Group Health Insurance

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In a group health insurance plan, there are different heads under medical emergencies, for which a specific amount or limit is indicated. This is called capping. It is the maximum amount that the insured can avail for a specific head under a group health insurance plan.

If the expenses under one of the heads is more than the capping amount, then the insured has to  pay for the additional expense. The capping limits are specified in the policy document of the group health insurance policy.  Thus, if the medical expense is more than the capping, the insurer will only pay the amount which is stated or calculated as per the capping. The insured person will have to bear the additional expense above the capping amount.

Some of the examples of capped expenses in a group health insurance include:

  • Room rents
  • Ambulance charges
  • Daily cash
  • Maternity charges
  • Attendant allowance
  • Certain medical procedures

For the daily room rent, the capping usually is 1% of the sum assured. So, if the capping amount for the room rent is Rs. 5000, and the expense that the insured incurs for the room rent is Rs. 7000, then the additional 2000 rupees has to be paid by the insured. The insurance company will not be liable to pay the additional amount of Rs 2000 as per the room rent capping stated in the group health policy.

Similarly, the ICU charges may be capped at 2% of sum insured per day. If the expense is below or up to the maximum capped amount, the insurer will pay the full amount. Otherwise, the insured person will have to pay the additional expense.

Ambulance charges are also capped by group health insurance companies. The capping amount on the ambulance charges can vary and can be based on either ambulance charges per hospitalization or ambulance charges for a fixed number of visits.

Daily expenses provided to the person accompanying an insured child also may have capped charges and any additional daily charges incurred must be borne by the insured or the accompanying person.

As an insured, you may feel that since your sum assured is high; you will get the entire benefit in case of any medical related cost. But it is important to carefully read and understand the group mediclaim insurance policy to know what are the heads for which the capping is applied.

Additional Read: What is deductible under employee group insurance policy 

Case Study:

Shivani was an employee of a manufacturing firm and was working there for the past three years. She was insured under a group health insurance plan provided by her company.

In 2016, Shivani started feeling continuous itching in her left eye. Her vision was also becoming poor, and her eyes started watering on a daily basis.

She went to the Ophthalmologist to get her check-up done. Her report showed that she had developed a cataract in her left eye. She was advised to undergo cataract surgery. She underwent the surgery on the prescribed date. Her medical expenses for the cataract surgery were Rs. 35,000. She thought that she would get all her expenses covered under her group health insurance policy provided by the company for which she worked.

However, in the insurance policy, the capping amount for cataract related surgery was 25,000. But Shivani’s medical expenses were Rs. 35,000. So as per the group health insurance policy, the maximum benefit that Shivani would get for the cataract operation was Rs. 25,000. Hence Shivani, herself paid the additional amount of 10,000 as it was not covered by the policy.