC Ergo.
What timelines need to be adhered to during the process of porting?
IRDAI guidelines state that portability can be initiated 45 days prior to expiry of the policy while migration can be initiated 30 days ahead. But guidelines also state that this time frame is just an indicative one and need not act as a bottleneck for portability or migration.
Why should I port?
While there is no objective answer to this question, our experience suggests most Customers exercise their choice of portability after they have preferred a claim under the current policy and their claim Processing experience has been far from satisfactory.
While Insurance is offered as a service, the parameters of evaluation of a service get enhanced at the time of claim Processing. Prudent insurers realize this and put their best people in the claim servicing vertical. But given the nature of loss, we as humans are not wired to look at personal loss objectively. This can lead to enhanced expectations and therefore unsatisfied outcomes.
We suggest due diligence be carried out before choosing an Insurer. A little margin should be accorded to Insurers before taking hasty decisions.
Can I increase my existing Sum Insured at the time of porting?
Yes, Sum Insured can be increased at the time of porting. There are a couple of complexities though that one needs to understand while doing so. Benefits of portability are granted to the extant Sum Insured i.e. to the extent of Sum you were Insured for in your previous policy.
Say you bought an Insurance cover for Rs. 5 Lakh in 2018, accrued a no claim bonus of Rs. 1 Lakh in 2019 and decide to port the policy in 2020. While porting, you are made aware that you have an option of porting to a Sum Insured of Rs. 8 Lakh with the new Insurer. You decide to exercise this option and port to a Sum Insured of Rs. 8 Lakh.
Complexity I - The one tiny detail that goes missing is, while you ported, the benefit of continuity is granted to an extent of Rs. 6 Lakh (your Sum Insured in the previous policy). You would still need to wait the stipulated number of years (i.e. the number of years of waiting period with the current insurer) for access to the balance Sum Insured which is Rs. 2 Lakh, in the current case.
This essentially means that say you have a heart condition (which was declared at the time of taking the previous policy in 2018), the cover for any hospitalization arising out of this heart condition would be payable to the extent of Rs. 6 Lakh in the current policy year (i.e. 2020), despite the fact that you are insured for a Sum of Rs. 8 Lakh.
Complexity II - Another complexity to note is the disease you contract after you took the first policy. Say you have been diagnosed with diabetes in 2019, while your earlier policy would have covered hospitalization arising out of it, the current Insurer could deny covering it, on the grounds that diabetes is a pre-existing disease for the new Insurer and would therefore need to be declared at the time of porting into this new policy. This essentially means that any hospitalization claim arising out of diabetes could be denied by the current insurer (irrespective of the Sum Insured), if it has not been declared while porting.
What are some points to be considered while porting?
Third Party Administrators (TPAs) form an indispensable link in the claim Processing vertical of an insurance value chain. They are the ones who work on ground zero and maintain all the data. Continuing the policy with the same TPA after porting ensures continuity of data and lesser document exchange hassles for the Consumer. If you do get the choice, stick with the same TPA
Ensure sum insured continuity for all members. When porting a Family Health Policy (FHP) which provides a floater Sum Insured to an IHP which provides individual Sum Insured for each member, one of the complexities that could go overlooked is the Sum Insured cover for individual members. Ensure every member in the new IHP has coverage equal to their floater cover in the previous policy, for eg : if a Father, Mother, Son & Daughter were covered for a floater cover of Rs. 5 Lakh in a FHP, they are entitled for an equal individual coverage under IHPA
Waiting periods for ailments/ pre-existing diseases (PEDs) are waived off to the extent of the tenure of coverage under the earlier policy, for eg : if you had been covered under a GHP for two years and are now migrating to an IHP with a waiting period of 3 years for PED, your waiting period for any hospitalization arising out of PED would only be a year, subject to appropriate declarations at the time of enrolling in the GHP.
The regulator has equipped the Insurers with tools to carry out seamless business activity; in the same vein it has also
equipped the Customer with the power of information to ensure appropriate questions are raised when they find
deviations from guidelines. Health Insurance portability is one such tool that compels Insurers to improve on service
delivery while constantly improving on the overall architecture of the Health Insurance ecosystem.
