{"id":4171,"date":"2017-03-30T11:33:46","date_gmt":"2017-03-30T11:33:46","guid":{"rendered":"https:\/\/securenow.in\/blog\/?p=4171"},"modified":"2026-03-18T09:46:55","modified_gmt":"2026-03-18T09:46:55","slug":"should-you-buy-multiple-individual-plans-or-one-group-health-plan","status":"publish","type":"post","link":"https:\/\/securenow.in\/insuropedia\/should-you-buy-multiple-individual-plans-or-one-group-health-plan\/","title":{"rendered":"Multiple individual plans or one group health plan?"},"content":{"rendered":"<div id=\"bsf_rt_marker\"><\/div><p><strong>Multiple individual plans or one group health plan?<\/strong><\/p>\n<p>A group health insurance plan is an effective tool to increase employee motivation. Most employers avail of a single group mediclaim policy that covers all their employees. However, you could also opt for a different approach and have multiple individual insurance plans for employees. While such a decision could have some benefits, it has many downsides. It is important to understand these to make a balanced choice.<\/p>\n<h3 data-path-to-node=\"5\">Key Takeaways<\/h3>\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\">The Waiting Period Hurdle:<\/b> Individual plans almost always include a 2-4 year waiting period for pre-existing conditions. Group plans are superior here as they generally offer &#8220;Day 1&#8221; coverage for all ailments.<\/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\">Administrative Burden:<\/b> Managing dozens of individual policies means tracking different due dates, insurers, and claim procedures, which can overwhelm an HR department.<\/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\">Retention Dynamics:<\/b> Because an individual plan stays with the employee even after they resign (if they pay the premium), it loses its &#8220;hook&#8221; as a tool to retain talent compared to a group-only benefit.<\/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\">Cost Inefficiency:<\/b> Individual retail premiums are significantly higher than group rates. For small and medium enterprises (SMEs), providing individual plans is often financially impractical.<\/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\">Coordination Complexity:<\/b> If an employee holds both a company-provided individual plan and a personal one, coordinating benefits during a claim becomes legally and procedurally difficult.<\/p>\n<\/li>\n<\/ul>\n<h2><strong>Advantages of multiple individual plans <\/strong><\/h2>\n<h3><strong>Substitute cover <\/strong><\/h3>\n<p>Multiple individual health insurance plans ensure diverse benefits for employees. For example, one plan may have a one-year waiting period for cancer coverage but another may not. An employee who has not completed a year with an organization but needs treatment for cancer can rely on the second health plan. In this approach, the individual health plan has to be customized for each employee, which is an elaborate process.<\/p>\n<h3><strong>Increased specialized coverage<\/strong><\/h3>\n<p>Multiple individual health plans offer more scope for specialized treatments like dental and vision check-ups and remedies. These are most relevant in individual plans that offer OPD coverage as well.<\/p>\n<h3><strong>Tax benefits<\/strong><\/h3>\n<p>According to <a href=\"https:\/\/securenow.in\/insuropedia\/save-tax-under-section-80d-on-preventive-health-check-ups\/\">section 80D of the Income Tax Act<\/a>, premiums for group health insurance plans are eligible for a tax deduction. If employees are paying for the insurance and then getting reimbursed, then the employees will be eligible for tax benefits. If the company is paying for the insurance, then it could claim this as an employee expense.<\/p>\n<h3><strong>Lifelong cover<\/strong><\/h3>\n<p>Individual insurance is renewable lifelong. This means that employees can benefit even if they leave the company, by paying the premiums themselves. While this benefits employees, it means that insurance is not being used as a retention tool.<\/p>\n<p>Multiple health insurance plans may be recommended for individuals who want to maximize their health coverage and minimize out-of-pocket expenses. For example, if an individual has coverage through their employer and also purchases an individual health insurance plan, they may be able to use both plans to cover their medical expenses. Additionally, individuals who have specific health needs that are not covered under their primary insurance plan may consider purchasing a supplemental plan to provide additional coverage. It&#8217;s important to note that coordinating benefits between multiple insurance plans can be complex, and individuals should carefully review their policies and consult with their insurance providers to ensure they are maximizing their coverage and minimizing their costs.