A group mediclaim insurance policy covers a group of individuals under a single plan. The insurance provider issues a master policy that contains the name of all the insured members and the sum insured. Individual health insurance plans can be taken for a consecutive period of two to three years and are renewable lifelong. However, a group health insurance plan is available only on an annual basis. Once the year ends, the organization has to renew the policy to continue coverage; it is not mandatory for an insurer to renew the insurance.
Key Takeaways
The Annual Reset: Group health insurance is an annual contract. Renewal is not automatic or mandatory for the insurer, meaning terms and premiums can change every year.
Census Accuracy: Renewal is the primary time to ensure the member list is 100% accurate. Adding new employees and deleting former ones ensures you aren’t paying for unutilised coverage.
Strategic Upgrades: If you want to increase the sum insured (e.g., from 3 lakh to 5 lakh) or add maternity and OPD riders, renewal is the only window where these structural changes can be made.
Claim-Linked Premiums: Low claim years often lead to “Good Experience Discounts,” while high claim years may result in a premium hike. This makes workplace wellness initiatives financially beneficial at renewal time.
Continuity is Critical: Payment must reach the insurer before the policy expiry date. If a policy lapses, employees lose coverage immediately, and any waiting period credits for pre-existing diseases might be lost.
Renewal tasks for the employer
As an employer, when renewing a group medical insurance policy, you would have to do the following.
- Request renewal: You would have to request the insurance company to renew the policy to ensure continuous coverage for your members.
- Inform insurer of addition/deletion of members: If the company has hired new people, you have to include them in the coverage. Similarly, if any existing member is no longer a part of the company, you should terminate their coverage. You would, therefore, have to inform the insurance company about the entry or exit of members.
- Increase sum insured if required: Renewal is a good time to make a request to the insurance company to increase the sum insured. During the pandemic, many companies have tried to increase the sum assured of an existing insurance. However, these increases can be done only on renewal.
- Insert add-ons: Riders are available with group mediclaim policies. If you want to opt for available riders, you should inform the insurance company accordingly.
Considerations for the insurer
Once the organisation provides the insurance company this information, the insurer makes the required changes in the existing plan. The insurance company also checks the following:
- Total claims made: If the claims made during the past year are low, the insurer will usually offer a discount on renewal premiums.
- Feasibility of higher sum insured: The insurer will check to see if an increase in sum insured is possible, based on its underwriting principles.
- Change in premium: Chosen riders and an enhanced sum insured (if any) might necessitate an increase in premium.
- Change in members: The insurer will check the new list of members and their ages, which could again affect the premium.
Thereafter, the premium is calculated considering the members covered, their age, the sum insured, riders selected, and discounts, if any. The insurance company would then offer the revised group mediclaim policy to the organization.
Summary Table: Group Health Insurance Renewal Process
| Step / Aspect | Action Required |
| Request Initiation | Employer must formally request renewal before the current policy lapses. |
| Workforce Update | Provide a fresh list of members, including new hires and removing exits. |
| Coverage Adjustments | Opportunity to increase the sum insured or add new riders (add-ons). |
| Claim Analysis | Insurer reviews the previous year’s “Claim Ratio” to decide pricing. |
| Pricing Factors | Premium is based on member ages, total headcount, and past claims. |
| Timing | Must be completed before expiry to avoid a “break” in coverage. |
If the company approves, it would have to pay the premiums, after which, the insurer will renew the policy. Do make sure that the renewal premium reaches the insurer before the previous insurance lapses. This ensures continuity of insurance cover without a break. A group health insurance plan provides group members with good coverage at affordable premiums. The group should, therefore, renew the policy in time for continuous coverage.
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Frequently Asked Questions (FAQs)
1. Can I increase the sum insured for my employees in the middle of the policy year?
A) No. Most insurers only allow changes to the base sum insured at the time of renewal. During the year, you can only add or delete members based on the existing coverage terms.
2. What happens if the insurer refuses to renew our group policy?
A) While rare, an insurer can refuse renewal if the claim ratio is extremely high or if they decide to exit that specific insurance product. In such cases, the employer must “shop around” and find a new insurer before the current policy expires.
3. Is there a “grace period” for group insurance renewals?
A) Unlike individual policies, which often have a 30-day grace period, group policies are much stricter. It is vital to pay the premium before the expiry date to ensure there is no “break” in the insurance cover for your employees.
4. How does the age of new employees affect the renewal premium?
A) If your company has hired many senior-level employees or if the average age of the group has increased significantly, the insurer will likely increase the premium, as older members represent a higher medical risk.
5. Can we add new “riders” like maternity cover only at renewal?
A) Yes. Renewal is the ideal time to evaluate your benefits. If your workforce demographic has changed (e.g., more young families), you can negotiate to add maternity, dental, or vision riders as part of the new policy year.
About The Author
Mayank Sharma
MBA Finance
He is a professional who brings extensive knowledge and expertise to the field of group health insurance. He has dedicated 7years to helping individuals and businesses navigate the complexities of insurance. Having worked closely with numerous clients and insurance providers, he deeply understands the nuances of group health insurance policies. With a reputation for providing insightful and informative content, he leverages his industry experience to educate readers about the importance of group health insurance and its benefits. Through their articles, Mayank Sharma aims to empower individuals and businesses to make informed decisions about their healthcare coverage, ultimately promoting healthier and more secure communities.