Employee benefits Insurance surveys are questionnaires sent to employees typically one month before Insurance policies are due for renewal. They ask questions about the quality of specific benefits, how they compare to other companies, and any additional benefits employees would like to see in the future.
Here is a sample questionnaire. Feel free to choose the questions which you may like to include in your Employee Benefit Survey during Renewal. Read More..
|Group Health Insurance||Quantitative aspects||Qualitative aspects|
|Head||Policy related||Claim settlement/ TPA related||Policy related||Claim settlement/ TPA related|
|Individual Coverage||What age group are you in 21-30, 31-40, 41-55, above 55||How many times in the past year have you taken a claim?||Are you aware of the Insurance Company for your policy?||On a scale of 1 to 5, how satisfied are you with the services rendered by the TPA|
|What are the three benefits you can pay higher for?||If the treatment was not availed as Cashless, how long was the TAT for settlement?||If your immediate boss was switching jobs, and offered to take some of you along to the new company, you like your boss but are comfortable at the current job; everything at the new company would remain the same, except for the Insurance coverage offered - How much would the coverage need to be, for you to switch?|
|What are the three benefits you can do away with?||Would you be willing to bear a certain cost to depute a TPA personnel at the office on a weekly basis?|
|How much would you be willing to contribute per month for a higher coverage|
|Would you be willing to pay a bit higher for a Dental cover?|
|What is your sum insured you in the Company GHI?|
|Are you covered as a dependent under your Spouse/ Parent policy?|
|Cappings/ Subcappings||Are you aware of the various cappings on Sum Insured for particular hospitalizations?|
|What is the ideal maternity cover? 50000 or 75000|
|Room rent forms the basic unit of your hospital bill. Would you have your room rent capped at (1) 1% (2) 2% (3) No capping|
|Would you want your ICU rent capped at (1) 1% (2) 2% (3) No capping|
|Parental Coverage||Comparing the overall architecture and the economics of a group policy with an individual one, would you rather insure your parents under a group policy or an individual one?||If you are to go onsite for a month, with no access to phone calls, could you be assured that your parents would be okay, with the TPAs number at their finger tip?|
|How old are your parents|
|How much would you want your parents Sum Insured to be?|
|Given the increasing healthcare costs, we may need to incorporate some of the changes mentioned below. Please select your preferred choice|
|1)Sharing of Parental Premium|
|2) Sharing a part (say around 20%) of the parental claim|
|3) No Parental Coverage|
|Due to the rising insurance cost, if we provide you with an alternate self-pay parental policy with all the necessary coverages including pre-existing diseases, would you be interested?|
|o No (if no, please specify the reason)|
|Who would you like to include in your Parental policy|
| o Parents |
o Parents in law
|Are your parents covered separately under any of the following, please specify the Sum Insured and the premium borne|
|Individually under a retail policy|
|Covered under their own GHI from their employer|
|Do your parents have any health conditions|
|How often do they get a health check done?|
|Parental Coverage||Would you be willing to bear a premium for a Corporate Buffer?||Anything that came as a shock to you when you preferred the claim?||Anything that came as a shock to you when you preferred the claim?|
|Group Top up||Quantitative aspects||Qualitative aspects|
| How much do you think a 10 Lakh Top up with a Threshold of 3 Lakh cost for two parents, where the father is 65 and the mother is 60? |
| What is the number of years of waiting period a top up should have? |
|Group Personal Accident||Quantitative aspects||Qualitative aspects|
|Are you aware of the Sum Insured you are covered for under GPA?||Do you know of anyone who needed to avail the GPA benefit?|
|Do you think the Sum Insured is appropriate?||FU - Would you say they seemed relieved that the Employer had a GPA - Yes, No, Maybe|
|Employee Wellness||Quantitative aspects||Qualitative aspects|
| Do you exercise |
I am a gym junkie
1-3 times a week
3-5 times a week
Does running away from responsibilities count.
| How keen would you be to attend sessions conducted on "Mental Health Awareness" remotely? |
I am game
I don't need a shrink
| Do you meditate? |
Once a day
1-3 times a week
3-5 times a week
I don't need meditation to levitate
|On a scale of 1 to 5, how healthy do you eat? 1 being not healthy at all 5 being I don't touch processed food.|