Table of Content

What is Group Health Insurance?

In group health insurance, the insurer’s risk is spread among the fellow policy holders, as a result of which the members receive it at reduced premium costs compared to Individual health insurance plans. Hence making them affordable and cheaper than individual plans available on the market.  Also differences like-insurers, plan types, costs, and terms also exist between them.

A Group health insurance premium policy can provide maternity coverage to pre-existing diseases coverage. Apart from these they also cover a variety of diseases.

Source: Plancover

Group health insurance(GHI) or corporate health insurance plans or policies provide health insurance coverage to the members or the employees of a company or organisation. These are purchased as employee benefit packages by the employer.

What makes a GHI plan different?

In group health insurance, the insurer’s risk is spread among the fellow policy holders, as a result of which the members receive it at reduced premium costs compared to Individual health insurance plans. Hence making them affordable and cheaper than individual plans available on the market.  Also differences like-insurers, plan types, costs, and terms also exist between them.

A Group health insurance premium policy can provide maternity coverage to pre-existing diseases coverage. Apart from these they also cover a variety of diseases.

How does it work?

The companies and organizations purchase these Group health insurance plans and offer it to its members or employees. A 70% participation by group members is mandatory for purchasing these group plans. In most cases, Group health insurance policy covers not only individual employee wellness but also family members like dependent parents, spouse and the children. This coverage is provided as long as these employees are part of the company or organization.

Tax deductions for a Health Insurance premium plan

Source: Onsurity Blog

A win-win situation for the employee and employer is created as some of the plan creates eligibility to get tax deductions under the Income Tax act. Tax deductions for health insurance premium paid by the individuals come under the Section 80D of the Income Tax Act.

For an insurance premium paid for self, spouse and dependent children an individual can claim a deduction of Rs 25,000.

Also, an additional deduction on health insurance up to Rs 25,000  for parents’ are applicable  if the parents are less than 60 years of age. When the age is more than 60 years, the deduction benefit increases to Rs 50,000.

If both individual and parents are 60 years or above, the maximum deduction available under this section goes up to Rs 1 lakh.

In the pandemic era

In the current situation, especially as the world is fighting a Covid-19 pandemic, health insurance has become the need of the hour. As a result the government has made group health insurance for the employees mandatory as a part of COVID operating guidelines.

In the recent Insurance Regulatory and Development Authority of India (IRDAI) circular, it states that "Reference is invited to Order No. 40-3/2020-DM-I (A) dated 15th April 2020 issued as part of the Consolidated Revised Guidelines by Ministry of Home Affairs (MHA), GOI. As per the said order, inter alia; the following are stipulated:

All industrial and commercial establishments, workplaces, offices etc. shall put in place arrangements for the implementation of Standard Operating Procedure (SOP) before starting their functioning. As per clause no. 5 of Annexure - II of the said SOP for social distancing for offices, workplace, factories and establishments, medical insurance for the workers to be made mandatory, as per the circular”

In this circular,the insurers have been advised to offer comprehensive health insurance policies to individuals or groups to enable the organisations to fall in with the Government’s directions. Also the regulatory board has advised that these comprehensive health insurance plans be created with simple wordings and conditions and at an affordable cost for the stated organisations.

It is noted that under Covid-19 coverage a variety of Insurance providers cover hospitalization charges, treatment expenditure, ICU expenses and many more.

Group health insurance(GHI) or corporate health insurance policies are purchased as employee benefit packages by the employer. The cost of the premium is much lesser in the Group Health Insurance policy when compared to an Individual health Insurance policy. This is because the insurer’s risk is spread among the fellow policy holders. In the current Covid-19 pandemic era a Group Health Insurance policy can cover from hospitalization to treatment for Covid-19 which can make an employee be less worried about him and the family and focus on the long term goals of the company.

Why should you buy GHI for your employees?

The world is fighting against Covid-19 pandemic,and as a result Health Insurance has become mandatory for every individual. The Government has also stated that Group Health Insurance (or Covid Insurance ) is mandatory for every employee working in an organisation or a Business institution. This was announced as a part of post-covid operating guidelines.

Hence it is observed that when a GHI health insurance is purchased for the members of the organization, a sense of safety is created among  employees boosting their confidence at work helping them stay more inclined towards the goals of the company.

Here are a few other reasons why GHI policy purchase for the employees might be a good idea.

Create financial protection during Covid-19 pandemic

From the time Covid-19 pandemic struck the world, one common thing that was seen throughout any type of business was pay cuts. This created a downfall in the economy of the country  while also affecting the finances of employees.

