Corporate Health Insurance: Advantages and Disadvantages!

Corporate Health Insurance policy refers to the type of insurance policy that is designed for the employees of an organization. The policy provides coverage for the expenses in case of health emergency, accidents, financial losses and more.

Considering the rising figures of start-ups or SMEs in India, it is becoming important for an employer to restore the talents within the organization.

But How?

Here the Corporate Health Insurance comes in, which protects the employees’ basic requirements wherein the employers could retain their best resources.

From an employee’s perspective, the Corporate Health Insurance policy is seen as the second best thing next to monetary compensation and it makes the employee value and respect the organization.

Let’s know how this policy works for you.

Types of Corporate Health Insurance Plans

A Corporate or Group Health Insurance plans covers a group of professionals for medical emergencies. These plans are of two types:

  1. Contributory plan
  2. Non-Contributory plan

Contributory Plan

Contributory plan as the name suggests, where the group members/employees need to pay a part of the premium along with the employer to be insured under this policy.

Non-Contributory Plan

Non-contributory plan as the name suggests where the employer pays the full premium without any contribution from his/her employees.

How Much Does It Cost?

It depends on the type of Corporate Health Insurance plan whether it is a Contributory or Non-contributory plan, the cost of it can be decided. It varies from one condition to another or from one insurer to another.

How Corporate Health Insurance Plan Differs from Regular Health Insurance Plan? 

Despite coming from the same family that is Health Insurance, Corporate Health Insurance slightly differs from the regular health insurance plan. Here’s how:

  • Corporate health insurance is provided by the employers to the group of employees in an organization. On the other hand, a regular health insurance plan can be purchased by an individual or a family.
  • Under Corporate Health Insurance policy, medical examinations are not mandatory unlike some of the regular health insurance plans.
  • The premiums are considerably smaller as compared to the regular health insurance. It is because of the larger number of employees insured.

How Does It Work?

As mentioned above, this policy is provided by the employer to the group of employees. It offers them the optimum health coverage.

  • Under this policy, a fixed sum insured option is ensured for emergency hopitalisation expenses. The hospitalization should be more than of 24 hours.
  • In case you want to increase the sum insured amount, you would have to pay an additional premium.
  • It generally includes your spouse and children.
  • Some Corporate Health Insurance plans have extended coverage for parents as well.
  • The premiums are to be paid by the employers based on the type of policy opted for.

Since, the corporate health insurance plan is provided by the employer, the employees rarely check for the clauses and the coverage mentioned in the plan. They may lead to serious disappointment during a claim if you find yourself left with insufficient coverage. So, one should not hesitate in asking questions about the features and exclusions of the plan.

Advantages of Corporate Health Insurance

Corporate Health Insurance comes with several advantages. They are as follows:

No Medical Check-up

The policy is provided without pre-medical check-ups, even for senior citizens. Wherein other health plans, a pre-medical test may be required depending on the age or pre-existing medical conditions.

No Waiting Period

In case of a regular health plan, pre-existing illnesses will be covered after a waiting period of 2 to 4 years. Even certain specified medical conditions and maternity benefits are also subject to a waiting period. But being the biggest advantage of a Group Health Plan, the covered members get insurance coverage right from the day one. 

Pre-existing Diseases

Pre-existing disease refers to the diseases that you might have before getting insured. With Corporate Health Insurance, one can claim despite having any pre-existing disease.

No Contribution in Premiums

The premium is paid by the employer mostly. However, if you plan to increase the sum insured or top it up with another health plan, you will have to pay for an additional premium.

Disadvantages of the Corporate Health Insurance

Corporate Health Insurance has some disadvantages also. They are as follows:

  • Policy Tenure

Corporate health insurance provides coverage until you are employed with the organization. The policy terminates when you leave the organization.

  • Not All the Plans Offer Coverage for Extended Family

Not all the Corporate Health Insurance plans provide coverage to the employee’s family. It is one of the major cons of this policy. If you’re married and have children and dependent parents , then Corporate Health Insurance might not be a good fit for you. You might have to opt for a personal health insurance policy as the coverage under Corporate Health Insurance may seem insufficient for you.

  • Pre-defined Room Rent Limit

In Corporate Health Insurance plan, the admissible room-rent limit is pre-defined. So, if you opt for a hospital room with higher tariff, the additional charges have to be paid by you only.

  • Coverage Amount

The coverage amount in the Corporate Health Insurance policy has a limit of up to 4-5 lakh. In case of a serious illness or accident, this much of amount would only cover 20%-30% of the total expenditure.

To Conclude!

Since most of the organizations are providing corporate health insurance plans and as the insurance company evaluates the risk appetite of each member covered in the plan. Following that, the risk factors are combined and the premium is fixed on the averaged risk factor of the group.

Keeping the facts in mind, it would be a better idea to opt for a family floater health insurance plan separately that gives you better coverage, which would cover your family and parents for all the health related emergencies.

Written By: PolicyBazaar - Updated: 23 March 2021