Old age comes with its own share of joys and challenges. They are the golden years of life when people have time to relax and enjoy the rest of their life in peace. However, it brings various health problems with it, and this can make this golden period expensive. With increasing life expectancy and the rising cost of medical expenditures, all of us know that it is essential to buy a health insurance cover for parents as well. It ensures that the best of medical care and attention is provided to them without any huge financial burden.
Most employers nowadays are providing group mediclaim insurance cover to all their employees to make sure that they have sufficient health cover to get the best medical facilities in case of any medical issue. This safeguards employees from any financial burden due to a medical emergency. This coverage provides cashless hospitalization benefits to the employee where they do not need to pay anything from their own pockets. These group mediclaim insurance coverages are also extended to the family members of the employees including their parents.
Should you consider covering an employee’s parents under group mediclaim insurance?
It is not a wise decision to cover the employee’s parents in the same group cover due to following reasons:
- Inadequate Cover for Other Members: Since old age comes with frequent illness, there are high chances of multiple claims for the parents in a year. Considering the medical cost inflation to be 12% to 18% per annum and the small amount of sum assured under group mediclaim insurance, the multiple claims made for parent’s health expenses may consume the whole of sum assured or leave little sum assured for the other members of the family;
- Frequent Claims: There will be more frequent claims on your group mediclaim policy if the parents of the employees are also covered under the same insurance policy. This can reduce the overall cover under the group health plan if you do not pay higher premium next time when you renew the group mediclaim insurance cover;
- Higher Premium: The premium of the group health cover is dependent mainly on the average age of the group that is needed to be covered by the policy. So, if more elderly people are covered under the group health insurance, then it is more likely that you need to pay a higher renewal premium amount to buy a group mediclaim insurance for the employees and their family.
As an employer, it is your responsibility to think about the welfare of your employees so that they do not land in any financial trouble. Insuring parents under the same group health insurance cover will offer no benefits to the employees. Instead, it will leave them with an inadequate cover which is a huge financial risk if they get exposed to any medical emergency themselves.
So, instead of offering to cover parents under the employees’ health insurance cover, you can:
- Offer medical expenses reimbursements: Reimbursing the medical expenses incurred by the employee for himself and his family up to certain extent is a great incentive for the employees. Medical reimbursements are also available for the health care expenses on the parents as well. But, the employee needs to submit the bills for the costs incurred to claim the reimbursements.
Another benefit of offering medical reimbursements to the employees that they can claim tax exemption on medical reimbursement up to the amount of Rs. 15,000 p.a.
- Encourage your employees to buy a senior citizen health insurance for their parents: If your employee’s parents have crossed 60 years of age, the senior citizen health insurance policy is the best option for covering their health risks. These policies have been specially designed to cater the health needs of the elderly. It provides comprehensive coverage for the hospitals and medical expenses that are incurred due to sickness, illness, and accidental injury. The other benefit of buying senior citizen policies for the parent is that it has a lesser waiting period for pre-existing ailments in comparison to regular policies.
Also, the employees will get additional tax deduction under section 80D for the premium paid for this policy.