Generally, group insurance plans are purchased by the organisation or employers for their employees and for the well-being of their family. Group health insurance plans are customised based on the needs of the group and its members. Group plans offer numerous advantages to both employer (group) and employees (members). Following are the advantages offered by the group plans.
Advantages for employers:
1. Happy employees with a healthy work environment: Happy and healthy employees are the productive resources of the company. Employee benefits offered in the form of group insurance plans make employees feel valued. This definitely creates a healthy environment at work which will also lead to a better employer-employee relationship. Benefits offered to employees result in great productivity required for the growth of the business.
2. Employee retention: For any organisation, employees are true assets. With the benefits offered through group insurance plans, employees feel appreciated. Group plans not just provide financial security to employees during contingencies but also helps the employer in retaining the valuable resources.
3. Customisation saves money: Group health insurance plans offer the benefit of customisation wherein the employer can choose the coverage and customise the policy based on its need and affordability. With this, the organisation will be in a position to provide insurance benefits to employees but at the same time save money by customising the plan as per need and affordability.
4. Tax incentives: Part of premiums paid by the employer towards group health insurance plans for employees’ offer the tax benefit as the amount paid by the employer is eligible for a tax deduction.
Advantages for employees:
1. Coverage without evidence of insurability: As employees are qualified for insurance under employer-sponsored insurance schemes, they get the automatic coverage without even having to produce evidence of insurability. The coverage offered to employees is valid as long as that employee is part of the company. Basic health insurance coverage is offered to all the employees through this plan.
2. Additional cover: Group health plans can also offer many additional riders at a nominal additional cost of the premium. Additional cover can enhance policy coverage.
3. Cost-sharing: At times, group health insurance premiums are paid on a cost-sharing basis between employer and employees. This reduces the cost and helps employees to get health protection at a reduced cost.
4. Coverage for pre-existing conditions: The major plus point of group health insurance plan is that it covers pre-existing health conditions i.e. injury or illness that you have before you are enrolled for the health insurance policy.
5. Lower cost: As group plans are issued based on pooled risk, a larger number of people in the group will result in considerably low cost. As the risk is spread across all the members of the group, each one will get the coverage at reasonable and low cost.
6. Hassle-free payment: When it comes to group health insurance plans, payment of premium is simple and easy without any delay as the cost is deducted automatically from the employee’s salary. Hence, an employee will get continuous coverage.
With various important benefits and perks, group health insurance plans contribute to the success of the business and employee welfare.