Who Is Eligible for Group Health Insurance?
A group or corporate health insurance plan can be purchased by an organization for its employees or by a group of people with the same interest. From the perspective of employer-employee, a group health insurance plan is one of the key benefits that a company can offer to its employees. In some cases, the companies provide cover for the family members of their employees as well.
As an owner of a small business, you may wonder whether your company and you are eligible for group health insurance cover or not? According to the Insurance Regulatory and Development Authority of India (IRDAI), a business needs at least 20 employees to b eligible for a group health insurance plan. However, there is a provision of issuance of microinsurance plans to groups that have at least five members. Another important clause mentioned by IRDAI in its draft for companies with less than 20 members, the Group Health Insurance plan can still be provided if the family members of the employees are added. In addition to this, different insurance providers may have different limits over the minimum size of the group of insured people.
So, if you want to purchase a group health insurance plan for your company then there are some more guidelines that you must follow:
- Most of the group health insurance plans are for employer-employee, however, it can also be purchased by some specific groups who have some common interest. So, by this, you can purchase a group health insurance policy even when you are related to a group that is non-employer-employee such as credit card holders, employee welfare associations, bank borrowers, etc. In addition to this, societies or professional associations can also be considered as a group, provided the secretary, president, or manager in his/her capacity as an organizer enjoys the authority from most of the groups for purchasing insurance on their behalf. For example, banks purchasing group insurance for their depositors. When we talk about a group of employers – employees, the group insurance plan can either be non-contributory or contributory without any limits on the employer's contribution.
- The criteria for having a minimum number of employees vary from one insurance provider to another.
- Your group must not be formed to avail insurance as the premium rate of a group health insurance is cheaper than an individual insurance policy. However, if you do so, then the insurance provider has the right to refuse a group health insurance policy. There has to be a clear relationship between the group manager and members for the service that should not be related only to purchase an insurance policy. A homogenous group of people can think of purchasing an insurance policy for enjoying a lower cost of premiums, a person who is negotiating the rates of group insurance and then searching for the members to purchase a group health insurance policy is not allowed to buy it.
- An individual can get enrolled in a group health insurance policy either through a definite date such as the first of the following month, or next anniversary, or identifiable events such as loan sanction date, employment commencement, travel date, etc. However, a group health insurance plan can cease to exist, if even a single member leaves that group. It excepts the situations wherein it is explicitly mentioned that the person will get a group health insurance cover even when he/she leaves the group such as after retirement.
Let us discuss some cases to understand the aforementioned points:
- Case 1: ABC Engineering Company is a leading organization that has approximately 500 employees. The company has undertaken many challenges and several good projects across various Indian firms and is known for its quality of services and reliability. It has can purchase a group health insurance plan for its employees. The company can as well get all its new employees covered in a plan. In case an employee leaves the organization, then the company has to inform its insurance provider immediately so that his/her cover can be canceled immediately. The company can as well extend the cover of its group insurance plan for its retired employees. For that, they can notify the insurance provider in writing. For this, the insurance provider can charge some extra premium as well.
- Case 2:X, an interior designer of Delhi, travels abroad for his business as he has many clients out of India as well. Here, he can only purchase an individual travel insurance policy for covering his overseas travel. However, if he approaches a group insurance provider and collects people who frequently travel abroad, then the insurance provider can refuse to issue the group health cover.
- Case 3: XYZ Bank can purchase a group health insurance policy for all its credit cardholders. This policy can ensure that in case of some health issues, the credit card holders of XYZ Bank get benefits. For purchasing this plan, the bank has to make sure that it has the minimum number of members required by the insurer.
Benefits of A Group Health Insurance Policy
Being an employer, you get the following benefits with a group health insurance policy:
- Provides a better work environment for your employees as they feel secure with a health insurance policy.
- As per some surveys, a health insurance plan improves the retention rate of employees.
- Tax benefits for the premiums that you have paid against the group health insurance plan.
The Final Words!
Group health insurance policies offer health insurance to the employees by its employers or a group of people with the same interest. Some group health insurance plans as well as provide coverage to the families of employees like a spouse, dependent children, and sometimes dependent parents. Under a group health insurance policy, the conditions and terms and the exclusions remain the same for everyone, however, they may differ with the insurance provider. An employee does not need to undergo any pre-medical checkup, and he/she is insured immediately after joining the organization. Some policies as well provide maternity coverage.