Structuring a Group Insurance policy depends on the structure of the organization. Small organizations; i.e. those consisting of less than 50 employees, will have a very different set of hierarchy than that of a large organization comprised of 10,000 employees.
Depending on the homogeneity of the group members the organization may even have to purchase different policies for different workgroups in the organization.
A Case of Structure a Group Insurance Policy for Employees
Spectrum Inc., a large service sector company, has around 20,000 employees spread across multiple group businesses and various locations in India. They currently have a group health plan which is a single policy with the same benefit structures across different departments and geographies. Since the organization has multiple structures for various departments and teams, Spectrum Inc. now wants to structure the group insurance policy differently for all teams.
The primary objective of this action is to strike a balance between the costs and motivation levels among the groups. Consulting with an advisor the company decides upon a new structure of offering group insurance policy:
Technical Teams:
Since most of the employees in this department have similar job profiles duties and benefits, the company uses a flat structure within these teams where all the staff gets the same kind of cover of Rs. 5 lakhs.
Operational Teams:
The company has structured a hierarchy type of group plan for these teams. So, while the junior executives get only Rs. 1 lakh cover, the senior managers get Rs. 5 lakhs, with the top tier managers getting a health cover as high as Rs. 25 lakhs.
Creative Teams:
This team has a lot of part-time workers, and they are not included in the group health plan. Therefore, the rest of the team’s group health plan is structured in a uniform way where all the team members are getting a cover of Rs. 5 lakhs.
While the structuring process took a lot of time, deliberation, and consultation with good health care advisors, Spectrum Inc. Now, with the right kind of group plan structure is able to provide an appropriate health cover to employees. However, without increasing the expenses. The company is also able to attract better talent to the enterprise. They also managed to cut down costs by reducing the cover in smaller cities that don’t require very high cover.
About The Author
Himanshi
MBA Insurance Management
With over 8 years of dedicated experience in the insurance industry, Himanshi has established herself as a leading expert in group insurance. As a prolific writer for SecureNow, she produces informative and engaging blogs and articles that shed light on the intricacies of group insurance, helping businesses and individuals make informed decisions about their coverage options. Throughout their career, Himanshi has developed a deep understanding of various aspects of group insurance, including employee benefits, policy selection, and risk management. Their expertise allows them to translate complex insurance concepts into clear, actionable insights, making their content an essential resource for readers looking to navigate the world.
