Why You Shouldn’t Rely On Employer Health Insurance?

A job in a good company comes with a bunch of exciting perks, over and above the salary, like – employee discounts and bonuses, trips abroad, free food on campus, etc. One of the more important benefits is health insurance.

Your employer pays complete or partial premiums and you get a health insurance cover in return. It usually covers you, your family members and sometimes parents too.

This means you would no longer need to get your own medical coverage…right?

It’s wrong. While you might feel that a corporate plan saves you from neverending paper and dreary insurance processes, you need to understand that it isn’t protection enough. Why? Let’s find out - in this article!

4 Reasons You Shouldn’t Rely Only On Your Employer Health Plan

• Limited Coverage

  Employer health insurance policies generally have low coverage. As per a survey report, the median medical insurance coverage provided by employers is around 3.50 Lakhs. As per our estimates, the cover one actually needs as a part of long term personal finance planning is in the range of Rs. 10 Lakhs to Rs. 15 Lakhs.

  Moreover, employer policies could have several limits around room rent/category eligibility, copays as well as network hospitals.

  Employers tend to stick to the bare minimum cover and cover amount to take care of minimal immediate risks and also to minimise costs. In case your health expenses are higher than the cover amount specified in your policy, you will have to pay the balance out of your own pocket.

  For instance, Reeta has an employer health insurance cover of Rs. 4 lakhs. The policy also covers her spouse and dependent parents. Her father starts developing some cardiovascular complications, for which he undergoes medical tests at the hospital. And the tests reveal that he will require a coronary bypass surgery. Now Reeta's employer insurance has a coverage limit of Rs. 4 lakhs, while the total medical expense has come out to be Rs. 6 lakhs.

  Hence, she has to pay that huge extra amount all by herself - which she could have saved if she had a personal health cover - with an adequate sum insured.

• No Scope For Personalization

  Besides being a less-than-optimal cover, a corporate health insurance policy is not personalised to your family's medical needs.

  An insurance cover, as we know, is an extremely personal product that must be tailored to our requirements. However, a corporate policy is designed considering the budget limitations your company might allocate. A 'one-size fits all' plan won't be personalised to your and your family’s medical history.

  The coverage terms may also change. For instance, to save on costs, your employer may downgrade the policy. This means - reduced benefits for you.

• You May Not Get To Avail The Policy When You Grow Old

  The risk of getting a lifestyle disease like diabetes or hypertension increases as you grow older. With rising health problems, the premium cost increases.

  Once you suffer from a chronic lifestyle disease, the insurer may hike premiums by 20-50% to cover the additional risk. Besides the premium hikes, there's always a risk that your proposal might be declined altogether. So when you are already going through so much, you would also have to choose between - going without a health cover, or paying an unreasonable premium for a mediocre cover.

  Pro-Tip: The best time to extract the best health insurance cover from an insurer is when you are young and healthy. Lesser diseases = lower premiums.

• When You Leave The Company, You Lose The Coverage

  Sometimes, leaving your job isn’t a choice that’s under your control. If there is an economic recession, you could be forced to leave your job. Or if you have gotten a serious illness, you need to resign because you cannot physically work anymore.

  No matter what the situation is, your employer health insurance plan is tied to your employment. It will discontinue as soon as you move out of the company. So until you find a new job, you would be financially vulnerable if you have a medical emergency. Also, there’s no guarantee that your next employer will provide health insurance.

  While portability is an option, remember that it is the prerogative of the insurer to approve or decline the proposal for portability. Insurers have been known to decline portability requests for people with any previous claims or medical history, especially related to senior citizens.

When Should You Use The Employers Health Insurance?

• If The Company Pays

  That’s a no brainer. If the policy is provided by your company, with no additional cost, enjoy it while it lasts. Using the corporate cover instead of your personal cover will help you retain all your sum assured, plus earn No Claim Bonuses, wherever applicable.

• If There Are Short-Term Hospitalisation Expenses

  A personal health insurance policy comes with an initial window of time, where the insurer will not cover a list of diseases. This period is called the waiting period - and it varies across insurers.

  However, a corporate health insurance plan in India may not have any waiting period or exclusions on pre-existing diseases. For instance, your parents have a pre-existing disease, like diabetes, and you are being offered a company health insurance plan. In such a case, use that plan for the short term financial risk, while staying invested in a personal health plan to cover long-term needs.

There’s no alternative to good health, and good personal health insurance. A corporate medical scheme may sound like a great perk - with zero waiting periods and no pre-medical screening - but it is not coverage enough. You need a plan that will provide a complete safety net and peace of mind. So treat the employer health policy as a complement to a personal health insurance, and never a replacement.