Corporate Health Insurance When Changing Jobs
As per the 2022 Workforce and Increments Trends Survey by Deloitte, the average attrition rate in India increased from 15.8 percent in 2020 to 19.7 percent in 2021. This means a majority of the Indian workforce is now looking for a job change after a hiatus of almost two years. But have you ever wondered, what happens to corporate health insurance when changing jobs? In the article below, we shall look at how group health insurance plans and employers are evolving to meet employee needs and the health insurance options employees have during a job change.Read more
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Corporate Health Insurance When Changing Jobs
Corporate health insurance or group insurance for employees is a policy wherein the employer pays for the health insurance premium on behalf of the employee. Having said that, a typical corporate health insurance coverage would end on the last working day of the employee at a particular job. Thus, an employee may have two options for corporate health insurance when changing jobs to cover medical emergencies. Either, the employee can convert the corporate health insurance to an individual policy, or buy a new insurance plan altogether. Let us highlight both these options in detail.
Portability of Corporate Health Insurance When Changing Jobs
The Insurance Regulatory and Development Authority of India (IRDAI) issued regulations in 2020 stating that employees covered under a corporate health insurance plan can migrate or port to an individual health insurance policy. It is to be noted that not all employers offer this facility for migration. So, an employee must first check with the current employer, if such a facility is provided.
Secondly, only a few insurance providers offer this portability option. Additionally, even if the insurers offer this option, they have the complete right to decide on the terms and conditions of the new policy as well as the premium amount.
The basic steps of portability of corporate health insurance when changing jobs (if the employer offers this facility) are as follows:
- Inform the insurer: The employee is required to inform the insurance company well in advance about corporate health insurance when changing jobs, ideally 30-45 days before the last working day.
- Select a health plan: One can select a health plan offered by the insurer depending on the terms and conditions, inclusions, exclusions, premiums and other factors.
- Submit documents: Along with the portability form, the employee must submit various other documents. These may include the policy documents of the existing policy, medical history, claim history, etc.
- Pay the first premium: Once the insurance application is processed, the employee can pay the first premium and subsequently, a new policy will be issued.
As mentioned above, the insurer holds the right to either accept or reject the health insurance policy migration.
Buying a New Insurance Policy
If an employee was solely dependent on employer-provided group insurance, it is time to look out for insurance apart from corporate health insurance, when changing jobs. Health insurance plans for a complete family can be an effective risk-mitigation tool during medical emergencies and can also ensure coverage not only for the policyholder but also for his dependents. These policies can now be customized and riders can be added based on the needs of the individual. Add-ons usually come for an additional cost and thus, it is important to calculate the premium amount wisely to determine the final value.
Amit, working in an MNC decided to switch his job. Since he was aware of the portability norms, he enquired with his current employer about the same. The organization was flexible with the portability option. The insurance company with which Amit and his current employer had group health insurance, also shared the migration process and finalized the terms and conditions and premium amount before portability. In this way, Amit could easily port his corporate health insurance when changing jobs without much hassle.
Exercising the portability option of corporate health insurance when changing jobs depends mainly on the insurance company if it allows for such a facility. However, the second alternative of buying a fresh policy is a guaranteed way to ensure adequate medical coverage for the whole family.
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