Group Health Insurance for Small Businesses: Key Considerations

Onsurity Editorial
March 7, 2024
11 min read

Group Health Insurance for Small Business

As a small business owner in India, have you considered the value and protection offered by a health insurance plan for your employees? A well-structured group health insurance plan can be a cornerstone of your employee benefits package, driving talent acquisition and retention in today’s competitive market.

Apart from being one of the attractive incentives for potential employees, these plans provide critical coverage for your dedicated team. In case of routine check-ups or unexpected medical emergencies, insurance coverage for employees offers peace of mind and financial security.

Furthermore, additional benefits like pre and post-hospitalisation expenses offer added reassurance. In this article, we will discuss the importance of group health insurance for small businesses and highlight other key points that will help you choose a suitable insurance plan for your employees.

Also, Read: Types of Health Insurance in India

What is Group Health Insurance?

Group health insurance might seem like a complex concept, but in essence, it is an inclusive policy providing healthcare coverage for team members, protecting them and your business against unexpected health-related financial burdens.

Investing in a group health insurance plan not only covers healthcare costs arising from planned or unplanned hospitalisation but also includes wellness programmes, pre- and post-hospitalisation expenses, teleconsultations and regular health check-ups. Providing such comprehensive health coverage for the employees contributes to their retention and provides satisfaction.

How Does Group Health Insurance Work for Small Business?

A group health insurance for small business operates just like it does for larger companies, but on a smaller scale. You, as an employer, purchase the health insurance plan for your employees. This ensures that they can access necessary healthcare in case of medical emergencies.

The benefits of the plan are twofold:

Available all year round: After purchase, premiums are secured for a year. Within this period, you can add or remove staff as they join or leave your organisation.

Flexibility: At the end of the term, you have the option to renew the group health insurance plan or choose a new one to align with changing business requirements.

Quick Read: Employer Employee Insurance

Importance of Group Health Insurance for Small Business

A group health insurance policy is vital for any small business. Opting for the plan is cost-effective, as it offers more affordable premiums than individual health insurance. Various advantages of group health insurance for small business owners include:

Affordable premiums: Group policies offer lower premiums compared to individual policies.

Pre-existing disease coverage: This is an important aspect of group health insurance because, unlike individual health insurance, group policies cover existing illnesses. To avoid ambiguity, this should be clearly communicated by business owners to the employees.

Maternity and infant care benefits: This is an added prerequisite that can benefit female employees who are starting families.

Extensive coverage: Group health insurance covers pre and post-hospitalisation expenses, giving comprehensive coverage.

Acquiring the best group health insurance for small business owners is not only crucial but also beneficial in numerous ways. These plans are designed considering the requirements and affordability of small businesses.

Before choosing the best group health insurance for your small business, consider factors like coverage options, network hospitals in the policy, premiums involved, and waiting period for certain treatments. Also, be sure to compare various insurance companies before making your decision.

How Group Health Insurance Can Benefit Small Businesses?

Shouldering the responsibility of safeguarding your employees’ health can drive several benefits for your small business. Here’s how:

benefits of group health insurance for small business

1. Enhancing employee wellbeing:

The significance of group health insurance for a small business cannot be overstated. This coverage plan facilitates access to preventive care and medical treatments, helping improve overall employee wellbeing. In effect, you’ll notice a decrease in sick leaves and an efficient, healthier workforce contributing to the business.

2. Attracting talent:

A competitive group health insurance policy can be a game-changer when it comes attracting and retaining skilled employees. It lowers hiring costs and increases productivity by ensuring that the staff feel valued and cared for.

3. Scaling your business:

Delivering a comprehensive group health insurance plan can create a vibrant workplace environment, fostering employee satisfaction. It assists in controlling healthcare costs, contributing to the scalability of your small business.

4. Tax advantage:

The purchase of group health insurance can be viewed as an investment that pays dividends, especially when it comes to tax breaks. Enjoy considerable saving while providing your team with financial protection against any health-related contingencies.

5. Embracing technology:

Today’s workforce seeks quick, efficient access to their health benefits. Digital insurance is redefining this with innovative mobile applications, simplifying claim processes for everyone.

