A group mediclaim policy covers a group of individuals under a single policy. The individuals who are covered should be the members of the group. Common examples of groups that are eligible to buy a group mediclaim policy for their members include the following –
- Employer-employee groups
- Trade unions and their members
- Clubs and their members
- Banks and their account holders, etc.
All the members who join the group get automatically covered under an existing group mediclaim policy. Any new member who joins the group is added to the group coverage either mid-way during the term of the policy or when the policy is up for renewal.
The sum insured of the policy is determined by the health insurance company. The insurer underwrites the health risk of the members who are being covered and then arrives at the sum insured which can be allowed. Based on the sum insured and other factors, the premium rates are calculated for the group mediclaim policy.
Payment of the premium of a group health insurance policy can be done in three ways. These ways include the following –
- The premium can be paid by the group head. In this case, the members do not pay the premium and enjoy free coverage. For instance, in an employer-employee group mediclaim policy, the premium can be paid by the employer and the employees would enjoy group insurance coverage. Similarly, in the case of trade unions or clubs, the premium can be paid from the group’s expense account and the members would enjoy free coverage. If the bank is buying a group mediclaim policy for its account holders, it can pay the premium from its own pockets and the account holders would enjoy the free coverage.
- The premium can be paid by group members. In this case, every member of the group pays his/her own premium. The member contributes the premium to the group and the premium is pooled together. Thereafter, the group pays the premium in one lump sum to the insurance company. For instance, in employer-employee groups, the premiums can be deducted from the salary before the salary is credited to the employee. Similarly, in trade unions or clubs, members might pay their individual premiums. Banks usually deduct the respective premiums from the account of their customers and pay it to the insurance company.
- The premium can be shared by the group and its members in a pre-defined ratio. In this case, the group pays a part of the premium and the remaining part is paid by the member. Thus, the group and the member share in the premium amount. The group can fix the premium paying ratio as per its capacity. This method of premium payment is affordable both for the group as well as its members.
In any of these above-mentioned modes of premium payments, the group health insurance policy is not affected. The insurance company is not concerned how the premium is being paid. It collects the premium from the group and issues a master mediclaim policy covering the members. The mode of premium payment is, therefore, decided internally, among the group.