Group health insurance becoming more accessible, affordable

The health insurance industry has seen a major transformation over the last couple of decades. There has been an increased focus on modernization of services, personalisation of products, rationalisation of prices, and overall availability of more choice for the consumer.

The use of digital technologies has also made health insurance more accessible to people across the country. Yet, over 80 percent of Indians are not covered by health insurance, as revealed by the National Sample Survey’s 75th round of household consumption survey on health.
This huge gap in health insurance coverage has also been brought into focus by the COVID-19 pandemic that has affected millions of people across the country, with a large section of them being working-class individuals, earning a livelihood for their families.

This gap is even more profound when it comes to “the missing middle” -- the small businesses which make up more than a quarter of India’s GDP and over 40 percent of manufacturing output -- which has been hardest hit by the pandemic.

With such a health threat looming large, the questions of well-being and safety of employees, especially when it comes to those of small businesses and Micro, Small and Medium Enterprises (MSMEs), are of utmost importance.

An employer, taking care of such needs through group health insurance could be the answer to these questions. Not only can it ensure the welfare of the employees, but it can also go a long way to bridge the gap of health insurance coverage in the country. Moreover, according to the latest government guidelines, it has now become mandatory for employers to provide health insurance coverage to their employees when they resume operations post COVID-19 lockdowns.
A group health insurance is a kind of health insurance plan that provides health cover to a group of individuals who work for the same organisation. This is often offered as an incentive for employees as the premium for the same is usually borne by the employer.

In some cases, the benefits of group health insurance coverage can be extended to the family members of the employees as well. Some health insurance providers even offer the option of including the employees’ parents in the same group health insurance policy by paying a little extra premium. One of the best upsides of this is that the parents can be covered in the plan from day one, with no waiting period and no medical check-up even for pre-existing diseases. In addition, including parents in the group insurance policy is much cheaper than buying an individual plan for them.

Group health insurance is among the most affordable health insurance plans available in the market and accounts for over 50 percent of the non-government-sponsored health insurance market. While there have been many innovations when it comes to individual and family health insurance plans over the last decade or so, when it comes to group health insurance, there has not been much activity. This has been the case despite group insurance accounting for 50 percent of the health insurance premiums in the country. Group health insurance has been opaque and rigid, only useful in case of hospitalisation.

However, lately, insurers are trying to offer more flexibility and customisations when it comes to group health insurance as well. Now many group health insurance plans cover several non-hospitalisation expenses like diagnostics, online doctor consultation, nutrition, second opinion services, mental wellness, and yoga and personal training. Moreover, some group health insurance plans now also offer add-ons like COVID-19 protection, top-ups, term life cover along with health cover, and so on. For small businesses with only a few employees and that cannot afford to pay annual premiums, many insurers now provide the option for making monthly premium payments in group health insurance plans as well.

Companies varying from SMEs and MSMEs to large corporate houses, they all can now choose policies for their employees and customise them based on their size, location, spread, competition and their specific needs. After all, with new business models emerging and gig economy flourishing in several sectors, the old rules of game can no longer serve the needs of a diverse set of companies.

These radical innovations have been fuelled by new start-ups as well as the willingness of big insurers to embrace change. In addition, there has also been a change in the mindset of employers, especially when it comes to start-ups and new age companies, which heavily focus on employee satisfaction and welfare. Therefore, instead of group health insurance policies focusing on the needs of the employers, insurers are now designing their offering from the perspective of the employees.
A perfect example of this is that many insurance providers now enable claim servicing without any intervention or involvement of the HR or the administration of the company when it comes to their group insurance plans. This not only makes things easier for the company by freeing up their human resource but also brings a lot of comfort and convenience for the employee. This kind of direct claim servicing is usually achieved by deploying digital technologies in the form of mobile applications and websites with automated processes.

And with these innovations, that not only make group health insurance accessible but also affordable, it is estimated that a large majority of medium-sized companies will offer health insurance to their employees in the coming years to meet the latter’s higher expectations of health benefits from their employers.

The author, Raghuveer Malik, is Head- Corporate Insurance at Policybazaar.com. The views expressed are personal