What’s on this page?
Introduction
Ram’s phone pinged.
Two messages, one normal, another one on Whatsapp – both with the same text –
Congratulations on joining Zeon.
Welcome aboard!!!
You have been added to Zeon’s Group Health Insurance Policy.
Listed is a brief summary of your coverages under the policy. The detailed Terms and Conditions are available with your Human Resource Department and can be accessed whenever you feel the need to.
Your cards will be available for download in the next 24 hours.
Please add your dependents under the policy; once these have been vetted by the HR department, you can download their cards as well.
We hope and pray that you do not need to use this policy, but if you do, we are just a call away.
Ethika Insurance Broking
7559755957
This was Ram’s first job. And he had a lot of questions. He was done with his orientation training for the day and seemed to have some time on his hands. He decided to give the number a call.
Through this page, we answer all of Ram’s Group Health Insurance queries. Join in the conversation and who knows, we might surprise you.
What is Group Health Insurance?
A health insurance policy pays for your hospitalization expenses when these expenses fit the terms and conditions of the policy. The terms and conditions are mutually agreed by the Insured (you) and the Insurer (the Company issuing the policy) before getting into the agreement (the policy).
A Group Health Insurance is conceptually the same policy, but for a group of people.
But does that mean that anyone can form a group and get Group Health Insurance?
No. IRDAI guidelines prohibit the issuance of a Group Health Insurance policy to a group that has been formed solely to avail a Group Health Insurance policy.
Key Group Health Insurance Benefits
The best part about a group health insurance policy is that you can customize it, any way you want. You can ask for maternity coverage from Day 1, coverage for pre-existing conditions from Day 1, capping or no-capping of room rent, anything and everything and the Insurer will cover it. Coverage ofcourse would come at costs – better the coverage, costlier it would be – but you need not worry about costs. A good insurance broker will be able to tide through that aspect.
Listed are some of the other key benefits of a group health insurance policy
- No pre health checks for your employees
- Lower per head premiums
- Day 1 coverage for most hospitalizations
- The ability to decide on cappings (or no-cappings) for room rent and hospitalizations
- Generally reduced TATs for claims processing
How Group Health Insurance Works?
A group health insurance policy works on the concept of risk pooling. The Insurer studies the demographics (the age profile) of the company and the claims they have incurred (as a group) over the last couple of years. Broadly based on these considerations, the Insurer quotes a price that he is willing to assume the risk of covering the hospitalization of the employees of the Company through the year.
Employer vs. Employee Contributions
Generally there are three ways of operation of a Group Health Insurance policy.
- The employer could decide to bear the entire premium of the policy by himself
- The employer could subsidize the premiums, bearing a portion of the premiums. The employees in this case bear the balance premiums.
- The employer could just act as a facilitator of the policy – the employee bears the entire premium of the policy.
Coverage Options and Plan Types
The beauty of a group health insurance is the fact that you – the employer, get to choose what you want. There is no option that is outside of the scope of coverage. You structure the option that you want and approach the local insurance market for the price.
An alternative approach is to decide on your budget and let your Insurance Broker help you with the optimum benefits that they could fit into your budget.
Both the strategies have been known to benefit clients and there is generally no wrong approach.
Role of Insurer
Your Insurer in most cases will act as the pricing agent. He has to decide on how much to charge for the risk he is undertaking. Generally speaking the Insurer will not disclose his lowest price in the first go. More often than not when he says this is his lowest price, there is generally room for more.
Your negotiation skills might be tested here. Simultaneous negotiating with Insurers can help you get a rough estimate of the price that the local insurance market is willing to underwrite your insurance policy for.
Your insurer will select the Third Party Administrator (TPA) who would service your policy. More often than not the TPA is more important than the insurer, because he is the agency your employees would be dealing with.
Finally the Insurer would also act as your grievance handler. Any grievance against the TPA or the Insurer himself would need to be addressed to the Insurer.
Who is Eligible for Group Health Insurance?
Let us now look at the eligibility criteria for a Group Health Insurance policy.
Employee Eligibility Criteria
All full-time employees of a company are generally eligible for group health insurance. Some companies however, also extend coverage to part-time or contract employees. Most companies tend to cover all employees from Day 1, but that does not mean that you cannot customize coverage according to your needs.
Dependent and Family Coverage
Most group health insurance plans generally allow for coverage of dependents. The number of dependents you allow coverage for, could vary. While a general rule of thumb is to cover spouses and children, a lot of employers extend some help in covering parents. This help could be in the form of actual coverage for parents, subsidizing parental policy premiums or acting as a facilitator for the parental policy. At Ethika, we specialize in tailoring coverage for dependants at optimal premiums.
Special Considerations for Part-Time Workers
With the increase in outsourced employees working across offices, a lot of employers have started extending health insurance coverage to outsourced and part-time workers. While the extent of coverage for these workers might not be the same, the broad contours of the coverage remains the same for part-time workers as well.
What is the Difference Between Group Health Insurance and Individual Plans?