Hence creating a financial security to bear with the medical expenses that may arise due to the deadly coronavirus. (Corona Kavach Policy) This can make them medically and financially secure.

Enhancing employee retention

Jobs that provide a sense of security are always valued by individuals. When a company provides GHI health insurance to its employees and their families, it not only provides them with financial security but also creates an overall contentment about the fact that the company cares about their employees as well. Hence this boosts employee retention and loyalty.

Offering protection from severe illness

In our country more than 75% percent of the population is getting affected by lifestyle diseases. The high-pressure jobs, lack of physical activity are some of the main causes. Further it is also noted that more than 61% of illness hospitalization and death are also caused by lifestyle diseases.

So GHI health insurance can safeguard  employees from these diseases at the earliest. GHI can come handy during diagnosis and treatment of these diseases.

Boosting employee motivation and mental health

Just like Happy wife, happy life, a mentally healthy employee makes the organisation a happy workspace which creates successful companies. Humans are motivated when they are provided with security and happiness. This will increase their working efficiency. This further boosts employee mental well-being.

When employees are subjected to stress due to their financial status and  personal problems, these perks can offer them mental peace to a larger extent. Thus, increasing the productivity in their workplace.

What to look out for in a GHI health insurance?

As we saw a few reasons why Group Health Insurance can be beneficial for the employees, here are a few things to look out for in a GHI policy.

Extended coverage for the family members

A GHI health insurance policy can include the employee as well as the dependent family members like parents, spouses and children. This can provide a wider coverage and the employee can be  stress free regarding health and financial security.

Easy claim process

The claim process in the insurance policy must be easy and simple. The turnaround time for the claim  should be swift and   hassle  considering the legacy of the employee. It must be a small process -  like showing the health insurance card must be enough to initiate the claim.

Covering pre-existing diseases

A GHI policy must cover diseases that are pre-existing in an employee from the day he/she joins the organization. As a result there is a zero waiting day period created in covering any pre-existing illness.

Maternity coverage

Providing maternity coverage for the employees or their spouses can be the best advantages offered to young employees. The policy that can cover both c-section and normal deliveries are an added benefit.

A GHI health insurance policy purchase for employees can create a sense of security in employees regarding their health and the health of their family. This could improve employee motivation and boost mental well being during the  tough times like Covid-19.

Group Health Insurance vs Individual Health Insurance (GHI vs HI)

Getting health insurance for oneself and their family is always a great idea. If you are reading this, you probably know the benefits of having health insurance and how it comes handy during medical emergencies, allowing us to get the best medical help possible rather than waiting to get the finances ready for the treatment.

In the current scenario, there are a pool of health insurance companies offering a bunch of different health benefits plans. A medical emergency can wipe out our savings, a robust health insurance policy offers solid protection from this scenario and helps us make decisions about long-term investments.

Having said this, we are often confused about opting a Group Health Insurance policy or buying an Individual health insurance policy. What if you are included by your employer in a group health insurance policy? Is it better than an Individual health insurance policy? Let’s analyse and find out key differences behind group health insurance vs individual health insurance.

Breaking down: a GHI health plan vs Individual health plan

The company provides the group health insurance, thus the company covers the medical expenses created by you and your family during your employment tenure in the organisation.

Even if there is a similarity between a GroupHI health insurance and individual health insurance, a GHI health insurance policy has many other advantages. Let’s see them one by one.

Source: Coverfox.com

Company pays the premium

In a group health insurance plan, the premium is paid by the company and not the employee. Hence, it makes the insurance free.

Extended coverage

When an employee is getting covered in a GHI health insurance, it also means that the privilege is extended to your family members as well. Maternity coverage is also offered for the employees and their spouses, but an individual health insurance policy may not offer that.

Zero waiting period

In a group health insurance the health cover offered by the company is valid from the first day it's offered to you. Hence, the waiting period for hospitalization is waived off.

Medical check-up requirement

The biggest gain of this group health insurance policy is that pre-existing illness is covered from day 1. Also there is no necessity of undergoing a medical check-up before enrolling to a group health insurance policy. Whereas, individual health benefit policies require mandatory health check-ups.

Assistance of a relationship manager

Often, insurers assign a relationship manager to the employees to assist with paperwork, answer queries and apprehensions. In individual health policy, this is not the case. In individual health plans, one is often required to co-pay the dependents over 60 years of age.

Limitations

Like there are two sides in a coin, there are certain limitations in Group health insurance over Individual health insurance plans. Like the following.