<\/p>\n<h2><strong>Disadvantages of multiple individual plans <\/strong><\/h2>\n<p>The disadvantages of individual plans outweigh the advantages.<\/p>\n<h3><strong>Difficult to manage<\/strong><\/h3>\n<p>Multiple individual health plans can be really difficult to manage. The concerned department would have to keep track of different due dates for premium payment and renewal, especially if the plans are from different insurers. Helping an employee with the claims process will also be challenging if different insurers have different processes.<\/p>\n<h3><strong>Increased administrative costs<\/strong><\/h3>\n<p>Availing of multiple plans will drastically increase administrative costs. The significant increase in premium costs makes this option impractical for small- or medium-sized enterprises.<\/p>\n<h3>Summary Table: Individual Plans vs. Group Health Insurance<\/h3>\n<table data-path-to-node=\"3\">\n<thead>\n<tr>\n<td><strong>Feature<\/strong><\/td>\n<td><strong>Multiple Individual Plans<\/strong><\/td>\n<td><strong>Single Group Health Plan<\/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\">Administration<\/b><\/span><\/td>\n<td><span data-path-to-node=\"3,1,1,0\">Complex; multiple renewal dates and processes.<\/span><\/td>\n<td><span data-path-to-node=\"3,1,2,0\">Simplified; one master policy and one renewal.<\/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\">Waiting Periods<\/b><\/span><\/td>\n<td><span data-path-to-node=\"3,2,1,0\">2 to 4 years for pre-existing diseases.<\/span><\/td>\n<td><span data-path-to-node=\"3,2,2,0\">Usually waived; coverage starts from Day 1.<\/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\">Portability<\/b><\/span><\/td>\n<td><span data-path-to-node=\"3,3,1,0\">High; employee can keep the plan after leaving.<\/span><\/td>\n<td><span data-path-to-node=\"3,3,2,0\">Low; typically ends with employment.<\/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\">Cost<\/b><\/span><\/td>\n<td><span data-path-to-node=\"3,4,1,0\">High; individual retail rates apply.<\/span><\/td>\n<td><span data-path-to-node=\"3,4,2,0\">Low; bulk\/group discounts apply.<\/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\">Retention Value<\/b><\/span><\/td>\n<td><span data-path-to-node=\"3,5,1,0\">Lower; the benefit is not exclusive to the firm.<\/span><\/td>\n<td><span data-path-to-node=\"3,5,2,0\">Higher; acts as a strong incentive to stay.<\/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\">Customization<\/b><\/span><\/td>\n<td><span data-path-to-node=\"3,6,1,0\">High; tailored per individual employee.<\/span><\/td>\n<td><span data-path-to-node=\"3,6,2,0\">Moderate; standardized for the whole group.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3><strong>Health insurance does not act as a retention tool <\/strong><\/h3>\n<p>In individual plans, the employee can opt to pay the premium themselves if they leave the company. So, the retention benefit of an individual plan is less than group plans which cannot be bought individually.<\/p>\n<h3><strong>Limited coverage <\/strong><\/h3>\n<p>It can be disappointing if employees find that in spite of individual policies, insurance companies reject their claims. Individual plans always have some restrictions, such as waiting periods that vary between two and four years. Insurers waive these waiting periods in group plans.<\/p>\n<p>So, in most cases, a well-researched employee group health insurance plan that meets most of the requirements of an organization\u2019s employees is a better option than multiple individual plans.<\/p>\n<p><strong>Additional Read:<\/strong> <a href=\"https:\/\/securenow.in\/insuropedia\/how-do-i-buy-a-group-health-insurance-policy\/\">How to buy a Group Health Policy?<\/a><\/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 a group plan considered better for employees with chronic illnesses?<\/b><\/h4>\n<p data-path-to-node=\"9\"><strong>A)<\/strong> In an individual plan, an insurer might reject an applicant with a severe chronic illness or impose a 4-year waiting period. Group plans cover everyone in the organization regardless of their health history, often including those chronic illnesses from the first day.