How Do You Know If Your Startup Needs Group Health Insurance?

Hiring suitable candidates and retaining them is one of the key challenges for a start-up. The start-up must have a team that is in sync with its vision. Getting the right candidate on board never comes cheap. With an increase in the cost of medical treatment, health cover is viewed as a core need. With unforeseen threats to health due to COVID 19, the need for a health cover for self and the family has become imperative.

As a start-up, when you offer the health cover as a part of the annual CTC, it becomes a useful tool in attracting and retaining talent. As per the IRDA guidelines ( Insurance Regulatory and Development Authority ), you can opt for group health insurance if you have a group of 7 people. In India, the decision to decide on the minimum size of the group eligible for insurance lies with the insurer. Public insurers are looking at a group size of 100 lives while the private insurers need a group of 50 lives to issue group health insurance policies.

Getting a group health insurance is easy if you leverage the exceptions below. As 7 lives is not the same as 7 employees. An organization like Nova helps you get the best health benefits for your team the moment the team size touches double figures.  

Exceptions to the Group Insurance Rule (employee number)

As an employer looking to buy a group health insurance policy, you should be aware of the group insurance rules' two exceptions.

You can add family members of the employees to the group.

In the start-up phase, you may or may not have a team size of minimum of seven employees. You can achieve the eligibility to purchase the group health insurance policy by adding the employees' family members to the group and attaining some 7 or 50 lives as the case may be. By covering the family members of the employees, you create a strong bond with them. It helps you to attract talent from big organizations as they no longer have to worry about losing the health insurance benefit if they come and join  you.

Insurers consider group dynamics of the companies seeking insurance.

As a start-up, you might have a situation where your workforce consists of part-time employees or senior employees above the age of 65, and you do not have a critical number of 7 full-time employees. Insurers today have the solution for you and are ready to consider your case to issue a Group health insurance policy.

The insurers have a special provision in such cases where there are part-time employees or contractual employees/ Senior employees or consultants ( 65 years of age or above) who otherwise are ineligible for group health insurance. As an employer having group dynamics as above still qualifies you to opt for a group health insurance policy. You can opt from various customizable group health insurance plans that include your employees' mental health, dental, eye care, wellness, and nutrition if you have a group of 7 to start with.

The above 2 exceptions are a great help for startups to buy a group health insurance plan  in the early stages of their startup. So if you have the employee strength nearing the double digits, it is time for you to go and pick up a group health insurance policy.

Picking the right policy

As a concerned employer, you have made up your mind to extend the benefit of group health insurance to your employees and their family members. It is recommended that you know how to answer the following questions before you decide to go with a specific plan or insurer.

• What are the right terms for your group health insurance policy?
• What are the hidden clauses you should look out for?
• How to select the right insurer?
• What are the indicators that develop trust in the insurer?
• Are you buying at the Right price?

What are the right terms for your group health insurance policy?

The following aspects are crucial and are to be considered while selecting the right group health insurance plan:

1. Do you wish to cover the employee or his/her immediate family( spouse + kids) and extended family (employee's parents) too.
2. The sum insured that you need for your employees: The sum insured limits are between 3-10 lacs.
3. Choosing room type and rent: The options start at 3000/day and go to no limit.
4. Do you wish to include maternity coverage?

Remember to check for the insurer's offer on pre-existing diseases and waiting periods for coverage. Negotiate for the coverage for any existing medical condition and waiver of the waiting period before finalizing the plan. Individual health plans generally do not cover any pre-existing medical condition and have a cooling period before the policy comes into force. A group health insurance policy should cover pre-existing medical conditions and should be in force from your employee’s first day in the company.

The premium for the group, health insurance policy, would depend upon the terms you pick up. Hence choosing the correct terms is important.

What are the hidden clauses you should look out for?

The insurers are known to include hidden clauses in the policy contract that defeats the entire purpose of purchasing the group health insurance policies. Be on the lookout for such clauses before you sign on the dotted line. The clauses are related to low room rent limits, pre-existing diseases, and waiting period for covering them.

The insurer would offer high insurance coverage but cap the room rent in the hospital at a lower denomination. The higher rates of the room rent include certain medical services needed by the patients like the cost of nursing care etc. With the low room rent capping, the patient will have to pay for such medical expenses, and most of these services will not be covered by the higher sum assured that you have opted for.

The biggest edge that the group medical insurance policy has over the individual health plan is that the plan covers the pre-existing conditions and is in force from day one. Any clause related to insurers not covering the pre-existing disease and including waiting periods will defeat the whole purpose of purchasing the group health insurance plan.

How to select the right insurer?

Compare the various insurance companies based on the following criteria.

• Their network of hospitals offering cashless options.
• Settlement versus claim ratio.
• Time taken for settlement
• Ease of claim submission and settlement
• Number of cases they have processed
• Amount of claims settled.

Researching the above will help you make an informed decision. Alternatively, you could also consider employing a broker who will do this for you and ensure you get the best possible deal.

What are the indicators that develop trust in the insurer?

Some indicators help you decide whether you can trust the insurer with your employees' claim settlements in the future. Cross-check the following before you agree with the insurer.

• Web presence and availability of an app.
• Ease of tracking the claim.
• Ease of submission of queries and response time.
• Turn around time for issue resolution.
• Assistance for claim filing and documentation.
• Types of queries that the insurer raises at the time of claim submission and settlement.

Are you buying at the right price?

The high number of insurers offering group health insurance plans can leave you perplexed. You must invite quotes from multiple insurers before you make a choice. You will find a lot of disparity in the pricing quotes for the same terms you want to purchase. So never trust the first quote that you receive. Do a thorough discussion on the pricing as there is always room for negotiation. Comparing the different price quotes for the same terms help you to uncover the hidden clauses. You should consider getting a Group health Insurance policy as soon as your employee strength is close to double digits, and use this as a strong lever for attracting and retaining talent.