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Disclaimer: The above plans and premiums are for 1 Lakh sum per life per month covering Health and Wellness needs of 7 Employees, 5 Spouse & 2 Kids below 35 years of age. The premium is inclusive of GST and do not cover PEDs & Maternity. Standard T&C Apply PolicyBazaar does not rate, endorse or recommend any particular insurer or insurance product offered by the insurer.
What is Subrogation?
Meaning of Subrogation in Group Health Insurance refers to a legal right. The right allows an insurance company to recover the amount paid to the insured for a claim from a third party that may be responsible for the loss.
In the context of group health insurance policy, subrogation refers to the right of the insurance company to recover the amount from a third party that is responsible for the injury or illness.
The third party may be an individual or an entity that is liable for the injury or illness. It may include a negligent driver in a car accident or a manufacturer of a defective product.
Importance of Subrogation in Group Health Insurance Policy
Subrogation is an important aspect of group insurance. It allows the insurance company to seek the amount which is paid to the insured for medical expenses. The amount is payable by the third party who inflicted harm to the insured.
This helps the insurance company to recover the cost of the claim. In addition, it also helps to keep the premiums low for the policyholders.
How Subrogation Works?
Let us understand how subrogation works in the context of meaning of subrogation in group health insurance.
When an insured person files a medical claim, the insurance company is to pay the claim. It later seeks reimbursement from the responsible third party. The insurance company may conduct an investigation to determine if there is a responsible third party and the amount of damages that may be recovered.
If the insurance company is successful in recovering the amount paid to the insured, it may reimburse the insured for any out-of-pocket expenses incurred. This inlcudes deductibles or co-payments.
Meaning of Subrogation in Group Health Insurance: Clauses
Subrogation clauses are included in group health policies to give the insurance company the right to seek reimbursement from a responsible third party. The subrogation clause may require the insured to cooperate with the insurance company in any legal action taken against the responsible third party.
The insured may also be required to sign a subrogation agreement. It gives the insurance company the right to pursue any legal action against the responsible third party.
Meaning of Subrogation in Group Health Insurance: Limitations
There are some limitations on the right of the insurance company to seek reimbursement from a third party in group health policy. These limitations may vary by state and may depend on the terms of the insurance policy.
Some states may have laws that limit the right of the insurance company to seek reimbursement from a responsible third party. At the same time, others may allow subrogation but with certain restrictions.
Subrogation in Coordination of Benefits
Coordination of benefits is a process that is used by insurance companies to determine which policy is responsible for paying a claim. When an insured person is covered under a group health policy and another insurance policy, such as a spouse’s policy, subrogation may come into play.
The insurance companies may coordinate benefits and determine which policy is primary and secondary. The primary policy may pay the claim and then seek reimbursement from the secondary policy or the responsible third party.
Conclusion
Meaning of Subrogation in Group Health Insurance is an important aspect of group health policy. It allows the insurance company to recover the amount paid to the insured for medical expenses from a third party that may be responsible for the injury or illness. Subrogation clauses are included in group health insurance policies to give the insurance company the right to seek reimbursement from a responsible third party.
Written By: PolicyBazaar - Updated: 24 May 2023
