While reviewing the employer most of the employees consider the benefits they get as first criteria. In benefits with growing health expenses health benefits comes first to the notice. The normal Retail health policy covers only healthy members and comes with pre -existing disease waiting period. In group policy the pr-existing can be covered from day 1. This is the major reason, the group policy is preferred and increasingly becoming essential incorporates.
Statistics shows that more than 35% of the corporates offer cover equal to or more than 3 Lakhs as sum insured. In India 95% of the ailments get treated with in 3 lakhs sum insured. Apparently, this seems to be an adequate cover.
It is very difficult to get a good health cover for our parents in retail market. As the age is more than 45 years the premiums are very high and most often the covers are restricted to only non-pre-existing diseases. The group cover offers this benefit, but it comes at a cost. Large Employers started offering this cover as a option to employees, where in those employees who wants to opt for this cover should pay for the premium. Employees are eligible for the section 80D tax benefit for the premium paid by them. For small employers it remains a challenge.
Unlike a normal Health policy in retail market, the renewal premium of group policy largely depends on the claims in the expiring year. That means a healthier group will have less premium and a less healthy group will pay more premium. It also means the employer must be very tactical in structuring the policy so that it is open enough to the employee to get good benefit but not open enough for the hospital to inflate the bills under this policy.
To keep the benefits of Group Health Policy attractive following points must be considered
While taking the policy one must ensure with its broker or insurer that all waiting periods are waived off.
Certain restrictions must be customized to avail the optimum and real benefit of the policy.
Structuring a group health policy is a intricate task, however above checklist points though not exhaustive but gives critical perspective into structuring of Group Health Policy.
In India, only 50% of the employers include 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.
The reason why parents are not included in Group Insurance is funding of 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 frequency of claims will be high and most of the times intensity, in other words, the amount of claim is also high. So, whether the employer should forget about including parental insurance as part of employee benefits? The answer is 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 parents of the employee. (Also read: alternative solution on What employer can do if employees parents are not covered under group health policy)
Following are few points to be considered while designing the structure of group insurance policy to minimize the premium cost.
Employers who are including parents of the employees in group insurance and paying premium from their pockets shall take following steps while designing the policy. They must focus on ensuring claims are not very high in the current year so that next year the premium will not be high.
In the scenario where the employer does not want to bear the cost of premium fully or partially it can act as facilitating vehicle.
In India, nearly half of the employers do not include parents of the employees while insuring them under Group Health Insurance Policy. The prime criteria for this decision is high premium cost. Though high premium cost issue can be dealt with a strategic approach. (Also read: Parental Insurance in Group Health Insurance Policy – an employee benefit plan). However, even if employer has decided to exclude employee’s parents from group policy he can still take care of employee’s parent’s medical expenditure in following ways:
It’s well said that if you can’t help by contribution you can still help by giving an idea and direction. Similarly, employers who can’t afford to support financially at least can support their employees by arranging a facility to take right decision. If parent’s health is taken care of employee’s half the diversion is taken care off.
For any support or further information on planning employees benefits or senior citizen health insurance feel free to reach Ethika Insurance Broking Private Limited.
Advantages of Group Mediclaim over Retail Individual Mediclaim policies
|#||Coverage in Individual Policies||Advantage under Group Policies|
|First 30 Days Waiting period||Employees are covered from Day 1 of joining the organization.|
|1 year, 2 year waiting period for specified diseases||Not applicable under Group policies|
|Pre Existing Diseases covered after 4 years||Pre-existing Diseases are covered from Day 1|
|Maternity Not covered||Maternity is covered with specified limits|
|New Born Baby Covered from 91 Day||New Born Baby covered from Day 1.|
|Co-payments – Applicable depending on Insurer||Not applicable|
|Room Rent Capping 1% of Sum Insured in Public sector Insurance companies||Can be defined as Standard Private Room|
|Disease wise capping||Not applicable|
|Choice of TPA not with us||Choice of TPA given to us|
|Pre and Post hospitalization 30/60 days||Same as Normal Policy|
|Addition and deletion – Not possible||Addition and deletion done on pro rata basis|
|Coverage for higher claims not possible||Corporate buffer is given to take care of any higher claims.|
|Coverage for Parents is very difficult because of higher age. Medical test is pre requisite.||Parents can be covered without any waiting periods and Medical test is not required.|
|Online Claims portal for Management not provided||Online Claims portal is provided.|
|Routine Health Test not provided||Routine Health test like Eye / Dental / General check-up camp conducted.|