{"id":4114,"date":"2017-03-24T09:51:21","date_gmt":"2017-03-24T09:51:21","guid":{"rendered":"https:\/\/securenow.in\/blog\/?p=4114"},"modified":"2026-03-18T09:21:25","modified_gmt":"2026-03-18T09:21:25","slug":"why-should-not-include-employees-parents-group-health-insurance-policy","status":"publish","type":"post","link":"https:\/\/securenow.in\/insuropedia\/why-should-not-include-employees-parents-group-health-insurance-policy\/","title":{"rendered":"Adding members\u2019 parents to group health plans \u2014 concerns and alternatives"},"content":{"rendered":"<div id=\"bsf_rt_marker\"><\/div><p>Increased life expectancy comes with rising medical expenses. Thus, many young people consider it prudent to buy health insurance cover for their parents. What this does is ensure the best medical care without a major financial burden. So, as an advantage, there is a provision for adding members&#8217; parents in group health insurance plans.<\/p>\n<p>Most employers provide group mediclaim insurance cover as an employee benefit. As a result, employees get the convenience of cashless hospitalization. This group mediclaim insurance <a href=\"https:\/\/securenow.in\/insuropedia\/why-do-i-need-a-group-health-insurance-policy\/\">coverage<\/a> is often extended to employees\u2019 family members too. Thus, aged parents do not have to undergo medical tests and can even be covered for pre-existing conditions. This can prove to be a great relief for employees as it alleviates their concerns of the medical expenses that could arise from age-related ailments. Since this is not a benefit that many employers offer, those that do, could attract more loyal and motivated employees.<\/p>\n<h2 data-path-to-node=\"5\">Key Takeaways<\/h2>\n<ul data-path-to-node=\"6\">\n<li>\n<p data-path-to-node=\"6,0,0\"><b data-path-to-node=\"6,0,0\" data-index-in-node=\"0\">Inclusivity over Underwriting:<\/b> The primary highlight of group plans is that they bypass the rigorous medical screenings usually required for senior citizens in individual plans.<\/p>\n<\/li>\n<li>\n<p data-path-to-node=\"6,1,0\"><b data-path-to-node=\"6,1,0\" data-index-in-node=\"0\">The &#8220;Floater&#8221; Dilemma:<\/b> In a combined family floater, a single major hospitalization of a parent can consume the entire sum insured, creating a &#8220;coverage gap&#8221; for the employee and their spouse.<\/p>\n<\/li>\n<li>\n<p data-path-to-node=\"6,2,0\"><b data-path-to-node=\"6,2,0\" data-index-in-node=\"0\">Cost vs. Welfare:<\/b> Employers must weigh the high cost of parental premiums against the increased loyalty and motivation that this specific benefit generates in the workforce.<\/p>\n<\/li>\n<li>\n<p data-path-to-node=\"6,3,0\"><b data-path-to-node=\"6,3,0\" data-index-in-node=\"0\">Co-Payment as a Lever:<\/b> Implementing a co-pay (where the employee pays a small percentage of the parent&#8217;s bill) helps keep premiums affordable and encourages judicious use of the policy.<\/p>\n<\/li>\n<li>\n<p data-path-to-node=\"6,4,0\"><b data-path-to-node=\"6,4,0\" data-index-in-node=\"0\">Tax Advantage for Employees:<\/b> If employees choose to supplement their group cover with an individual senior citizen policy for their parents, they can claim a separate tax deduction under Section 80D.<\/p>\n<\/li>\n<\/ul>\n<h2><strong>The cost of coverage for adding members\u2019 parents in group health insurance plan<\/strong><\/h2>\n<p>Providing insurance for parents is an excellent benefit that employers can give employees. This is because waiting periods in group insurance are much lesser than individual insurance. However, on the flip side, some employers are concerned about the costs of group medical insurance plans that provide coverage to aged parents. Sometimes, the high claims of parents can increase the premium for employees as well. So, the risk for companies is that it may not be sustainable for them to offer parents cover each year. The specific issues are:<\/p>\n<h3><strong>Frequent claims under group health policy<\/strong><\/h3>\n<p>As people age, they are likely to face problems that require medical care. Thus, providing coverage for the parents of employees might mean a greater frequency of claims. This can eventually result in higher overall costs in the group health plan.<\/p>\n<h3><strong>Inadequate cover for others\u00a0\u00a0<\/strong><\/h3>\n<p>Medical cost inflation is 12% to 18% per annum and the sum assured under <u>group mediclaim insurance<\/u> is not very large. What this means is that multiple claims may consume the whole or most of the sum assured. This will leave little for other members of the family.<\/p>\n<h3><strong>Higher premium<\/strong><\/h3>\n<p>The premium of a group medical insurance plan depends largely on the average age of the group that the policy covers. So, if the group health insurance covers more elderly people or if the insured make multiple claims during the year, the employer will have to pay a higher <a href=\"https:\/\/securenow.in\/insuropedia\/group-health-insurance-expiry-and-renewal\/\"><u>renewal premium<\/u><\/a>.