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Pros and Cons of Group Insurance Scheme for Employees
Group Health Insurance for employees is known as Corporate Health Insurance Plan or Employee Health Insurance. Such a Group Health Insurance Policy is purchased by employers for their employees. Here’s an overview of the pros and cons associated with such Employer-Employee Insurance.
Pros of Group Health Insurance
Listed below are some of the advantages of such a policy.
1. Free Coverage
The premium for a Group Mediclaim Policy is paid by the company on behalf of the employees. Thus, such a plan is available free of cost to the employees.
2. No Waiting Period
If your policy has a waiting period, you have to ‘wait’ for pre-defined days before you are allowed to raise a claim for pre-existing diseases. A Group Health Insurance Plan for Employees does not have such a waiting period as pre-existing diseases are covered from the first day of the policy.
3. Cover for Family Members
The Group Insurance Policy for Employees allows you to add family members to the cover. For example, you can opt for your spouse and parents to be covered by the policy in case of a medical emergency.
4. Maternity and New-born Baby Coverage
A major advantage of the Group Insurance Scheme for Employees is that it covers maternity-related expenses (delivery and related medical treatment). Similarly, the new-born baby is also covered for up to 90 days.
5. Cashless Hospitals
Top insurance companies offering such a cover have tie-ups with hospitals for a streamlined claim settling process. Due to such a tie-up, the hospital bills are settled smoothly between the insurer and the hospital. For example, ACKO has more than 5,000 Cashless Hospitals.
6. OPD Coverage
Out-patient treatment is also covered in such a plan. Therefore, treatment in a hospital or a day-care facility as an out-patient (without being hospitalised) shall be covered by the policy as per the terms and conditions.
7. Preventive Healthcare and Extra Benefits
Preventive healthcare measures help prevent illnesses or reduce their intensity. Insurers incentivise preventive healthcare initiatives to help you maintain a healthy lifestyle. For example, you can track your fitness routine using the ACKO app and unlock rewards on achieving milestones.
Group Mediclaim Plans also come with a long list of extra benefits. For example, ACKO’s Corporate Health Insurance Plan offers extra benefits in the form of teleconsultations with specialist doctors and booking lab tests and medicines using the ACKO app.
Cons of Group Insurance Policy
Listed below are some of the disadvantages of such a policy.
1. Fear of Discontinuation
In a situation where you are laid off by your employer or you choose to leave the company, you will no longer be covered by the Group Health Policy. In simple words, you will be covered by the policy till the time you are a part of the group, which in this case is till you are an employee of the company.
2. Employer-dependent Cover
Your employer has the power to choose the health insurance company, determine the coverage, and select other features and benefits of the health plan. In such a scenario, there is less scope to cover individual-specific needs. Thus, you are a part of a generic cover that is the same for other employees in the company.
3. Lack of Control
As the cover is controlled by the employer, you as an employee/policyholder do not have much freedom to customise the plan to your liking. In cases where certain freedom is allowed, you might be required to pay extra for it. For example, if you want to enhance the coverage, you will have to pay the applicable premium from your pocket.
4. Inadequate Coverage
The coverage offered by Corporate Health Plans might not be adequate for metro cities where the cost of hospitalisation is on the higher side as compared to other areas.
5. No Tax Benefit
As you are not paying the premium to purchase the health policy, you cannot avail of tax benefits under section 80D of the Income Tax Act. However, you can avail them if you enhance the cover and pay for the additional coverage.
6. Claims Can Be Troubling
Historically, people are concerned about the time taken to settle claims or the extent to which the claims will be settled. This feeling can be amplified in the case of Employee Health Insurance as you are not the one who has chosen the health insurance company or the coverage. The claim settlement process can be troubling unless you are covered by an insurer who offers a hassle-free way to claim. For example, ACKO offers a seamless claim settling process, which can be initiated via the app. It is paperless, convenient, and easy to use.
7. Unreliable for Personal Financial Planning
Health insurance is a critical component of personal financial management. Due to the above-mentioned disadvantages, a Corporate Health policy is unreliable for personal financial planning. For example, as the policy does not offer continuous coverage, or offers inadequate coverage, it becomes difficult to factor it into an annual financial plan. Comparatively, you have a lot more control over an Individual Health Plan. An Individual Plan helps in better financial management at a personal level as you can plan how much you want to spend on health insurance on an annual basis.
Though Group Medical Insurance can act as an effective cushion for medical emergencies, it is recommended to have a more customised health insurance plan in place for better coverage. Ideally, you should have some sort of individual health insurance cover so that you are not entirely dependent on the employer-offered coverage. For example, even if your employer offers a Group Health Plan, you can purchase an Arogya Sanjeevani Policy for yourself. Or, you can buy Individual Health Policy or a Family Floater for enhanced coverage.
Also, Read: Switch from Group Health Insurance to Individual Health Insurance
Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions.
Frequently Asked Questions
Here’s a list of common questions and answers concerning Employee Health Insurance.
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