In recent times employers have realised the need for employee healthcare as an essential aspect of the workplace, which is why they offer group health insurance policies to their employees. It is considered a great employee retention initiative and motivates employees to work better.
Employees have also started relying on such group policies offered by employers as they consider it a great welfare measure. In most cases, employees consider it a better option, especially when they do not have the budget to buy their own policy.
Thus, it becomes a win-win situation for both!
Now, you (as an employer) would want better clarity on what is employees’ group health insurance and how to choose the best one. This article intends to answer these questions for you! Let’s start!
What is Employees Group Health Insurance?
An employee’s group health insurance policy covers the employees of an organisation under one policy. It comes with an array of benefits at lower premiums. These premiums are mostly paid by you on behalf of your employee. In cases where the employee’s parents are covered under the policy, additional premiums may be paid by the employee.
Let us now briefly understand the parameters of choosing an employees’ group health insurance policy.
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Things to Consider While Buying an Employees Group Health Insurance Policy
Here are a few parameters to consider while choosing a group health insurance policy -
Adequate Sum insured
The sum insured is the proportion of the amount that an employee can utilise in case of medical needs. The sum insured should be decided on the basis of increasing rates of medical inflation, regional medical cost variations, locality of the employees, and the hospitals in their vicinity, etc.
Room Rent Limit
A room rent limit is typically the amount up to which the insurer will cover the costs of the room your employee is hospitalised in. Generally, the limit is calculated as 1% of the sum insured. In some cases, the insurer may also specify a cap on the room type.
If the employee opts for a lower room with a higher limit or category, they will have to face the burden of paying the difference in room charge - if they choose a higher room category. Not only will they have to pay the difference in the room costs, but the insurer will also deduct associated medical costs.
For instance, say you select a sum insured of Rs. 5 lakhs, and the room rent limit is 1% of the sum insured, i.e. Rs. 5,000 per day. One of your employees undergoes a one-day hospitalisation and chooses a room with a daily rent of Rs. 10,000. So, they have essentially spent double the room rent limit. In this case, the insurer will cover only -
Rs. 5,000 for the room
50% of the associated costs [(5000/10000)*100]. Suppose the total bill comes up to Rs 1.2 Lakhs. The insurer will cover Rs. 60,000 - and not Rs 1.2 Lakhs.
The rest of the amount (Rs. 5,000 for the room + Rs. 60,000 of the associated costs) will have to be borne by the employee.
Hence, it is advised to choose a policy for your employees without or a lower limit.
Checking The Network Hospitals
It is the list of hospitals that the insurer has tie-ups with. When you get hospitalised in these network hospitals, you can avail of a cashless claim facility.
Check with the insurer if the prominent hospitals in the region and your employee’s locality are available on the insurer’s list of network hospitals. This will help your employees get immediate care and also enjoy the benefits of a cashless claim. As a responsible employer, you should choose an insurer that provides a wide range of network hospitals.
You can add riders to the policy to enhance policy usage for your employees. If most of your employees are of a young age, you can add the maternity benefit option to cover the maternity expenses of your employee or their family.
In other cases, you can add the hospital cash benefit to provide a specified amount per day of hospitalisation to your employee. This amount is used for meeting necessary medical expenses when hospitalised.
Waiving Off Waiting Periods
Health insurance will not be available for claims right from the first day of policy purchase. The insurer will impose “waiting periods” - predetermined periods during which the insurer will not pay for specific treatments/diseases.
Initial waiting period– 30 days from the date of the policy issue. A claim cannot be made during this period except for accidents.
Pre-existing disease waiting period – A pre-existing disease is a medical condition that is diagnosed or treated for 4 years prior to the date of the policy issue. Most health insurance plans come with a waiting period of 2 to 4 years for pre-existing diseases.
Specified disease/treatment waiting period – The insurer will impose a waiting period of 2 to 4 years for a specified list of conditions like hernia, chronic kidney diseases, etc.
One of the best aspects of a group health insurance policy is that you can waive off these waiting periods by paying an additional premium. This is a standout feature from comprehensive health insurance and is recommended to be bought with the policy for covering your employees from day one.
Covering Immediate Family Dependents
You can choose to provide extra care and welfare by covering the healthcare needs of your employees immediate family members, like their spouse, child, or parent. However, you should know that it might cost you more! So, this is a decision you should take after deliberate consideration with your insurer, as you are the policy negotiator.
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Employees are better motivated and stay longer with an organisation that cares for their welfare. And the best way to offer welfare to them and their family members is by providing an employees’ group health insurance policy. All you have to do is buy a policy that will ensure their medical needs will be covered.