  1. A group health insurance policy becomes invalid after retirement.
  2. Sometimes cost conscious companies may ask the employee to pay the premium and sometimes may not offer coverage to family members.
  3. In a group health insurance policy, one cannot customise the plan according to individual needs.

Group Health Insurance vs Individual Health Insurance: a comparison

If we are to draw a comparison table about a group health insurance policy and individual health insurance policy based on various key factors like age, power of cancellation, employment tenure etc., this is what we obtain.

Factor Group Health Insurance Individual Health Insurance
Cost of premium In a GHI policy, the cost of the premium doesn’t increase with the age of the employee. In an individual health insurance plan, the cost of premium increases with the age of the insured.
Power of cancellation The insurance company holds the power of cancelling the policy. The power of cancelling a policy lies with the insured.
Employment tenure The coverage of the policy is valid only till the employee is part of the particular organisation. The employment tenure has zero effects on an individual health insurance policy.
Contract holder The company holds the contract of the insurance company and the employees are distributed with the insured certificates. The policy holder holds the contract of the insurance policy.
Conditions It depends on the financial stability of the employer or the organisation. It depends on the age and medical conditions of the individual as the health insurance company will consider all risk factors.

Group Health Insurance (GHI) for employers - why?

Good health and wellbeing helps people to work productively and efficiently towards the business goals and objectives of the organization successfully. In the current scenario, lifestyle diseases are taking a toll on the health and wellbeing of an individual. The ongoing Covid-19 pandemic scenario has even made healthy people sick.

Basic health requirements are becoming costlier. The increase in healthcare expenses and diseases has made the need for health insurance policy inevitable for having a strong finances at tough times.

Providing a Group health insurance to employees can not only benefit them but also greatly benefit the organization or the employer. Let’s see how.

Lower tax benefits

According to the Income tax regulations in India, if the employer pays the group health insurance premium on behalf of the employees, then employers are allowed to claim the entire premium amount and avail tax benefit.

Source: Dialabank

The Income Tax Act states that “Any amount paid by the employers for the employees’ benefit will be treated as Profit in lieu of salary”. The premium amount paid mostly comes under the category of under general business expenses. These tax benefits can be availed by different business types like sole proprietorship, partnership firms, companies (public or private), etc.

Happy workplace creating happier employees

There is no greater wealth than being healthy and happy. The mental well being and happiness are considered very important owing to the stress that one undergoes everyday.

Having medical insurance cannot guarantee good health but can support and provide financial assistance during any tough times. Hence it empowers them and also makes them feel they are cared for.

Source: Forbes India

Loyalty and retention of employees

As mentioned earlier, happy employees make happier workplaces. Employees are inclined towards jobs that provide them security. Providing group health insurance can help the company to retain these talents as they will be happy which makes the possibility of them leaving the company lesser.A successful company can be made as the employees are loyal and happy, increasing the employee retention rate.

Goodwill generation and upliftment

There is nothing better than hearing “this is a good workplace to work in” from the employees itself. Providing an insurance cover can uplift the employee and also create a good brand name for the employer in the industry. This promotes the goodwill of the company and makes existing employees feel cared for. Thus creating a positive outlook.

Convenient and Economical

The employer does not need to worry about managing insurance-related processes as nowadays the insurance companies are tech-savvy. In the current scenario the digital-first insurance companies have made policy purchases, customer service, and claims settlement easy and convenient. An employer can pay the premium on a monthly, quarterly or yearly basis based on the convenience of the organization.

The group health insurance is carefully curated in such a way that it benefits several members of the organisation. This makes the cost of the premium to be paid lesser as the risk involved is spread across different members of the company, hence making the group insurance plan cheaper and economical than an individual health insurance plan.

Source: EMS cognito

Being aware

If you are an employer who is in search of a good group health insurance plan for your employees, make sure to read the fine print of the insurance policy to understand the coverage in detail. The provider must be able to clear any doubts and give clarity regarding the same.

Choosing the right group health insurance plan for your remote team

Group health insurance is one of the affordable health insurance plans available in the country. As per the post Covid-19 lockdown guidelines, it is mandatory for employers/organizations to offer the employees group health insurance.

Thus, it makes it important for the employer to understand the group health insurance plans and how it works. Few important aspects like how the premiums are calculated, terms and conditions associated with the policies have to be studied carefully.

Employees highly value the benefits of group health insurance. Group health insurance helps the company to identify and solve the risks faced by the employees. The rise in the cost of healthcare and hospitalization can lead to financial instability and group health insurance can largely help the employees during this crisis.

Here are a few things to keep in mind before buying a group health insurance for your remote team.

