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Group Health Insurance: Expectations vs Reality

Group health insurance is a type of health insurance in which the hospitalization bills are reimbursed by the insurance companies. Group health insurance premium is paid by the employer whereas the insurance cover is enjoyed by the employee till the time they are on the payroll of the organization.

Because the business pays the premium, this is frequently offered to employees as a desirable perk. In some situations, the coverage of the group health insurance might be extended to the employees’ family members. Employee health insurance or company health insurance are both terms used to describe this type of insurance plan.

However, the cost is significantly lower than individual health insurance plans, and it also saves companies money in the form of tax breaks, making it a win-win situation for both the employer and the employee.

Read more: Health Insurance Tax Benefits

Benefits of Group Health Insurance Plan

The following are some of the most important advantages of group health insurance:

1. Reduce attrition

With so many organizations offering so many benefits, it’s easy for employees to change employment. As a result of the high attrition rate, has an impact on the company’s overall performance. Employee benefits, such as health insurance, keep employees happy and help firms win employee loyalty.

2. Benefit from Taxes

Employees who purchase health insurance are eligible for tax incentives.

3. Employee motivation

Health insurance policies have gotten prohibitively expensive in recent years. As a result, health insurance may be difficult to come by for some low-wage workers. If their employers provide health insurance, they will not only feel safer on the job, but they will also feel appreciated as employees, and they will put up their best efforts at work.

4. Pre-existing conditions

Pre-existing conditions are covered under a group health insurance policy, making it easy for everyone to obtain coverage without having to undergo any testing.

5. Maternity insurance

Maternity coverage is available for both regular and C-section deliveries in most group health insurance plans. They also provide coverage for newborn newborns for up to 90 days.

Expectations vs Reality

Expectation

  • Group health insurance policy covers all kinds of claims
  • No pre-existing waiting period
  • No initial waiting period
  • No specific disease waiting period
  • No co-pay
  • Value addition by insurance intermediaries
  • Auto additions/ deletions of members

Reality

  • There are certain exclusions even under the group health insurance policy such as war or nuclear war-related injuries, cosmetic treatments, dental treatments, etc. There are certain permanent exclusions under the group health insurance policy which would not be covered. Few group health insurance policies do not cover the consumables cost at the time of hospitalization of the insured.
  • A pre-existing waiting period is a condition under which the insured customer has to wait for a period before making a claim under the group health insurance policy. Any condition, illness, or disease that exists prior to the inception of the health insurance policy is known as a pre-existing condition. The minimum waiting period for pre-existing conditions is 1 year and the maximum period is 4 years.
    Group health insurance policy comes with the option of pre-existing disease waiting period waiver and inclusion of pre-existing disease waiting period.
  • The initial waiting period or 30 days waiting period is the condition in which the insured customer has to wait for at least 30 days before making a claim under the policy. The initial waiting period is not applicable for accident-related claims.
    Group health insurance policies do have an initial waiting period which can be waived off depending on the decision of the customer.
  • The specific disease waiting period is a condition under which the insured customer has to wait for a particular period of time before making a claim under the health insurance policy. Certain diseases mentioned under the group health insurance policy such as Knee replacement, hernia, etc., are eligible to be claimed only after satisfying the specific waiting period which would range from 1 to 2 years.
    Group health insurance policies do have a specific disease waiting period which can be waived off depending on the decision of the customer.
  • Co-pay is a percentage of the claim amount that has to be borne by the insured customer at the time of claim settlement. Co-pay ranges from 20% to 50% depending on the type of health insurance policy.
    Group health insurance policies do have the co-pay option which can be waived off depending on the decision of the customer.
  • There are certain value additions that are provided under the group health insurance policy such as free medical checkups, an employee assistance program at the time of claim settlement, red carpet claim settlement, etc. These value additions would be provided only by certain insurance broking companies such as Ethika insurance broking.
    All the insurance intermediaries available in the market would not offer such value additions for their group health insurance customers.
  • The additions and deletions under the group health insurance policies are not automatic. HR or the Admin of the organization should intimate the insurance company to make the necessary additions or deletions of members under the group health insurance.
    Or else the employer can make the additions and deletions in the portal provided by Ethika insurance broking which can be synchronized with the HRBP portal of the employer.

 

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FinanceGABhttps://www.financegab.com/
Ajeet Sharma, the founder of Financegab and a well-known name in the field of financial blogging. Blogging since 2017, he has the expertise and excellent knowledge about personal finance. Financegab is all about personal finance which aims to create awareness among people about personal finance and help them to make smart, well-informed financial decisions.

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