4 min read

Why Company-Sponsored Health Insurance Is Much Better Than Personal Health Insurance?

Company-sponsored employee health insurance is beneficial not only to employees but to their employers as well. It enables employers to retain their top talent. This is the primary reason employers invest in Group Health Insurance (GHI) for their employees. Further, an employee feels engaged towards the organisation, which enhances productivity.

What is Employer-Sponsored Health Insurance?

Employer-Sponsored Health Insurance or Group Health Insurance is a healthcare plan that employers provide for the company’s workforce and dependents. The employer is responsible for choosing the plan and determining exactly what it covers.
Here are key employee benefits of employer-sponsored health coverage – and why you should be offering it:

  • It can reduce absenteeism 
  • It can be a recruiting tool
  • It can increase retention
  • It can boost employee satisfaction

Are employers required to offer healthcare coverage?

Yes, companies must provide health insurance in India post the Covid-19 lockdown in 2020.

In April 2020, the Indian government made it mandatory for all employers to provide a mediclaim policy for employees in India.

These days, one of the most significant benefits of full-time employment is eligibility for the employer's group health insurance plan. And as healthcare reform continues to evolve and affect individuals' and families' lives and finances, group health coverage through an employer becomes an increasingly valuable perk.
A sizable portion of medical costs paid through an employer's benefits package can be quite a comfort. After all, it's no exaggeration to say that except for the highly affluent, an individual without health insurance can be just one significant injury or illness away from financial ruin.

 Company-sponsored health insurance has several advantages one cannot get in a personal health policy, such as:

1. Pre-existing diseases are covered from day one instead of 2-4 year waiting periods

2. Many companies allow parents to be added to the policy. Adding parents is a crucial benefit since this is a higher risk segment, and medical expenses can go into lakhs.

3. Maternity coverage, if provided. This is quite common nowadays. 

4. Premiums can be as lowered by 50% or more, as compared to if an employee had to purchase a policy themselves
When you quit your job, if you've not made any claims on your company policy, you can even port your no-claim period to reduce the waiting periods on an individual policy.

That said, it's always good to have a personal health policy to not rely only on employers for our health insurance.

Covid has triggered the need for health insurance now more than ever. People-first organisations had recognised the need for a robust employee benefits program centred on health benefits, flexibility, mental health, and engagement. 

You can read more about the Basic Components Of Health Insurance Policies here.

Benefits For Employees

Affordable healthcare

Employees gain access to affordable healthcare that they may otherwise have been unable to access.

Treatment for chronic disease

Many plans offer access to mental health treatments and chiropractic services, often unavailable through the cheapest individual plans.

Improved morale

Studies have shown that employees with access to healthcare have higher morale and improved productivity.

No research required

With group plans, the employer takes care of choosing the plan and the provider. This saves employees time and effort in selecting the right plan for them.

Benefits For Employers

Attract better talent

Perks like employer-paid health insurance make your business more competitive. The best talent wants to work for employers that will care for their well-being.

Tax-deductible premiums

Employer health insurance premiums are tax-deductible. This can reduce the amount of tax you pay by thousands of rupees.  

A more productive workforce

With employee productivity impacted heavily by personal health and well-being, offering healthcare coverage could make your workforce more productive.

Lower insurance costs

The more employees enrolled in a healthcare plan, the more the risk spreads. Health insurers offer lower insurance costs when more people are enrolled in a healthcare scheme.

Common questions regarding Company-Sponsored Health Insurance that you may be looking for answers for: 

1. What is group health insurance?

Group health insurance provides coverage to a group of members. Usually, this coverage is taken for employees of a company.

2. What are the tax benefits of group health insurance?

The premium paid to provide a group health insurance policy for employees in India can be deemed a business expense. The Indian Income Tax Act of 1961 considers this expense 100% tax-deductible.

3. Does group health insurance cover pre-existing diseases?

Pre-existing diseases refer to ailments an individual is diagnosed with before or while buying health insurance. The group health insurance offered by Nova covers pre-existing diseases of employees from day one if any.

4. How can I avail cashless reimbursement under my group health insurance policy?

Employees can avail cashless benefits under their group health insurance if they have undergone treatment in a network hospital of the insurer and if the treatment is covered under their policy.

Let us help you take care of your employees. Schedule a call with us to invest in the best group health insurance for your team.

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