Group health insurance provides comprehensive coverage to the employees against financial losses caused by expensive hospitalization. Employee group health plan covers expenses makes the employees more financially secure and improves their productivity. The retention rate of employees is also improved because the employees become more loyal to the company.
Group health insurance is one of the employers’ major employee health benefits. The premiums of group health insurance plans are low because the risk to the insurer is divided among multiple individuals. An employee group health plan also provides tax benefits to the employer on the premium amount paid for the plan.
Despite the advantages, you may find that your company’s employees are not utilizing the employee group health plan purchased by you. There are several reasons for the non-utilization of group health insurance plans. Some have been discussed here.
Why People Do Not Use Employee Group Health Plan
Not Suitable for Indian Market
Health insurance penetration in India is low. Earlier, companies in India didn’t need to provide group health insurance to the employees. However, the Government of India made it mandatory for companies to provide group health insurance to the employees from 1st April 2020.
Despite being made mandatory, employee health insurance may not be utilized by employees due to wrong perceptions and lack of awareness. The wrong perception is that employee health insurance is not suited for the Indian market, and the lack of awareness regarding the sum insured, illnesses covered, exclusions, and other aspects of the employee group health plan provided by the employer.
The employer should seek to dispel the perception among employees that group health insurance is not suited for the Indian market. As of February 2020, the health insurance industry in India was worth Rs. 45,997 crore, of which group health insurance policies accounted for Rs. 23,422 crores. Thus, the employees must be made aware of the fact that group health insurance has a lion’s share in the health insurance industry in India.
In order to increase awareness among the employees regarding the employee group health plan provided to them, the company should circulate emails and newsletters detailing the features and benefits of the plan. Representatives of the insurance company can also be asked to conduct seminars or webinars to explain everything about the group health insurance policy and answer the employees’ queries. The claim settlement process must also be clearly communicated to the employees.
Insufficient Sum Insured
The sum insured under an employee group health plan is as per the employer’s discretion, and the employees have no say in it. Employees are not inclined to raise claims under the group health insurance policy when the sum insured is low. Low sum insured usually does not meet the employees’ medical expenses, which leaves them with no reason to raise a claim. As a result, they either opt for individual health insurance or pay from their own pockets.
In this scenario, increasing the sum insured to a sufficient amount is a suitable way to ensure more utilization of the employee group health plan. It is also beneficial to opt for a group health insurance plan providing the facility to top up the sum insured. The sum insured should be selected based on the type of hospital your employees are likely to go to and the medical inflation rate.
By the rule of thumb, Rs. 3 lakhs is a suitable sum insured for metro/tier 1 cities. In case the family members of the employees are also covered, the sum insured should be Rs. 5 lakhs.
The parents and other immediate family members of the employees can be included in group health insurance policies. However, companies often do not include the parents and family members of the employees in the group health insurance policies.
In such a case, the employees who shoulder the responsibilities of old parents, spouses, and other family members do not consider the employee group health plan useful for their needs. Such employees are not likely to raise claims under the employee health insurance policy and instead opt for family floater health insurance which covers the entire family.
The employer should allow the inclusion of the parents and other immediate family members of the employees in the group health insurance policy. It can be done either by including family coverage as one of the benefits in the base policy itself or by enabling the employees to add their parents and family members to the policy by paying an extra premium.
Not Relevant to The Employee’s Health
The scope of the coverage provided by the employee group health plan may not cover the employees’ illnesses and treatments, especially the employees of advanced age groups suffering from chronic conditions. Inadequate coverage renders the group health insurance irrelevant for such employees.
Thus, the group health insurance policy should cover many illnesses, including critical illnesses. This is not a problem because group health insurance plans do not require medical screening of the intended beneficiaries. Even the employees suffering from any pre-existing condition are covered. The waiting period for pre-existing diseases and critical illnesses can also be waived off in group health insurance.
Employees Have to Pay from Their Pockets
An employee group health plan may not prevent employees from paying from their own pockets. Absence of coverage for many types of expenses such as ancillary expenses, co-payment clauses, and low room rent sub-limit results in employees requiring to dip into their own resources. This drawback discourages employees from utilizing the group health insurance plan.
The employer should opt for a group health insurance policy that provides riders extra benefits. The riders can be chosen by employees who need them by voluntarily paying more premium. Co-payment clause, which requires the beneficiary to pay a certain percentage of the claim amount, should either be absent or the amount must be below. The room rent sub-limit must be high or absent.
Employee’s Needs Being Ignored
If the employee group health plan does not fulfill the medical and financial needs of the employees, it is not likely to be utilized.
Thus, the company’s top management should seek input from the employees before selecting a particular group health insurance plan from a specific insurer.
Altogether, an employee group health plan satisfying the needs of the employees and having a smooth and easy claim process is more likely to be utilized by the employees. As such, organizations need to match the features provided by group health covers and the expectations of employees.
The best way to find out whether your employees are satisfied or not is to conduct an employee survey regarding their satisfaction levels. If your current group health cover is not serving its intended purpose, then why not port to Vital today? The best part? You do not need to pay heft annual premiums as it is based on monthly subscriptions starting from just Rs. 299/employee/month. To know more visit www.getvital.in/business.