Group health insurance refers to a health insurance policy provided by employers to cover the healthcare costs of their employees and often their dependents. It is an essential employee benefit that can provide affordable access to high-quality healthcare services. However, like any other type of health insurance, group health insurance comes with its own set of pros and cons.
But before we dive into the pros and cons of group health insurance, let us read about what group health insurance mean.
Group health insurance: Overview
A group health insurance policy provides coverage for the medical expenses of all the individuals included in the group. Generally, companies, corporates, or organisations buy a group health insurance plan for their employees or members. The companies offer medical insurance policies as an employee benefit. Policy owners pay a single premium towards the health insurance policy and keep renewing the policy with time. In some cases, organisations pay more than 50 per cent premium, while the remaining portion gets deducted from the employee’s salary. Both employee and employer then get the tax benefit against this health insurance.
9 pros of group health insurance policy
Here are the advantages of group health insurance that benefit both employees and employers.
Less employee turnover
Employees feel valued when the organisation puts their well-being first. Also, the assurance that their loved ones have a financial backup in case of emergency gives them peace of mind. This motivates them to work harder and focus on their work growth. It also reduced the chances of employees leaving the organisation.
Tax benefits
You get tax benefits on the group health insurance policy. The company can reduce their taxable income if it purchases this policy for its employees.
Lower premiums
Group health insurance policy comes at a lower premium. As a company includes several members under one health care policy, it has the option to negotiate the premium price.
Effective CSR policy
Providing effective employee benefits and security falls under the organisation's corporate social responsibilities (CSR). It gives a positive impression about the company in the market.
Covers medical expenses of all employees
Employees get coverage for treatment and hospitalisation costs. They also get coverage for expenses of the ambulance, medicines costs, doctor's fees, etc. as specified in the policy.
Cashless claim at network hospitals
Employees can get cashless treatment(through cashless health insurance) at any of the insurer’s network hospitals. Here the employee only needs to get admitted or treated without having to pay the hospital directly. The insurer will settle the bills directly with the hospital.
Medical coverage for dependents
Many group health insurance policies cover employees’ dependent family members, including children, spouses, and parents.
Add-on benefits
Policyholders can also include several add-on benefits, such as maternity cover and pre-existing diseases cover under the policy.
Offers some flexibility
The policy owner can choose the policy term according to the requirements of the group members.
Read on to know the pros and cons of group insurance policy for employees.
Cons of group health insurance policy
Know the disadvantages of group health insurance plans.
Lack of flexibility
Employees do not enjoy much freedom in a group health insurance policy. As an organisation maintains this policy, individual employees cannot customise it according to their preferences. For example, they have no option to increase their sum insured or avail of add-on benefits if they want to. You get add-on benefits only if the company opts for them.
Inadequate coverage
The coverage amount employees get usually does not suffice the treatment costs at renowned hospitals, especially in metro cities. Individuals may have to pay from their pocket if required.
Discontinuation of coverage
The group health insurance policy will discontinue if you leave the company. This means you are no longer covered under any health insurance policy. Therefore, you can claim for any health insurance benefits under this plan.
Delay in claim
Claim process under this insurance type may take some time. Delaying the claim settlement, and hence you may receive the compensation late.
Not helpful for personal financial planning
Employee health insurance is a group policy offered by the employer. The coverage offered under this policy may not be sufficient. An individual health insurance is a better choice to make for personal financial investment.
Considering the above factors, you can also opt for a separate health insurance policy along with the group health insurance policy. It is advised one should have additional health insurance to stay fully covered during medical emergencies.
Alternatives to employer-sponsored group health insurance policy
You can opt for the below health insurance policies to secure yourself and your family.
Individual health insurance
You can buy an individual health insurance plan with comprehensive coverage for hospitalisation and other medical-related expenses. You have the flexibility to customise the policy as per your needs. You can avail of add-on covers like hospital cash cover, personal accident cover, critical illness cover, etc.
Family health insurance policy
You can also opt for family health insurance, wherein all the family members get covered under one plan. The sum insured under this plan gets shared among the members. So, whoever falls sick or in case of a medical emergency can claim the benefits. You can also customise this health insurance policy, and increase the sum insured if required.
In conclusion, group health insurance is an excellent option for employers looking to offer affordable healthcare coverage to their employees. While it does come with some limitations, the advantages outweigh the disadvantages. However, policy buyers must examine the policy specifications, coverages, and benefits offered to make an informed decision. This will help all the members insured under the plan avail the best possible healthcare services, taking care of their health, and mental well-being.
Know the other terms associated with health insurance policy
Here’s a quick view at some of the health insurance related terminologies.
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