A group health insurance policy provides standard cover to employees of a firm or members associated with a group. The employer can bear the premium cost (in the case of employer-employee relation) or the group members jointly can do so. Top-up covers are available to an employee, which then makes it a contributory plan. This means that employees have an added option to extend insurance cover, by contributing to the premium cost.
There are many advantages of group health policies over an individual policy, or personal benefits that accrue to an employee. These benefits are mentioned below in detail.
Benefits of Group Health Insurance Over Individual Health Cover
- Any individual, or an employee, is provided insurance under the standard group risk cover. Even if an employee has a pre-existing critical illness or congenital defect, he/she is eligible to join the plan by default.
- It is a hassle-free administration for the employee. There is no medical check-up required, making it a conveniently workable solution for the employees.
- Associated expenses with a critical illness are also covered.
- There is no waiting period in group health insurance. As soon as the policy is in effect, an employee is entitled to complete benefits of insurance compensation from that time.
- Even if the employee decides to buy supplemental coverage, the premium cost is more affordable.
- The premium paid for the group health plan by the employer is not taxable as salary for the employees.
- Emergency ambulance service, pre and post hospitalization expenses are also included.
- The insured has an option to provide insurance cover to spouse, parents, or any dependent including children and siblings.
- There is no maximum age limit to be part of a group health insurance policy.
Case on Benefits of Group Health Insurance
Started in 2010, Shri Ram Motors Pvt. Ltd. has carved a niche for itself in the automobile sector. With its offices already open in Delhi and Pune, last year the company opened a new office in Mumbai for which it recruited for several jobs. After a series of interviews, Mr. Rajesh Singh landed a job as a junior manager, and Mr. Ajit Tripathi became the new Area Manager.
In addition to the salary and other perquisites like reimbursement of mobile bills and transportation expenses, the company also offered a group health insurance to its new employees. Effective from the day 1, the policy offered the option to cover one family member as well. While Rajesh opted to cover his senior citizen father, Ajit got his wife covered under the policy. Without any medical test, the group health insurance policy covered both Ajit and Rajesh along with their wife and father, respectively.
When this year, Rajesh’s father was hospitalised after the latter suffered a cardiac arrest, Shri Ram Motors Pvt. Ltd.’s policy bore his medical expenses.
Rajesh had also bought an individual policy for himself, to increase his tax deduction. However, he had been cautious enough to check for the conditions and benefits before finalising.
He uses his employer’s policy mostly for his father, while he has additional cover available for himself under his own health policy. Additionally, the sum assured under his employer’s policy adds to the sum insured available under his individual policy providing him a larger umbrella for health risks.
While comparing the list of cashless hospitals for both policies, he discovered that jointly they cover more than 10,000 health care centres across the country, which is an added advantage in case of emergency.