<\/p>\n<h4 data-path-to-node=\"10\"><b data-path-to-node=\"10\" data-index-in-node=\"0\">2. Can an employee claim tax benefits if the company provides an individual plan?<\/b><\/h4>\n<p data-path-to-node=\"10\"><strong>A)<\/strong> If the company pays the premium directly, the company claims it as a business expense. However, if the employee pays the premium and the company later reimburses them, the employee may be eligible for tax deductions under Section 80D.<\/p>\n<h4 data-path-to-node=\"11\"><b data-path-to-node=\"11\" data-index-in-node=\"0\">3. What happens if an employee leaves the company under an individual plan setup?<\/b><\/h4>\n<p data-path-to-node=\"11\"><strong>A)<\/strong> The employee has the option to continue the policy by paying the premiums themselves. This &#8220;lifelong renewability&#8221; is a benefit for the individual but reduces the employer&#8217;s leverage in terms of employee retention.<\/p>\n<h4 data-path-to-node=\"12\"><b data-path-to-node=\"12\" data-index-in-node=\"0\">4. Is it possible to get specialized covers like Vision and Dental in a Group Plan?<\/b><\/h4>\n<p data-path-to-node=\"12\"><strong>A)<\/strong> Yes. While individual plans often highlight these as &#8220;specialized&#8221; perks, an employer can easily add Vision, Dental, or OPD riders to a Group Health Insurance policy by paying a small additional premium.<\/p>\n<h4 data-path-to-node=\"13\"><b data-path-to-node=\"13\" data-index-in-node=\"0\">5. Which option is more scalable as my company grows from 10 to 100 employees?<\/b><\/h4>\n<p data-path-to-node=\"13\"><strong>A)<\/strong> A group health plan is far more scalable. Adding a new employee to a master policy is a simple administrative update, whereas buying a 100th individual policy would require a 100th set of medical declarations and separate underwriting.<\/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 a group plan considered better for employees with chronic illnesses?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"In an individual plan, an insurer might reject an applicant with a severe chronic illness or impose a 4-year waiting period. 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This \\\"lifelong renewability\\\" is a benefit for the individual but reduces the employer's leverage in terms of employee retention.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"Is it possible to get specialized covers like Vision and Dental in a Group Plan?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"Yes. While individual plans often highlight these as \\\"specialized\\\" perks, an employer can easily add Vision, Dental, or OPD riders to a Group Health Insurance policy by paying a small additional premium.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"Which option is more scalable as my company grows from 10 to 100 employees?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"A group health plan is far more scalable. Adding a new employee to a master policy is a simple administrative update, whereas buying a 100th individual policy would require a 100th set of medical declarations and separate underwriting.\"\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>Multiple individual plans or one group health plan? A group health insurance plan is an effective tool to increase employee motivation. Most employers avail of a single group mediclaim policy that covers all their employees. However, you could also opt for a different approach and have multiple individual insurance plans for employees. While such a [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":4173,"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":[48,1487,1572],"class_list":["post-4171","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","tag-individual-health-plans","tag-employee-group-health-insurance-plan"],"acf":[],"modified_by":"SecureNow","_links":{"self":[{"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/posts\/4171","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=4171"}],"version-history":[{"count":23,"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/posts\/4171\/revisions"}],"predecessor-version":[{"id":35721,"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/posts\/4171\/revisions\/35721"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/media?parent=4171"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/categories?post=4171"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/securenow.in\/insuropedia\/wp-json\/wp\/v2\/tags?post=4171"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}