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.
In a scenario where the employer does not want to bear the cost of premium fully or partially it can act as a facilitating vehicle.
Run an effective campaign to enroll: Company as an employer must run a campaign to encourage most of its employees if not all, to enroll in group insurance with parental insurance.
The campaign must be driven to inform the benefits of such enrollment and how the company is supporting by choosing the best broker, including appropriate clauses and dealing with the best insurance provider. Such a campaign, if led by CEO or HR head will have more positive impact on the employees. Certain insurance brokers also create and run a campaign for their clients.
Ensure portability of policy: Employers, while negotiating with insurance providers, must ensure that the employee who is paying the premium must be allowed to carry forward the policy when he is moving to another company. This facility of carrying forward is called portability of policy.
Portability of policy can be a group to an individual or a group to a group. 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.
Facilitate senior citizen health insurance: It’s well said that if you can’t help by contribution, you can still help by giving an idea or a direction. Similarly, employers who can’t afford to support financially at least, can support their employees by arranging a facility to take the right decision. If parents' health is taken care of, employee’s half the diversion is taken care of.
In case an employer chooses not to spend any amount on medical expenses of employee’s parents, it can at least encourage its employees to take a senior citizen health insurance policy for their parents. An employer on behalf of its employees seeks quotes for such a policy and with the help of its insurance broker, supports its employees to get the best insurance plan.
There are various plans and benefits offered by many insurers. Some of the plans are specially designed for people suffering from ailments like high blood pressure, diabetes, obesity etc. The main challenge is that individual health insurance is only for healthy people. One must declare the family history and current health conditions while taking the policy. The insurer then decides whether to cover or reject the proposal. Even if they decide to cover existing ailments, it gets covered after a certain waiting period. This makes it tough for senior citizens to get the appropriate health cover.
Senior citizen health insurance policy is designed to serve the health needs of senior people who have crossed 60 yrs. Of age. These policies cover hospital charges and medical expenses incurred due to sickness or injury due to an accident. More over in senior citizen health policies the waiting period set for pre-existing diseases is also lower than the 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 banks and offer those policies to employees.
More over employees can claim additional tax deductions under section 80D for the premium paid for the health policy taken for parents also.