Source: Pixy.org

Effectiveness of communication

While purchasing a group health insurance from an insurance company, it is important to see how the insurer responds and effectively communicates during the ongoing insurance tenure. During the times of need, an employee must be able to communicate with the company in ease.

In most cases the insurance company hires a third party for communication purposes and one has to make sure that the respective third-party administrator is good enough or not.

An insurance company with a good service track record would be able to add and delete employee records in the policy books, with minimal intervention from your side.

Source: JotForm

The Health Insurance premium

While deciding about the insurance company, it’s important to understand about the premium, product and service aspects. When an insurer offers lower premium plans, there are chances that they might have a poor customer service.

It is important to conduct reference checks with the current group health insurance clients understand regarding their service levels. An efficient insurance company can provide the employees with best deals.

Choosing the sum insured

The sum insured is the maximum amount of money per individual that will be paid by the insurance company, in case the employee is hospitalized. The important points to be noted while deciding the sum insured for group health insurance are the type of hospital the employee might prefer and the rising medical inflation costs.

The additional sum insured goes cheaper as the premium goes up. For example, a 6 lakh cover costs as much as a 3 lakh cover. The premium costs for the high sum insured and the additional money spent if insured a lower sum might be equal.

Source: SCB

Geographical coverage of hospitals

Accidents and diseases can take place anywhere in the world. Hence, while choosing a group health insurance, it's important to know if it covers the entire country or not.

The list of hospitals gets updated every policy year. If it covers the entire country, then one has to know the list of network hospitals available. This is crucial if the company is based in a non-metro city.

Extended coverage and benefits

The employees will love it if the group health insurance coverage is extended to his/her dependent family members. One has to think twice about this as the comprehensive coverage of the employee’s families may cost twice the premium costs.

Opting for a group health insurance plan that provides maternity coverage for the employees or their spouses is crucial especially if you have a young team.

The main purpose of a group health insurance plan is to provide employees with healthcare benefits and employees must find those benefits actually valuable. The type of benefits provided in a group health insurance plan should be carefully taken into consideration when choosing the best group health insurance plan for your employees. For example: India is worstly struck by the Covid-19 pandemic. The second wave of Covid-19 in India is like a tsunami. More and more people are hospitalized and are undergoing treatments. Ensuring the group health insurance covers the same is a priority.

Waiving off waiting periods

The waiting period taken by the employees to undergo certain types of treatments has to be waived off. The waiting periods are categorised into

  1. Initial waiting period

    The initial waiting period is mostly 30 days. In the first 30 days of insurance policy purchase one can take claims only for accident related hospitalization. No illness/diseases will be covered in these first 30 days.

  2. Pre-existing disease waiting period

    Pre-existing diseases are specific diseases like diabetes, blood pressure, thyroid etc., which exist at the time of policy purchase. The waiting period here is about 3 to 4 years typically. Insurers will cover these diseases only after this waiting period.

  3. It is advised that the group health insurance plan be carefully chosen and one can choose to pay a high premium so as to waive off any waiting periods. This is a major advantage in the GHI plan when compared to other individual health insurance plans.

Staying informed

There are plenty of customization options available in the market to purchase right group health insurance plans for your remote team. The right service, expert advises, purchase assistance and easy policy renewal terms are a few important aspects of any group health insurance policy.

FAQ’s

For Employees

Q1. What is Health Insurance?
Health Insurance is a type of insurance product that covers your medical expenses in case of emergency. These expenses could be hospitalization costs, cost of medicines, or doctor consultation fees.
Q2. Why is Health Insurance important?
Medical Care is generally expensive. Buying health insurance can help you and your family during emergencies.
Q3. How does Health Insurance work?
Health Insurance is a piece of contract between the policyholder (you) and the insurer. The policyholder pays a small premium and in turn, the insurer takes care of your medical expenses. Ie: Hospitalisation Costs, Doctor consultation fees etc etc.
Q4. How to claim Health Insurance?

