Group Health Insurance Vs Family Floater Insurance

A Family Floater Plan (FFP) is an insurance policy that covers an individual along with his family members whereas group health insurance is a type of insurance policy that covers employees of an organization. This family floater insurance policy is cost effective than individual insurance plans for each family member. However in Group health plan, employer bears the premium.

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Group Health Insurance Vs Family Floater Insurance

Meaning

A group insurance scheme covers employees of a specific organisation. It even covers the dependence of family members of the employees. At the same time, family floater insurance covers the members of a family related to each other. For example, it could be immediate members or in-laws.

Premium Charges

Group health insurance vs. family floated insurance can be easily understood on the basis of the premium charges paid by the parties. In a group insurance , the premium charges of the employee are generally paid by the employer. However, the employer bears the basic plan. The employee can pay a certain additional premium to get more coverage.

Eligibility Criteria

As long as the individual is associated with the organization, he will be getting the benefits from the group insurance policy. However, when an employee declares his disassociation from the organisation, he will no longer be covered under the group insurance. Hence, at the time of occurrence of medical treatment, he will not get the group health insurance coverage.

Nevertheless, in family floater insurance, an individual is eligible to buy health insurance if he/she is above 18 years of age. As long as the individual pays the premium, he/she, along with the family, will be covered under family floater insurance.

Settlement Process for Claims

The TPA (Third Party Administrator) appointed by the insurer can settle the claim for the group health plan. In contrast, a claim for family floater insurance could be determined by an insurance company or TPA appointed by the insurer.

Tax Implications

The organisation usually bears the premium for the group mediclaim plan. Hence the tax benefits on the expenses incurred via premium are applied to the organisation. However, an employee may also get tax benefits if he/she has paid any additional premium over the group insurance scheme.

The insured party who pays the premium can avail of tax benefits under section 80D of the Income Tax Act.

Withdrawal from the Policy

The exit of an employee from the group health plan depends on his retirement, disassociation, and termination from the job.

Under family floater insurance, the policyholder can exit from the policy after reaching a certain age specified in terms of the policy. In addition, if the policyholder fails to pay the premium, the policy ceases to be active and does not cover the insured as per the terms included in the policy. However, death is also an exit criterion for the policyholder.

Case Study

Abbineni Sudha Rani v. Abbineni Ravi Kumar Verma

The complainant filed the complaint under section 12 of the Consumer Protection Act, 1986, against the insurance company offering the Happy Family Floater Policy. The complainant bought the policy in 2010 and has paid the premium since 2016. In the first year, the complainant paid INR 9,552. Later, upon the policy renewal, the insurer sent the renewal notice asking the insured to pay INR 24,921. In the last renewal, the complainant paid INR 48,235 and discovered the PNB Oriental Royal Medi Claim policy could be obtained by paying INR 6,960. Therefore, the PNB policy was cheaper than the Happy Family Floater Policy. Thus, the complainant sued the opposite party under consumer court.

After examining the fact of the present case, the court held the following:

Generally, an insurance company frames various policies by considering the risk factor, expenditure and percentage of claims. Hence, the company may suffer loss. However, due to the loss, the company cannot escape from the liability of settling the genuine claim. In the present case, the court observed that both insurance companies are different parties. Hence they may charge the premium price as per their assessment. It is the discretion of the policyholder to choose either one. Therefore, based on the above finding, the Happy Family Floater Policy cannot be held liable for charging excessive prices.