<\/p>\n<h2><strong>Options for employers to cover parents in group health policy<\/strong><\/h2>\n<p>Employee welfare should be an important consideration for employers. However, associated costs can make employers think twice about including the elderly parents of their employees in a group mediclaim policy. In fact, insuring parents under the same group health insurance cover might leave employees with inadequate cover. This could be a huge financial risk in case of a medical emergency. In such situations, employers can consider some alternatives.<\/p>\n<h3><strong>Structure parents\u2019 insurance thoughtfully<\/strong><\/h3>\n<p>Employers could include a co-pay of 10\u201325% for parents. This brings costs down. Also, employers can consider buying two distinct insurance plans, one for the employee and their family and the other just for parents. This would mean that high claims in parents\u2019 insurance would not impact core employee insurance adversely. Finally, employers can lower their cost by covering a large number of parents. This allows economies of scale. The best option is to cover over 100 parents, if possible.<\/p>\n<h3>Summary Table: Parent Coverage in Group Health Insurance<\/h3>\n<table data-path-to-node=\"3\">\n<thead>\n<tr>\n<td><strong>Feature<\/strong><\/td>\n<td><strong>Details<\/strong><\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><span data-path-to-node=\"3,1,0,0\"><b data-path-to-node=\"3,1,0,0\" data-index-in-node=\"0\">Core Benefit<\/b><\/span><\/td>\n<td><span data-path-to-node=\"3,1,1,0\">Access to medical cover for elderly parents without mandatory medical tests.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span data-path-to-node=\"3,2,0,0\"><b data-path-to-node=\"3,2,0,0\" data-index-in-node=\"0\">Key Advantage<\/b><\/span><\/td>\n<td><span data-path-to-node=\"3,2,1,0\">Pre-existing diseases (PEDs) are typically covered with much shorter waiting periods.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span data-path-to-node=\"3,3,0,0\"><b data-path-to-node=\"3,3,0,0\" data-index-in-node=\"0\">Sustainability Risk<\/b><\/span><\/td>\n<td><span data-path-to-node=\"3,3,1,0\">High claim frequency by elderly members can lead to significant premium hikes.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span data-path-to-node=\"3,4,0,0\"><b data-path-to-node=\"3,4,0,0\" data-index-in-node=\"0\">Sum Insured Risk<\/b><\/span><\/td>\n<td><span data-path-to-node=\"3,4,1,0\">Parental claims can exhaust the family floater limit, leaving the employee\/children uncovered.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span data-path-to-node=\"3,5,0,0\"><b data-path-to-node=\"3,5,0,0\" data-index-in-node=\"0\">Cost Management<\/b><\/span><\/td>\n<td><span data-path-to-node=\"3,5,1,0\">Strategies include co-payment clauses (10\u201325%) or separate parental policy pools.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span data-path-to-node=\"3,6,0,0\"><b data-path-to-node=\"3,6,0,0\" data-index-in-node=\"0\">Long-term Option<\/b><\/span><\/td>\n<td><span data-path-to-node=\"3,6,1,0\">Senior citizen-specific policies offer lifelong renewability and tax benefits.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3><strong>Encourage employees to buy individual insurance for parents<\/strong><\/h3>\n<p>If employees\u2019 parents are aged 60 or above, a senior citizen health insurance policy is the best option to meet their medical needs. These policies cater specially to the health needs of the elderly. They provide comprehensive coverage for medical expenses incurred due to sickness, illness, and accidental injury. Another benefit of buying senior citizen policies for parents is that they are renewable life-long unlike group health insurances that are renewable yearly. Also, employees get an additional tax deduction under section 80D for the premium paid for this policy.<\/p>\n<h3 data-path-to-node=\"8\">Frequently Asked Questions (FAQs)<\/h3>\n<h4 data-path-to-node=\"9\"><b data-path-to-node=\"9\" data-index-in-node=\"0\">1. Why is it easier to cover parents under a group plan than an individual plan?<\/b><\/h4>\n<p data-path-to-node=\"9\"><strong>A)<\/strong> Individual plans for seniors often require strict medical tests and have long waiting periods (2\u20134 years) for pre-existing diseases. Group plans usually waive these tests and cover pre-existing conditions from Day 1 or after a much shorter period.<\/p>\n<h4 data-path-to-node=\"10\"><b data-path-to-node=\"10\" data-index-in-node=\"0\">2. What is a &#8220;Co-pay&#8221; clause in parental insurance?<\/b><\/h4>\n<p data-path-to-node=\"10\"><strong>A)<\/strong> A co-pay clause means that for every claim made for a parent, the employee must pay a fixed percentage (e.g., 20%) of the total bill, while the insurer pays the rest. This helps the employer reduce the overall premium cost of the policy.<\/p>\n<h4 data-path-to-node=\"11\"><b data-path-to-node=\"11\" data-index-in-node=\"0\">3. If my parent uses the entire sum insured, am I still covered?<\/b><\/h4>\n<p data-path-to-node=\"11\"><strong>A)<\/strong> If you are on a &#8220;Family Floater&#8221; plan, the sum insured is shared. If a parent\u2019s treatment exhausts the limit, you and your other dependents will have no cover left for the remainder of the policy year. This is why some employers separate parental cover into a different pool.