Decoding Insurance

7 Factors to Consider When Buying Group Health Insurance

7 Factors to Consider When Buying Group Health Insurance

In an organization, employees hope for numerous benefits and perks. These help boost their morale and retain them longer. One of the important benefits offered by corporates to employees is group health insurance. Group health insurance is a collective health insurance policy that is used to cover employees of an organization. These plans protect your workforce and their dependents against illnesses, critical injuries and other medical conditions. The premium of the policy is mostly borne by the corporate. Having a group health insurance for your employees is not just a great retention tool but also important for their financial protection. Health emergencies can strike at any point in time and you certainly don’t want your employees to dent their hard-earned savings or having a harrowing time arranging for funds. Here are a few things to consider when buying group health insurance:

Check your employee needs: There isn’t a one size fits approach when buying a group health cover. Every organization has its own needs. A small startup might have employees who are in their 20s, unmarried and travel a lot. They would need a personal accident cover. While a mid- size company might have employees who are married and planning a family. They would need maternity benefits in health insurance. Then there can be employees in senior management who are aged. They would need a critical illness cover. Different customer segments have their own needs.

Sum insured: Sum insured is the amount of coverage given in a health insurance plan. It is the maximum amount that can be claimed in a year by the policyholder. When considering a group health insurance plan for your employees, you should go for a higher sum insured. This is because medical inflation is on the rise and more so, the cost of hospitalization is soaring on the back of the pandemic.

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List of network hospitals: When you buy a health insurance plan, the insurer will give you a list of network hospitals. It is a list of hospitals that have a tie up with the insurer for providing the insured the benefit of cashless hospitalization. One of the benefits of getting treatment from a network hospital is its immediate relief. One doesn’t have to make arrangements for arranging funds for paying the hospital bill at the last moment. The vitality of network hospital stems from the fact that it takes away the additional financial pressure in any unfortunate event, thereby lifting the burden off the shoulder. Especially, if someone is suffering from Covid-19, time and efforts should be utilized for recover of the patient rather than arranging funds.  Therefore, the employer should check the list of network hospitals being provided in a group health insurance plan.

Claim settlement ratio: Claim settlement ratio is the amount of claims settled by the insurer out of the total number of claims received. If the ratio is above 90, then it is considered to be a good claim settlement ratio. The claim settlement process of the insurance company should also be fast, so that your employees have a hassle-free experience.

Room rent limit: Room rent limit means coverage for room rent is restricted to a certain limit as per the terms and conditions of the insurer. A lot of policies have a room rent limit wherein customers are eligible for only 1% of the sum insured for room rent. For example, your employee has a cover of Rs 5 lacs. Typically, the room rent of a hospital in metro is Rs 10,000 per day. Your employee gets hospitalized for three days and has a total hospital bill of Rs 2 lacs. Out of this total bill, Rs 30,000 is the room rent amount. Your employee will have to shell out Rs 25,000 from his/her own pocket to pay the room rent because the limit is Rs 5,000. Therefore, go for a group health cover that offers highest room rent limit.

Co-payments and sub-limits: When choosing a group cover, look for clauses such as co-payments and sub-limits. Co-payment means sharing medical expenses with the insurer. They are applicable for specified ailments, specified hospital charges, and hospital treatment. For example, if the policy has a 10% co-payment clause, the employee will have to pay 10% of the hospital bill and 90% will be paid by the insurer. At the time of a health emergency, you certainly would not want your employee to have a harrowing time arranging funds.

Sub-limits are certain caps placed by health insurance companies in the form of a limit that is pre-determined, on the claim amount for a specific disease and/or treatment procedure. For example, if there is a sub-limit of 40% on a treatment procedure, and the procedure costs Rs 1 lacs, you cannot claim more than Rs 40,000 for that treatment due to the sub-limit clause.

Wellness Benefits: During the current times of Covid, mental health and well-being has gained prominence owing to social distancing. Employers should look for group health covers that provide wellness and preventive features. These days, many insurers offer benefits through wellness programs wherein they offer reward points to policyholders for staying fit and healthy. They keep track of employee’s wellness such as their step count, sleep patterns through wearables and smartphone applications. Insurers offer lucrative discounts on the renewal amount as rewards to the policyholders.

Dr. Bhabhatosh Mishra, Director (Underwriting, Products and Claims) at Max Bupa Health Insurance told PB Life that while there has been increasing uptake of wellness as a part of corporate health insurance plans, unfortunately, very few corporates in India include wellness and prevention as a strategic measure.

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Going forward, we believe, such comprehensive strategic programs will see higher uptake as these deliver better health and thus reduce absenteeism and improve productivity.

Mishra also said that these apart, we also notice a trend toward uptake of more components of inclusive design and innovation like covering specific treatments like surrogacy, infertility treatment, gender realignment surgeries, etc.

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