Corporate Health Insurance: Pros and Cons

Quick Overview

• Type of Coverage: Medical coverage for policyholders under a group insurance plan.
• Eligible Covered Members: Employees, spouse, children and in some cases, dependent parents.
• Typical Benefits: Hospitalisation, cashless treatment, day-care procedures.
• Optional/Enhanced Benefits: Maternity, OPD, wellness, dental and vision benefits.
• Other Considerations: Easier onboarding and waiting periods; coverage ceases upon termination of employment.
• Restrictions: Policy limits, exclusions, coverage of dependents and continuity of coverage must be reviewed by employees.

What is Corporate Health Insurance?

Corporate health insurance, also called group health insurance, is a type of health insurance policy that is bought by an employer for the benefit of their employees. This insurance covers hospitalisation expenses, surgeries, day-care procedures and other treatments that are considered eligible.

Depending on the policy wordings health insurance for corporations also covers the spouse, children and parents of the employee. Corporate health insurance has certain advantages over individual health insurance, such as an easy onboarding process, reduced waiting periods and lower premium amounts.

What Benefits are Offered under Corporate Health Insurance Plans to Employees?

The benefits covered under corporate health insurance depend on the employer, insurer and the terms of the policy. However, most such policies cover benefits related to hospitalisation and medical procedures, with other benefits being added as per the employer’s specifications. Such benefits can include:

• Hospitalisation coverage
• Cashless treatment
• Pre- and post-hospitalisation expenses
• Day-care procedures
• Emergency ambulance cover
• Coverage for pre-existing conditions
• Maternity and newborn care
• Dependent coverage
• OPD care
• Wellness and preventive health check-up coverage
• Mental health coverage
• Dental and vision coverage

What Are the Cons of Corporate Health Insurance Plans for Employees?

While corporate health insurance may seem like a good deal, it is often less customisable than an individual health insurance plan.

Limited Customisation

As the employer chooses the plan, or negotiates a plan with the insurer, the employee has limited say in the benefits plan’s customisation, such as the sum insured and add-ons.

Employer Determines Policy

The employer picks the insurer and policy, or negotiates its features, and the employees have little control over them.

Coverage Ends With Leaving the Organisation

Coverage typically ceases when the insured loses employment with the organisation, making corporate health insurance an unreliable choice for those living to leave.

Less Flexibility Than Buying an Individual Plan

An individual health insurance plan offers more flexibility to an individual in terms of customisation and the ability to keep the same plan over a long period with the same insurer.

Dependent Coverage Varies by Employer

Spouse, children or parents coverage, if available, depends on the employer’s plan and may have different terms, limits, and premium requirements.

Common Benefits of Corporate Health Insurance

The following table highlights common benefits of a corporate healthcare plan that an employee should look for:

For Indian corporate health insurance, hospitalisation, pre/post-hospitalisation and day-care treatment are the norms, whereas maternity, OPD, wellness, dental and vision are mostly the add-ons.

Benefits Worth Checking Carefully

The sum insured is not the only determining factor while assessing a corporate health insurance plan. A ₹10 lakh sum insured corporate health insurance might have certain specified terms and conditions on which a claim can be made. Before availing the policy, employees should cross-check the following:

• Sum insured (e.g. ₹5 lakh/ ₹10 lakh or any other amount)
• Room rent limit
• Co-payment and deductibles
• Disease-specific limits
• Maternity limits and waiting periods
• Parents coverage (if any) and at what cost
• OPD limit
• Network hospitals in the employee's city
• Consumables/ non-medical expenses coverage
• Coverage in case of termination

Types of Corporate Health Insurance Plans

Corporate health insurance plans can be segregated on the basis of size of the company, employee requirements and extent of coverage.

Contributory Plan

These are the corporate health insurance plans wherein employees pay a specific percentage of the premium while the employer contributes to the remaining percentage.

Non-Contributory Plan

Under the non-contributory corporate health insurance plan, the employer bears the entire amount of the premium while employees get coverage for the specified sum insured.

Family Floater Health Insurance

This type of corporate health insurance plan covers the spouse, children and parents of the insured person.

Top-Up Health Insurance

Top-up health insurance plans provide additional coverage over and above the sum insured of a base health insurance plan. It is usually taken to cover expenses beyond the sum insured.

Critical Illness Cover

Some corporate health insurance plans also provide critical illness cover, which covers the cost of treatment of life-threatening diseases like cancer, kidney failure, stroke or heart disease.

OPD and Wellness Benefits

Some corporate health insurance plans provide wellness and mental health benefits to support the overall well-being of the employees.

Maternity Coverage

A few group health insurance plans also provide maternity benefits like coverage of pregnancy and childbirth, newborn cover and post-hospitalisation expenses.

Cost of Corporate Health Insurance Policy

There are several key factors which affect the cost of a corporate health insurance policy, namely:

• The number of employees covered by a policy
• The average age of employees
• The sum insured
• Industry risk profile
• Add-on benefits
• The claim history
• Coverage for family members

There is a significant difference between large and small employee groups. In the former case, the rates are more competitive.

How Corporate Health Insurance Plans Differ from Regular Health Insurance Plans

Corporate health insurance plans are more affordable & accessible, whereas individual health insurance plans are more flexible and scalable.

At a Glance

• Corporate health insurance is bought by employers for their employees.
• Individual health insurance is bought by individuals for themselves.
• Corporate health insurance plans have short waiting periods and hassle-free entry processes.
• Individual health insurance plans provide flexibility and continuity.
• In case of corporate health insurance, your cover might end if you lose your job.

How Does Corporate Health Insurance Work?

Corporate health insurance works on the premise of an agreement between the employer and the insurance company. Here is how it usually works:

• The employer buys a group health insurance policy for employees.
• Employees get enrolled as part of the master policy.
• The insurance company offers a specific sum insured & coverage benefits.
• Employees can use cashless claims at network hospitals or reimbursement claims.
• Employees enjoy continuous coverage so long as they are employed with the company.
• Employers may also offer top-up coverage or dependent coverage.

Pros and Cons of Corporate Health Insurance at a Glance

Conclusion

Corporate health insurance has become an essential employee benefit for modern organisations. It allows employers to take care of their employees' financial health in case of any authorised medical expense. As far as employees are concerned, the main benefit is ease of access. Since they don't have to buy a health insurance plan on their own, it reduces the burden of purchasing a health insurance cover. However, when buying a corporate health insurance plan, it is essential to look beyond the sum insured and consider other factors like room rent limits, co-payment, disease-specific sub-limits, maternity benefits, dependent coverage and network hospitals.

While corporate health insurance may protect employees during their time at the company, its limitations in terms of customisation and continuity make it essential for employees to evaluate their need for additional individual health insurance plans.