5 steps to claim your health insurance

  • Fill your claim form thoroughly.
  • A signed medical certificate from your doctor.
  • Discharge Summary (Original)
  • Hospital bills & receipts (Original)
Q5. Is Health Insurance tax deductible?
Yes, under section 80D of the Income Tax Act, the premium paid towards health insurance is tax-exempt.
Q6. What are the benefits of Health Insurance?
  • Cashless treatment.
  • Medical expenses are covered.
  • Long-standing critical illness is taken care of.
  • Tax exemptions.
Q7. What is the restoration benefit in Health Insurance?
Restoration benefit is something that an insurer offers once you exhaust your premium (after a medical emergency). The insurer restores your original sum that was previously insured.
Q7. What is the restoration benefit in Health Insurance?
Restoration benefit is something that an insurer offers once you exhaust your premium (after a medical emergency). The insurer restores your original sum that was previously insured.
Q8. Which Health Insurance is best in India?
There is not one but many health insurance policies provide great benefits to policyholders. To name some of them - ICICI Lombard Complete Health Insurance Plan, Star Health Family Optima Plan, Max Bupa Health Companion, Star Health Comprehensive Plan.
Q9. Will I be allowed to cover my family under my health insurance?
No, you cannot cover your family under your insurance. You can however buy a separate family/group insurance policy.
Q10. What are the types of health insurance plans I can buy?
  • Individual Health Insurance
  • Family Floater Health Insurance
  • Critical Illness Insurance
  • Hospital Daily Cash Benefit Plans.
  • Senior Citizen Health Insurance Plans
  • Group Health Insurance
Q11. How is health insurance different from life insurance?
In a life insurance policy the dependents/nominee are paid a lump sum of money on the event of your death whereas a health insurance policy offers financial assistance during diseases or hospitalization.
Q12. Is my health insurance policy valid throughout India?
Medical emergencies can happen anywhere around the world. Most health insurance plans cover anywhere in India, make sure you read all the documents related to the network hospitals provided throughout the country.
Q13. What are the documents required to obtain a health insurance claim?
The mandatory documents required are a valid identity proof, the health insurance card, hospital bills etc., during the time of claim. In the case of cashless claims a pre-authorization form is required.
Q14. What if I am admitted to a non-network hospital?
Treatment in a non-network hospital might not be valid for a claim right away. It works in a reimbursement process, where you have to pay the medical bills and then ask for a reimbursement from the respective insurer with all the valid documents.
Q15. How many claims are allowed in a year?
Any number of claims are allowed in a specified year unless there is any specified number of claims mentioned in the policy. However, the sum insured is the maximum limit of money that can be claimed.
Q16. What is a waiting period in a health insurance policy?
A period of 30 days is the waiting period from the date of policy purchase, it simply means it takes 30 days time to get into effect. During this period any hospitalization charges incurred are not payable by the insurers.

For Employers

Q1. What is Group Health Insurance?
Group Health Insurance is a type of insurance policy that is offered by an organization to a group of individuals - usually happens in an employer-employee setup. The insurance premium in this case is entirely owned by the employer.
Q2. Is group health insurance mandatory for employees?
Yes, post the nationwide lockdown in 2020, medical coverage for employees has become a norm.
Q3. Can independent contractors be insured under Group Health Insurance?
Usually not. But some group health insurance policies allow some flexibility on this issue.
Q4. How much of the premium should an employer have to pay?

In most cases, the employer has to pay at least 50% of the entire policy premium. However, the dependent coverage need not be covered.

Q5. Are pre-existing conditions included in the coverage?
Yes, all pre-existing conditions are covered. This is with respect to the ‘Affordable Care Act’ passed in 2010.
Q6. How Many Employees Are Required To Qualify For Group Health Coverage?

Minimum two employees are required for a group health insurance policy. In addition, Insurers also expect at least 50% of your employees to be enrolled in a GHI policy.

Q7. What are some of the specific covers included in your group health insurance policy?

Apart from the standard inclusions a group health insurance policy also covers.

  • Pre-Existing Diseases if any
  • Waiting Period waiver
  • Maternity and newborn covers from day one
  • Provides coverage for dependents (Kids, Spouse, Parents)
Q8. Can employees opt out of GHI?
Yes, employees can opt out of insurance plans that their employers offer. And there is no penalty for opting out of coverage.
Q9. Is a medical examination required for the employees for a GHI policy purchase?
Generally no, a group health insurance plan does not require a medical health check-up for the employees before the policy purchase.
Q10. How does a company benefit from buying a GHI policy?
A company can avail tax-benefits, pay low cost premiums and create a goodwill generation among the employees on opting for a GHI plan.
Q11. Does the price of the premium in a GHI plan vary?

Yes, the pricing of a GHI plan can vary from company to company as the number of employees employed in each company is different.

Q12. Is it possible to buy a GHI plan for small business owners with 10 employees?
Yes, as there are many companies that offer a customized GHI plan for small businesses with limited number of employees.
Q13. How is the premium amount calculated for a GHI plan?
In a GHI plan, the premium amount is calculated based on the age of the employee, location, the number of dependents and the type of coverage required in the plan.

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