For many young establishments, the costs associated with group health insurance might be daunting. So, if you want to provide your employees with the security of medical insurance without a considerable cost burden, you might want to consider a co-pay. This post attempts to help you better understand co-pay in group mediclaim insurance.
What does co-pay mean in the context of insurance?
Co-pay refers to a form of cost-sharing. Such cost-sharing between the insurer and the policyholder helps keep premiums low. As an employer, it is vital to examine co-pay terms for a group health insurance plan. This is because the co-pay will have a bearing on the employees enrolled in the plan. What it means is that employees will have to shoulder some part of the cost arising from medical treatments.
Options for co-pay in Group Health Insurance plans :
Co-pay in an insurance plan comes in three forms:
- Co-payment fixed fee
Some corporate health insurance plans come with a fixed fee for certain expenses like specific kinds of doctor’s visits, prescribed drugs, or other services. For instance, your policy may list a health insurance co-payment of Rs 500 for a doctor’s visit. So, from the total expense incurred on a doctor’s visit, your employees would have to pay Rs 500. The insurer will cover the rest.
- Co-insurance percentage
In this type of co-pay option, instead of a fixed co-payment fee, the insurance provider will specify a percentage of the total cost that you would have to bear. For instance, say your employee owes a doctor Rs 10,000. If your co-insurance percentage is 20%, your employee will need to pay Rs 2,000. The insurer will pay the remaining Rs 8,000. The insurer payment can be cashless or a reimbursement depending on how you file a claim. For cashless settlement, the hospital’s insurance desk will coordinate with the insurer for payment of their portion of the bill. You will need to pay your share directly.
- Annual deductible
An insurer may have a co-pay set up in the form of a yearly deductible that insured employees would have to pay for medical care they avail in a single year. For example, a Rs 5,000 annual deductible means that is the amount your employee has to pay. So, on a claim for medical expenses of Rs 75,000, the employee would have to pay Rs 5,000 before the insurer pays the remaining Rs 70,000.
Sometimes an insurer may club co-pay, co-insurance percentage, and deductibles in the same policy.
Co-pay in group health insurance: points to remember
- Standard co-pay ranges from 10% to 20%.
- Policies with co-pay usually have lower premiums since employees are bearing part of the healthcare cost, which will result in less utilisation of the sum assured.
- Several corporates use a co-pay for claims related to employees’ parents. This is because medical costs might be higher for elderly parents.
- Sometimes co-pay may also be applied to just a few specified critical illnesses.
Secure your employees the right way
At SecureNow, we simplify the process of purchasing group insurance. We bring together many insurers under one roof. We also help tailor an insurance policy to your company’s needs. So, to get the right group health insurance at the earliest call us.
Written By-
Mayank Sharma
MBA Finance
He is a professional who brings extensive knowledge and expertise to the field of group health insurance. He has dedicated 7years to helping individuals and businesses navigate the complexities of insurance. Having worked closely with numerous clients and insurance providers, he deeply understands the nuances of group health insurance policies. With a reputation for providing insightful and informative content, he leverages his industry experience to educate readers about the importance of group health insurance and its benefits. Through their articles, Mayank Sharma aims to empower individuals and businesses to make informed decisions about their healthcare coverage, ultimately promoting healthier and more secure communities.
