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Health Insurance for EMPLOYEES PARENTS

Most of our parents never insured their health when they were young.

Now, insurance companies don’t want to cover them, as their current health conditions are not favorable to insurers' underwriting guidelines.

Ayushman Scheme launched by the government does not cover the middle class.

Very few corporates (15%) cover employee’s parents under group health insurance.

Some large companies provide health insurance to their parents by collecting premiums from their employees. Even those who do this are uncertain whether they can continue due to the increasing premium prices.

Take a look at our detailed report on what employers can do to solve this critical issue of covering employees' parents under group health insurance.

In India, only 50% of employers include parents of employees while covering them under Group Insurance. Out of these 50% employers, which include parents, 25% of them collect premiums from employees and act only as a facilitator by arranging group policies. 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's claims. With people who are aged and with pre-existing diseases, 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.

Case Scenarios – Following are configurations and scenarios to be considered while designing the structure of a group insurance policy to minimize the premium cost.

Employers who are including parents of the employees in group insurance and paying premiums from their pockets shall take the following steps while designing the policy. They must focus on ensuring the claims are not very high in the current year so that next year the premium will not be high

Exercising sub limits on employee cover: The employer must work with its broker to design the policy in such a way that the employees should take standard/benchmark benefits and not luxury benefits from the policy. The policy must contain inbuilt limits with respect to diseases. It should include most common ailment interventions like cataract surgery, piles surgery, hernia surgery, hysterectomy, hydrocele correction, Joint Replacements, Gall bladder stone surgery, appendicitis surgery, etc which are not costly. Also, insertion of a clause that only average standard cost is allowed and anything above that will not be allowed.

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 where it is INSURING EMPLOYEES PARENTS 18 undertaken. Due to lack of standardization of cost across hospitals, a cataract surgery in a private hospital will cost around 10,000, however the same procedure will cost 20,000 in a multispeciality hospital. So, in this case, only 10,000 will be allowed on submission of actual bills

Setting a lower limit on claims: The policy must be structured in a way where employees can claim expenses which are painful to the pocket and not for the sake of claiming. The employer must set a minimum limit for seeking claims, say 3,500/- this way all small claims below 3,500/- will be curbed and employees will not be visiting as inpatients just for the sake of claims.

Hospitalization in preferred hospitals: Just setting up of minimum limit of claim is not enough. There can be a possibility that hospitals will misrepresent and join hands with employees to fetch money. Therefore, it’s important to include a clause that encourages employees to avail services in preferred hospitals

A clause stating that employees who are availing services in preferred hospitals will get 100% claim and those who are availing at other hospitals will be getting only partial claim say 70% of bill amount. It will encourage employees to avail services in preferred hospitals and if employees choose other hospitals, it will reduce the claim to 30%.

Preferred hospitals are those hospitals that do not have the tendencies to overcharge or inflate the bills or misguide the patients to draw money. Employers as a company can also work with different hospitals to get discounted rates of consultation in return for adding their hospital to the preferred list. A list of preferred hospitals must be added to the policy.

An employer can take the service of an insurance broker to get these clauses placed in the policy and the claim settlements. For any query in this regard please feel free to reach Ethika Insurance Broking Private Limited.