Group Health Insurance

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Group health insurance is a type of medical insurance package that covers group of people, or employees working in an organisation, or of a society or of a registered residential apartment. The plan covers medical benefits for the employees (insured), their spouse, their children and the dependent parents (if mentioned).

The consolidated premium is calculated on the basis of the headcount working in organisation, their nature of job and their area of operation. Although, the premium paid by the employer is tax deductible for the employer, nowadays, companies deduct a certain percentage of this premium from the employees’ salary.

If we have to compare the group health insurance against the individual plans, then the group health insurance plans are usually cheaper than the individual plans because the risk to the issuer is spread out to the entire group, making it affordable for both the parties i.e. the employer and the employees.

See – Advantages of a Group Health Insurance

Case of Group Health Insurance

The company Sheetal Ltd. had strength of around 250 members and has opted for a group health insurance for all its employees. The company has adopted for a uniform health cover throughout the organisation. The amount of cover for each employee has been kept at Rs. 400,000. Based on average age and the nature of the risk all the employees are exposed to the premium decided by the insurer is approximately Rs. 40,000 for the first year.

The Group policy applies equally to both men and women working in the organisation and covers maternity expenses for the employees and their spouses if covered. Also, the insurer has assigned a relationship manager who will be helping the company keep the employee records up to date and maintain that everyone is covered at all times while working for Sheetal Ltd.

The group health policy has brought Sheetal Ltd. a reputation among competitors and helps the firm retain and attract talent much easily.