<\/p>\n<h4 data-path-to-node=\"12\"><b data-path-to-node=\"12\" data-index-in-node=\"0\">4. Does the premium for my office insurance increase because of my parents?<\/b><\/h4>\n<p data-path-to-node=\"12\"><strong>A)<\/strong> Yes. Since the premium for a group policy is based on the average age of the members, adding elderly parents increases the overall risk profile, which typically leads to higher premiums for the employer (or the employee, if it is a contributory plan).<\/p>\n<h4 data-path-to-node=\"13\"><b data-path-to-node=\"13\" data-index-in-node=\"0\">5. Can I get a tax benefit for the insurance my company provides for my parents?<\/b><\/h4>\n<p data-path-to-node=\"13\"><strong>A)<\/strong> If your employer pays the full premium, you cannot claim a tax deduction. However, if you pay the premium for an <i data-path-to-node=\"13\" data-index-in-node=\"194\">additional<\/i> or <i data-path-to-node=\"13\" data-index-in-node=\"208\">voluntary<\/i> senior citizen policy for your parents, you can claim a deduction of up to Rs 50,000 under Section 80D.<\/p>\n<p><script type=\"application\/ld+json\">\n{\n  \"@context\": \"https:\/\/schema.org\",\n  \"@type\": \"FAQPage\",\n  \"mainEntity\": [\n    {\n      \"@type\": \"Question\",\n      \"name\": \"Why is it easier to cover parents under a group plan than an individual plan?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"Individual plans for seniors often require strict medical tests and have long waiting periods (2\u20134 years) for pre-existing diseases. Group plans usually waive these tests and cover pre-existing conditions from Day 1 or after a much shorter period.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"What is a \\\"Co-pay\\\" clause in parental insurance?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"A co-pay clause means that for every claim made for a parent, the employee must pay a fixed percentage (e.g., 20%) of the total bill, while the insurer pays the rest. This helps the employer reduce the overall premium cost of the policy.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"If my parent uses the entire sum insured, am I still covered?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"If you are on a \\\"Family Floater\\\" plan, the sum insured is shared. If a parent\u2019s treatment exhausts the limit, you and your other dependents will have no cover left for the remainder of the policy year. This is why some employers separate parental cover into a different pool.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"Does the premium for my office insurance increase because of my parents?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"Yes. Since the premium for a group policy is based on the average age of the members, adding elderly parents increases the overall risk profile, which typically leads to higher premiums for the employer (or the employee, if it is a contributory plan).\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"Can I get a tax benefit for the insurance my company provides for my parents?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"If your employer pays the full premium, you cannot claim a tax deduction. However, if you pay the premium for an additional or voluntary senior citizen policy for your parents, you can claim a deduction of up to Rs 50,000 under Section 80D.\"\n      }\n    }\n  ]\n}\n<\/script><\/p>\n<h4><b>About The Author<\/b><\/h4>\n<p><strong>Mayank Sharma\u00a0<\/strong><\/p>\n<p><strong>MBA Finance<\/strong><\/p>\n<p><span style=\"font-weight: 400;\">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.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Increased life expectancy comes with rising medical expenses. Thus, many young people consider it prudent to buy health insurance cover for their parents. What this does is ensure the best medical care without a major financial burden. So, as an advantage, there is a provision for adding members&#8217; parents in group health insurance plans. Most [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":3837,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"_lmt_disableupdate":"no","_lmt_disable":"no","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1,292],"tags":[48],"class_list":["post-4114","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-group-health-insurance","category-product-features-group-health-insurance","tag-group-health-insurance"],"acf":[],"modified_by":"SecureNow","_links":{"self":[{"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/posts\/4114","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/comments?post=4114"}],"version-history":[{"count":27,"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/posts\/4114\/revisions"}],"predecessor-version":[{"id":35715,"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/posts\/4114\/revisions\/35715"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/media?parent=4114"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/categories?post=4114"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/tags?post=4114"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}