Yes, the insured employee can continue the health insurance cover even after retirement. Let’s have a look at a few important things which you should consider if you have resigned or retired from your job and want to continue with your previous employer health insurance cover.
Coverage during Notice Period –
It is a period from the time you officially submit your resignation till the time you are officially relieved from the services. Mandated by most of the companies, this tenure can go up from one month to three months.
If you don’t have health insurance during this tenure, it means medical expenses would entirely be borne by you. Check with your HR department whether they will cover you during the notice period or not.
Continuity of insurance policy –
When you resign from a company, it is up to the company to decide whether they want to allow a corporate health insurance policy transfer to you as an individual policy or not.
Nowadays, many companies are letting their employees continue their group health insurance policies even after retirement or when they quit the job. Though the premium would now be much higher as it gets converted to an individual policy and is no longer a group cover, you can customise the policy as per your requirements.
If you are retiring, continuing with the group health insurance cover comes with its own benefits. Getting a fresh mediclaim policy after retirement may be a costly affair.
Also, most health insurance companies offer limited coverage to senior citizens. Higher the age, greater will be the risk of pre-existing and lifestyle ailments, thus, making it daunting and expensive to get an individual health insurance cover.
In fact, some organisations offer separate health insurance policies to their retired employees.
Insurance Portability Process
You have the option to port the health insurance policy given by your employer to an individual health cover. The portability feature gives freedom to the policyholder to switch from one insurer to the other without losing benefits earned in the previous insurance policies. However, you can convert your group health insurance into individual policy only with the same insurer. After staying for one year with the same insurer, you can switch to a new health insurance company.
You have a window of 45 days before the next renewal date of your policy to initiate the porting process. In case, you don’t meet the deadline, the insurer has the rights to refuse the portability.
Similarly, if your group health insurance policy also covers your family members, they can migrate from a group policy to an individual policy or a family floater with the same insurer.
Unlike an individual health insurance policy, group health insurance plans are more relaxed and usually have no waiting period. It means all ailments are covered from Day 1. However, in individual health insurance policies, there is a waiting period for various ailments.
When moving from corporate health insurance into individual policy, it is the number of years of continuous coverage from your corporate policy which is portable.
For instance, you have been covered under a group health insurance policy for two continuous years and then decide to port your policy to an individual health cover having a waiting period of four years for pre-existing ailments.
In this case, you would have to serve only two years of waiting period in the individual policy as you have already served the remaining waiting period.
What to look out for?
The acceptance of a proposal of new health insurance policy is subject to the underwriting process and guidelines of the insurance company.
When you port from a group cover to the individual policy, the insurer may underwrite you as a new customer and there is a high probability that those diseases which are contracted during the policy term will be termed as pre-existing ailments.
If this happens, you will have to serve the entire waiting period of the individual policy. However, this clause may vary from one insurer to the other.
After working for four years in M.J.S Engineering as a mechanical engineer, Rajiv decides to join a new company as a senior mechanical engineer. As his last company, M.J.S Engineering is offering corporate health insurance with good features, he decides to convert the same group insurance policy into an individual policy.
As his new company is not offering him any health insurance, Rajiv decides to go ahead with its old group insurance policy by converting it into an individual health insurance policy.
He approaches his last company’s group insurer who readily agrees to convert the group policy into an individual health insurance plan.
As Rajiv was covered in a group health insurance policy for four continuous years, the insurer also waives off the waiting period of pre-existing ailments in an individual cover.