What is employer-employee insurance?
An employer buys an employer-employee insurance policy to insure the life of their employees. Additionally, it is an arrangement that suggests that the employer has an insurable interest in their employees. Also, such an insurance policy encourages employees to stay with the employer.
Where is Group Health Insurance applicable?
This group insurance policy is applicable where there is a relationship between an employer and their employees. Such an employer-employee insurance policy has a minimum requirement of five employees. Therefore, the following types of companies can purchase these policies provided they have over five people:
- Sole proprietorships
- Partnership firms
- Corporate employees
- Legal entities
In such insurance schemes, the employer pays the premium. The employer fills one standard proposal form. This is then submitted to insurers with a list of employees. Additionally, this list also has details such as the date of birth and specific sum assured required.
Benefits for the employer in an employer-employee insurance
- This group insurance policy helps employers attract and keep employees.
- The employer-employee insurance scheme comes with tax rebates for employers on premiums paid.
- Employees can go to good hospitals and get back to work fast.
Benefits for the employees in an employer-employee insurance
- This group health insurance provides security to employees against illness, accident/disability, and premature death.
- Employees get health cover benefits without having to pay for the same.
- The quality of cover in the group insurance is significantly better than an individual insurance.
Case Study: Helping employers and employees
Illuminations Ltd. is a Mumbai-based IT firm that provides cloud-based services and other software solutions to clients. It was set-up in 2002 and now has 67 employees.
Most of Illuminations’ clients are based in Los Angeles and Seattle. In order to cater to their client demands, Illuminations has a solid base of talented people in different departments. So, to cement its relationship with employees, the firm took an employer-employee group insurance policy. Further, the company customized the insurance to meet the group’s needs. For example, parents of the young workforce were also insured. Overall, the employer-employee health insurance plan proved a cost-effective method to offer high-risk cover. The company allowed all employees to use a single AC room with no restrictions whatsoever. And employees appreciated this benefit. The policy also helped the company get tax benefits and reduce its attrition rate. A win-win for employers and employees.