Group Health Insurance

What Is Group Health Insurance and Why It’s Increasingly Relevant in Today’s Times?

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Health insurance is a safety net against financial damage caused by expensive medical treatment. From room rent and doctor’s fees to surgical procedures and medicines, every aspect of medical treatment in a hospital has become more and more costly. In this scenario, health insurance enables people to access high-end medical treatment without exhausting their financial resources. 

There are multiple categories of health insurance such as individual health insurance, family health insurance, senior citizen health insurance, and group health insurance. Here we will discuss the various aspects of group health insurance.

What is group health insurance?

Group Health Insurance covers a group of people working for an organization. A single health insurance policy covers all the group members regardless of age, gender, or socioeconomic status. The group health insurance policy can also cover the family members of the group members. Since employers mainly purchase this policy for their employees, it is also known as Corporate Health Insurance.

Both formal and informal groups can purchase it. Formal groups are business enterprises, companies, or professional organizations where the employees work for an employer. The employer purchases it in a formal group. On the other hand, the informal group can be a society or cultural organization. Here, the group administrator purchases the policy.

Eligibility for Group Health Insurance

The minimum number of members required to purchase group health insurance in India varies from one insurer to another and depends on the kind of plan. The minimum number of people required is usually 10, and this figure can go up to 50 depending upon the plan and the insurer’s policies. 

Depending on the policy type, the maximum age allowed can be 60 years or even 80 years. The minimum age is 18 years.

Employee Resignation - Group Health Insurance

Only full-time members of the group are covered under group health insurance. As soon as an employee leaves the organization, his/her policy cover ceases to function.

Features of Group Health Insurance

Cost is lesser here as compared to individual health insurance. This is because the risk to the insurance company is divided over a large number of people, which enables it to provide coverage at reduced rates. 

The premium of such a policy depends upon several factors such as average age of the employees, coverage benefits, degree of risk to the health associated with the job of the employees, number of people covered, and whether or not the family members/dependents of the employees are covered. All such factors can be fed into the policy premium calculator available on the insurance company’s website to get a clear idea about the expected premium amount.

Sum Insured in Health Insurance - Group Health Insurance

The sum insured in group health insurance varies as per the plan. The sum insured usually varies from Rs. 2 lakhs to Rs. 5 lakhs and more. The greater the sum insured, the more is the premium to be paid for the policy. 

The employer pays the premium of health insurance for employees. However, an employee can choose add-ons or extra sums insured by paying an extra premium. The employer can also go for an arrangement where the employees pay a part of the premium. 

Copay in group health insurance means the employees must bear a part of the claim amount while the insurer pays the balance. Such health insurance plans can come with a copay fee clause that mandates a fixed fee for covering certain expenses such as doctor’s visits, specific kinds of drugs, particular tests, etc. 

Coinsurance - Group Health Insurance

Group health insurance can also have co-insurance clauses. Under Coinsurance, the insurer can fix a certain percentage of the employees’ claim amount. For example, if the Coinsurance percentage is 10%, the employee would need to pay 10% of the claim raised, and the insurer will pay the rest 90%. Both Coinsurance and Copay reduce the premium amount.

The annual deductible is a certain amount that the employees need to pay in a year for availing coverage under the group health insurance plan.

Benefits of Group Health Insurance

This plan provides default coverage to all the employees of an organization. Employees who are unable to purchase health insurance due to high premiums or poor health are particularly benefited by a group insurance policy. 

Waiting Period - Group Health Insurance

There is no waiting period in group health insurance. This means even those employees suffering from chronic conditions such as diabetes or heart problems get immediate coverage. Also, no medical screening is needed.

In the case of family health insurance, the premium is charged for each member. On the other hand, group health insurance covers up to 5 family members/dependents of the employees without any cost to them. 

Individual/family health insurance policies offer maternity benefits as an add-on. But group health insurance plans provide coverage for both normal and C-section deliveries and newborn coverage for up to 90 days at no extra cost to the employees.

Employers get group insurance tax benefits on the premiums paid for health insurance policies. If an employee pays an extra premium for additional coverage, the premium amount can be claimed for deductions.

Group Health Insurance provides financial security to the employees against costly medical treatments. The plan cover family members as well. Thus, purchasing such a plan enables employers to increase the loyalty of their employees, which prevents them from switching to other companies.

Affordable Premium - Group Health Insurance

Group Health Insurance Premium is affordable for any employer. This is because such policies cost much less than individual or family health insurance plans.

The employer can opt to pay the premium for the group policy on a quarterly, annual, or monthly basis. 

Conclusion

Group health insurance benefits both the employers and the employees. However, it must be remembered that group health insurance is valid only during the employment period of the insured employees.

If you are looking for a group health cover at an affordable price, then check out Vital. It is unlike any health cover you have come across before.

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