Employees are the backbone of an organization and so, to keep them motivated, and for their welfare, employers provide different employee wellness benefits. These benefits help organizations attract new talent and also boost employee morale. A group health insurance policy is the most basic and the most important employee benefit measure that organizations should choose for their employees. Let’s understand what the policy is all about and how to buy your organization’s best coverage.
What is a Group Health Insurance Policy?
A group health insurance policy provides employees with health insurance coverage. The policy covers the medical costs incurred if the employees suffer a medical emergency and give them financial relief.
Some of the common features of a group health insurance policy are as follows -
- The policy can be bought by employers and other registered groups like clubs, trade unions, etc.
- One Master Policy is issued in the name of the employer while the employees are named as the insured members.
- The employer can pay the premium on behalf of its employees, or the employees can also pay their individual premium themselves. In some cases, the premium is paid by both the employer and the employees in a pre-defined proportion.
- A minimum number of employees are required for availing the coverage. There is, however, no limit on the maximum number of employees that can be covered under the plan.
- The policy is issued for one year after which it should be renewed for continued coverage.
- Employees can enjoy coverage under a group health insurance policy till they are employees of the organization that has affected the policy. If they leave the organization, the coverage terminates. Similarly, new employees get added to the coverage when they join the organization.
- In case of a claim, the insurance company settles the claim raised by the employees. However, coverage for other employees continues unaffected.
- The sum insured is decided mutually by the employer and the insurance company. The coverage might depend on their age, income level, or hierarchy in the organization for employees.
Important Aspects of your Group Health Insurance Policy?
If you are looking to invest in a group health insurance policy for your organization, you should ensure that you invest in the best possible coverage for your employees. To do so, here are some factors that you should consider when shortlisting the coverage -
The coverage offered by the plan
Group health insurance plans offer a standard set of coverage benefits, including coverage for inpatient treatments, pre and post hospitalization expenses, daycare treatments, ambulance costs, etc. Insurance companies also offer riders or add-ons that you can select at an additional premium to enhance the scope of coverage. So, when choosing a group health insurance policy, you should try and opt for a comprehensive scope of coverage for your employees. This would allow all-round protection and give your employees financial assistance in medical emergencies.
The sum insured
Under a group health insurance policy, the insurance company sets a maximum limit of the sum insured and allows you to choose any amount within the specified limit. Within your budgetary constraints, you should opt for the highest possible coverage. Medical costs have become quite expensive, and medical inflation is also a grim reality which you cannot ignore. So, opt for an optimal sum insured, which would allow your employees a decent level of coverage.
Premium vis-a-vis coverage
If you are paying the policy’s premium, the premium would be an expense for the organization. As such, you should always compare before buying because different insurance companies charge different premiums, and comparing can let you save on the premium cost. Many companies have brokers who help them get the premium quotes of different group health insurance plans, compare these quotes and negotiate on their behalf to get the best quote. While comparing, keep the coverage benefits in mind too because some plans might offer very low premiums by sacrificing the scope of coverage. So, compare the premiums vis-a-vis the coverage offered by the policy. Then, pick a plan which offers comprehensive coverage at competitive premium rates.
Most group health insurance policies extend coverage to the family members of the employees as well. Family members might include the spouse, dependent children, and dependent parents. When buying the policy, To the extent possible, you should ensure coverage for as many family members as possible.
There might be sub-limits on some coverage benefits under the group health insurance policy. For example, the most common sub-limit is the room rent sub-limit which caps the coverage in case of inpatient hospitalization. Sub-limits defeat the whole benefit of health insurance and should be avoided. Look for plans that do not have sub-limits, especially in the case of room rents. If some limits cannot be eliminated, ensure that they are liberal enough to cover the costs significantly. For example, if the plan allows maternity coverage for your employees, there would be a limit on such coverage which is unavoidable. In such cases, opt for plans with a higher coverage limit so that a significant part of the cost is covered.
Health insurance companies offer attractive discounts in their group health plans to lure you into buying their policies. Try and hunt for plans that offer the maximum possible discounts so that your premium expense is reduced.
The network of cashless hospitals in India
Health insurance plans allow cashless claim settlements if your employees avail treatments at a networked hospital. To ensure that your employees can easily locate the networked hospitals, you should choose insurers with the broadest network of hospitals.
The applicable waiting periods
Group health insurance plans are beneficial for employees because they, usually, do not have waiting periods. However, some plans might specify a waiting period for covering pre-existing conditions, specific treatments, and even maternity expenses. When buying a group health insurance policy, you should find out the applicable waiting periods in different plans. Choose a plan that either does not have any waiting periods or the lowest possible waiting period for specific conditions. Plans with limited or no waiting periods provide complete coverage to your employees and are better.
Coverage exclusions and hidden clauses
Group health insurance plans have coverage exclusions wherein the policy does not cover the incurred medical expenses. You should go through the exclusion list to understand the scope of coverage of the policy. Also, find out if the group health insurance policy has any hidden clauses or not. For example, the policy might not cover employees or their dependents after a certain age, or there might be a sub-limit or co-payment clause in some cases. Know these clauses because they limit the scope of coverage and try to avoid them if possible.
For your employees, a group health insurance policy depicts a low-cost way to avail of health insurance coverage. For employers, the policy is a way to promote efficiency and loyalty among employees. It also goes a long way in employee retention. Moreover, your organization can claim the premiums paid for the policy as a business expense and reduce its tax liability. Therefore, the group health insurance policy is beneficial for both the employer and the employee and we highly recommend companies of all sizes to explore the same.