Understanding the Importance of Group Health Insurance
A group health insurance is also known as corporate health insurance or employee health insurance. This type of plan covers a group of people who works together in an organization. The price of group insurance is comparatively less than an individual health insurance plan. As an employer, you can extend its coverage to the family members of the employees. A group health insurance offers benefits to employees as well as to employers. It provides financial assistance to employees, and employers can enjoy tax relaxation, making it beneficial for both.
There are many advantages associated with group health insurance offered by an employer to their employee. Here are some of the benefits an employer can get by offering a group health plan:
Increase Productivity of an Employee-
The productivity of an employee largely depends upon the factors like- the working culture, financial security, job security, health protection, etc.If they are financially getting covered under a group health plan that provides them protection against unexpected hospital expenses and emergencies. This makes themfeel valued and appreciated. Hence, you as an employer can reap the benefits of a productive workforce.
Cost Saving Option-
As compared to buying an individual policy for each employee, the premium for group insurance is more cost-effective and affordable. An insurance provider offers low premium rates because the overall risk taken by the company is allocated over all the group members. It helps to decrease the scale of insurers' liabilities, and hence, the benefit is given to the organization at comparatively lower premium rates.
In business, creating goodwill will help you in building long-term relationships with the customers. If businesses conduct any CSR (Corporate Social Responsibility) activity, it encourages brand loyalty by the valuable customers and therefore will increase the goodwill of a brand.
Similarly, if an organization offers group insurance for employees, it will reflect your goodwill towards your employees that will eventually reflect in their work. Not only does it create a sense of group loyalty towards the organization, but it is an added benefit for retaining employees.
Retention of Employees-
In a business environment, group insurance plays a crucial role in retaining your employees by offering them health protection. Group insurance leads to the well-being of employees, both physically and mentally. It is offered by employers who care about their employees.
Sets You in the Competition-
When an employee has to choose between two companies that have a similar working environment, salary perks, and incentives. Then, the goodwill that you have created by giving extra benefits to your employees can help set you in the competition and pull them in your favour. Maybe you can go the extra mile by extending the insurance coverage and including their family members. So, it will protect employees' spouses, children, and even parents in the same policy. Whatever you do for the betterment of employees will help you stand out in the competition, gain your customer and retain employees.
No Pre-requisites Required-
There is zero formality to fulfill while buying a group insurance plan. Pre-requisites include mandatory medical tests and heavy paperwork that is not required while registering in a group health insurance package. So, it saves your time and effort.
As a group of employees is covered under single group insurance plans, so it becomes easy to manage and maintain their data for the employer.
One of the most important benefits of group health insurance is tax incentives. The premiums paid by employers are tax-deductibles. An employer may qualify to get a credit back on their taxes as tax incentives and be compensated for the amount paid out toward insurance premiums.
Better Claim Settlement Process-
The claims settlement process is one of the main aspects of a health insurance policy. Under this, claims are settled by a dedicated team. Hence, the process is simple, smooth, has fewer restrictions, and has faster request processing.
Things to Keep in Mind Before Purchasing Group Health Insurance
Below are a few points to keep in mind for an employer before offering group health insurance-
- Planning the Budget-An employer needs to set a budget before buying a group health insurance policy for the organisation. According to the budget, an employer can control the spending, monitor the expenses, and utilize the money efficiently.
- Type of Plan-It is important to know what type of plan is required for the organization. As an employer, you must decide whether you want to extend the standard policy coverage for the family of the employee or not.
- Benefits of the Plan and Coverage-Before buying a plan, know the perks of a plan, inclusions & exclusions, coverage of the plan for the employees.
- Premium Amount Deduction from Employee's Salary-Many organisations as a part of the compensation to employees deduct the premium amount from the employee’s salary. Thus, an employer needs to decide whether the premium is borne by the company or want an employee to pay the premium amount.
A group health insurance plan is advantageous for both employers and employees. It reduces the financial stress of employees by offering them medical treatment costs and employers can enjoy the loyalty of the employees towards the organization.