Medical Reimbursement Vs. Mediclaim Insurance Which One Should You Offer To Your Employees?

A salary is a combination of basic pay along with various allowance like travel, medical, house rent, leave, etc. In India, healthcare benefits are considered as an essential part of the benefits package i.e. offered to the employees. As per a benefits survey conducted by Tower Watson, 46% of employers in Asia believe that their employees give the greatest importance to the health benefit in their package. So, we can say health benefits are quite a good motivation for the employees.

Health Benefits in India

In India, medical reimbursements and mediclaim insurance are two of the most popular health benefits provided by the employers.

In the case of medical reimbursements, the employer reimburses the medical expenses of the employee and his/her dependents. This is generally limited to the amount defined by the Tax Laws. Whereas mediclaim insurance is basically a group health insurance cover purchased by the company that includes all the medical expenses of its employees and his family.

Medical Reimbursements

Many firms offer medical reimbursements to its employees and reimburse the medical bills paid by the employees up to a certain limit.

But, in the case of medical reimbursements, an employer does not provide a huge coverage to the employees who are in most cases limited to Rs. 15,000 p.a. Only since anything beyond that is taxable in the hand of the employees. So, it does not provide any great benefit to the employees.

Also, there is a lot of administrative costs involved in collecting the bills from the employees as well as to check the authenticity of the bills before reimbursing the amount of the bill. Even, the employee needs to pay the bill initially from their own pocket and then submit it for settlement. In the case of emergency, it can be an enormous financial burden on the employee in case if he does not have sufficient sum to pay the bills.

Also, it is a huge financial burden for you as well as you do not have any idea about the total bills that are going to be submitted to you for reimbursement.

Group Health or Mediclaim Insurance

Provides coverage for employees and following benefits to the organisation and its staff:

  • Tax Benefits: Any amount paid by you in respect of premium of a mediclaim policy of any employee, is eligible for deduction as an expense. So, you can save tax as well, by buying a group insurance for all your employees.
  • Wider Coverage: With the mediclaim insurance, you can offer a huge amount of coverage to your employees by paying a fixed amount of premium. Also, in the case of group mediclaim insurance, you can avail great discounts on premiums. Also, the mediclaim insurance offered by employer provides coverage for parents, spouses, and children under the same policy.

Also, this mediclaim policy does not have pre-existing disease clause and waiting period clause. So, they start providing coverage for all the diseases pre-existing or not as soon as you purchase them. The maternity benefits are also provided under this cover.

  • Cashless Treatments: The mediclaim insurance offered by the employer to the employee offers cashless treatments at all the in-network hospitals wherein the employee does not need to spend any money on treatments from his own pocket, the insurance company directly take care of bills with the hospitals.
  • Greater Peace Of Mind: Mediclaim insurance offers greater peace of mind for the employees as there is no sudden financial liability even in the case of medical emergency. All the medical bills are taken care by the insurance company.
  • Less Administrative Cost: Once you purchase a health insurance cover for the employee, you can share all the policy details with the employees. After that, your job is done, and employee can directly contact the insurance company for settlement of claims.
  • Additional Riders: The employees can add additional riders like critical illness, OPD, diagnostics, to their existing mediclaim policy by paying a little extra charge. This helps them in having a more comprehensive cover.
  • Other Services: Some of the insurance companies offering mediclaim insurance also offers additional services like regular health check-ups, onsite health screening, that are great incentives for the employees.

Employees are the important assets of any business. So, you need to make sure that best health coverage is provided to them to retain them and keep them motivated. Such a plan should be chosen that provides sufficient coverages at affordable premiums as well as have easy claim process for the employees.

SecureNow can help you choose the best plan for your workforce, by providing you with details of multiple group health plans. SecureNow also provides 24×7 customer service for all your queries and that of your staff.

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