Group health insurance plans are typically offered to a group of individuals (generally employees of a company), while individual health insurance plans are purchased by individuals for themselves and their families. Some of the areas of difference between the two include
| Feature | Group Health Insurance | Individual Health Insurance |
| Policy Holder | Employer or Organization | Individual |
| Eligibility | Employees of a company or members of a group | Any individual |
| Premium Costs | Generally lower due to spread of risk over a large group of people | Generally higher |
| Medical Underwriting | Mostly not required | Typically required, individual health may affect premiums or coverage |
| Coverage | Customizable based on group needs | Less flexible, pre-defined plan options |
| Portability | At the discretion of the Insurer | Allowed |
| Waiting Periods | Waiver can generally be sought by paying extra premiums | Waivers in waiting periods are generally not allowed |
| Dependent Coverage | Dependent on the Employer | Available |
| Claims Process | Employer can ask for a dedicated single point of contact | Insured generally has to liaise directly with the TPA |
| Customization | Can be tailored to the specific needs of the Employer | Limited customization options |
| Tax Benefits | Available for Employers if they are paying the premiums for the insurance | Available for Individuals |
| Enrollment | Generally from the first day of employment | Individuals might need to go through the process of medical underwriting before policy issuance |
| Renewal premiums | Dependent on the claims made by all of the Employees combined | Renewal premiums are generally not dependent on the claims made in the policy, unless the quantum is significantly on the higher side |
| Cost Control | Employer has some control over cost by virtue of having designed the policy and other measures adopted throughout the policy period | Individuals generally have lower control over costs |
How are Group Health Insurance Premiums Calculated?
While the calculation of premiums is a complicated process undertaken by Actuaries, your Insurer will generally rely on most of the following factors to decide on your groups health insurance premium –
- The total sum insured under your policy. This denotes the maximum outgo for the Insurance Company in a year.
- Demographics of the company.
- The nature of work performed by your employees happens to be a key determinant of the premiums.
- The number and age of dependents to be covered. The chance and frequency of hospitalization for Elder parents is on the higher side, accordingly, the Insurer might charge a bit extra for extending coverage to parents.
- The geographical area where the coverage would be extended – the average cost of Hospitalization in Hyderabad might be a tad bit less than that in Bengaluru.
- The coverages and exemptions sought under the policy are one of the key determinants of premiums.
- The extent of cappings you allow for, also decide on how much you need to pay as premiums.
- Your past claims history is generally a good predictor of the future premiums.
How to Choose the Right Group Health Insurance Plan
Your group health insurance policy is YOUR group health insurance policy. The right group health insurance policy could be used as a tactical advantage to attract and retain the right set of employees.
Employers, particularly in the West, have been known to extend health coverage when laying of employees – that ofcourse if you have chosen the right group health insurance plan.
While choosing the right group health insurance plan might seem like a complex, complicated exercise, it essentially burns down to three things
- Who all do you want to cover under your group health insurance
- What are the benefits you want to offer your employees & to what extent
- How much is the cost you are willing to bear for the coverage
Ready to experience the Ethika difference?
For over nine years, we’ve been the trusted partner for over 500 clients. We have helped them secure comprehensive health insurance coverage for their employees and families. We understand that insurance can be complex, and therefore we try to simplify it to the best extent possible.
We look at Insurance as a Service and not as a product. Our endeavor therefore is to enhance the quality of delivery.
Our unique Red Carpet Assistance program sets us apart. We know that when your employees or their loved ones need medical care, time is of the essence. Our team of dedicated professionals works round the clock to minimize wait times and enhance the quality of delivery.
Call us for a free quote today!!!
Common Challenges With Group Health Insurance
While no other product beats group health insurance in terms of the comprehensiveness of coverage, the operational aspects of the product could leave you aspiring for more. Some of the common challenges include
- A badly underwritten policy could lead to non-settlement or lesser settlement of claims
- Untimely settlement of claims could lead to a lot of employee grievances
- A policy that is not perceived as a good policy could lead to a lot of employee grievances
- Managing the Third Party Administrator might get difficult at times
- Managing the costs through the policy year ensures your renewal premiums do not inflate at renewal, but this is easier said than done
Future Trends in Group Health Insurance
We are slowly but steadily moving towards becoming a country that focuses on preventive care. So much so that the preventive care industry could beat the health insurance industry in times to come.
Here are some trends that might shape the future:
- Increased focus on wellness programs: Employers are increasingly incorporating wellness programs into their health insurance plans to promote employee health and reduce healthcare costs.
- Greater use of technology: Technology is being used to streamline the enrollment process, improve claims processing, and provide employees with access to health information and resources.
- Personalized health plans: Insurers are exploring ways to offer more personalized health plans that cater to the individual needs of employees.
- Value-based care: There is a growing emphasis on value-based care, which focuses on improving health outcomes while reducing costs.
- The AI effect: With increased adoption of AI, we might very soon have assistants who could help employers with all of their group health insurance needs, relegating insurance intermediaries to a back seat.
Conclusion
Group health insurance is a valuable benefit for both employees and employers. It provides access to affordable healthcare, promotes employee well-being, and can help businesses attract and retain top talent. By carefully considering their needs and working with a qualified insurance broker, businesses can choose the right group health insurance plan to meet their specific requirements.
We seem to have resolved most of Ram’s queries, with the assurance that Ethika would be available 24/7, 365 days of the year, should he need any further assistance.
How about you?
If you still have some concerns, we are just a call away.
Frequently Asked Questions (FAQs)
- How Does Employer Contribution Affect Premium Costs?
The employer’s contribution towards the premium directly impacts the employee’s out-of-pocket cost. Higher employer contributions result in lower premiums for employees.
- Can a Business Offer Different Health Insurance Plans to Employees?
Yes, businesses can offer different health insurance plans to employees, often based on factors like job level, tenure, or employee choice.
- What Happens to Group Health Insurance if a Business Closes?
The basis of a Group Health Insurance policy is the group whose foundation is based on the business entity. Since the policy is issued to the business entity which has ceased to exist the policy terminates.
- How Does a Business Enroll in a Group Health Insurance Plan?
Businesses can enroll in a group health insurance plan through an insurance broker, or directly with an insurance company.
- Are There Tax Benefits for Employers Offering Group Health Insurance?
Yes, employers can avail of tax benefits by offering group health insurance. The premiums that the employer bears can be shown as a business expense and exemption can be sought.
