Group health insurance plans are a type of medical insurance package that covers a group of people, or employees working in an organization, 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 calculates on the basis of the headcount working in an organization, the nature of the job, and their area of operation. Although, the premium paid by the employer is tax-deductible for the employer, nowadays. The companies deduct a certain percentage of this premium from the employees’ salaries.
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.
Case of Group Health Insurance
The company Sheetal Ltd. had around 250 members and opted for group health insurance for all its employees. The company has adopted a uniform health cover throughout the organization. However, the amount of cover kept for each employee at Rs. 400,000. So, based on average age and the nature of the risk all the employees may expose 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 organization. Therefore, covers maternity expenses for the employees and their spouses if covered. Also, the insurer 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 brought Sheetal Ltd. reputation among competitors and helps the firm retain and attract talent much easily.