It’s a brilliant opportunity to facilitate seamless healthcare for your employees, bringing comfort and convenience right at their fingertips. Therefore, partnering with an insurance provider who provides digital access to policies benefits small businesses as employees appreciate this convenience.

From group medical insurance to individual policies, knowing the ins and outs of each offering is crucial to make an informed decision. Purchase a group health insurance that is best suited to your organisations needs because your choice directly impacts the lives of your employees. So, invest wisely and reap the benefits of group health insurance for your small business.

Related Read: Top Features of Group Health Insurance

Common Challenges Faced by SMEs in Offering Group Health Insurance

As a small- and medium-sized enterprise (SMEs) owner in India, you understand the vitality of group health insurance for your business. However, navigating the complexities of implementing a group health insurance policy comes with its own set of challenges. Let’s delve into some common obstacles you might face while offering group health insurance for your employees.

1. Rising medical costs:

High medical costs can impose a substantial financial burden on SMEs, especially when providing comprehensive healthcare coverage to their employees. Balancing the cost of healthcare benefits with limited financial resources can be challenging, potentially affecting the overall financial stability of SMEs.

2. Policy understanding:

Grasping the details embedded in the policy can be daunting. Health insurance terms like ‘network hospitals’, ‘pre-existing diseases’, ‘waiting period’ and ‘room rent limit’ often cause confusion.

3. Employee education:

4. Choosing the right plan:

With myriad options available, finding the best group health insurance for small business owners is challenging. Each plan has its advantages, intricacies and differences in coverage making it difficult to choose one that suits everyone’s needs.

5. Administering the policy:

Managing a group health insurance policy requires time and resources. It includes tasks like maintaining records, liaising with the insurance company, handling claims etc.

6. Navigating health insurance companies:

Finding a reliable insurance company that offers comprehensive coverage, including pre and post-hospitalisation expenses, at competitive rates can be an uphill task.

7. Changing regulations:

The landscape of health insurance changes quickly. For SMEs without a dedicated HR or legal team, staying abreast with these changes can be a challenge.

Navigating these challenges means understanding the terms and conditions in the policy, investing time to research options and considering the benefits of group health insurance.

Your aim should be to provide wellness coverage that balances your financial capabilities with your employees’ needs. Once the challenges are overcome, a well-chosen group health insurance plan can yield long-term benefits for your company and your employees.

How to Choose the Right Group Health Insurance Plans for Small Businesses?

Choosing the best group health insurance policy requires thoughtful evaluation of various factors to ensure the policy aligns with the needs of your employees. Here are some steps you can follow:

Assess your employees’ needs: Start by understanding the unique health requirements of your employees and their families. Factors like age, medical history, and potential risks play a significant part in deciding the appropriate coverage amount.

Compare multiple plans: When it comes to group health insurance for small business owners, settling for the first policy you come across might not always be the best option. Compare multiple plans from different insurers, looking at aspects like coverage, premium, and scope.

Check network hospitals: In group health insurance plans, the proximity to a network hospital can be a lifeline during emergencies. Ensure that the health insurance policy includes a wide network of hospitals and healthcare providers.

Read the fine print: Look out for exclusions, waiting periods, and claim settlement procedures in the policy.

Consider add-on benefits: Group health insurance policies sometimes offer add-on benefits like maternity coverage, OPD expenses or critical illness protection. Evaluate if these align with the needs of your business.

While pondering how much group health insurance for a small business is worth, remember that its value far outweighs its cost. A comprehensive plan not only provides vital coverage for your workers but also contributes positively towards employee retention and job satisfaction.

Therefore, when purchasing group health insurance for small businesses in India, keep these points in mind to guarantee the well-being of your employees while ensuring efficient cost management for your business.

Questions Business Owners Should Ask While Buying Group Health Insurance Plans

1. What is your budget for insuring your employees?

Understanding the cost of group health insurance is pivotal. This will influence the quality of the plan you can provide and how much you or your employees will contribute to the premiums.

2. What are the benefits of the plan and do they fulfil your requirements?

Ensure the coverage provided by the group health insurance policy aligns with the needs of your employees. This might include pre- and post-hospitalisation, waiting period and coverage for their families.

3. Who will decide on the type of group health insurance? Will it solely be your decision or will you involve your employees in the process?

Employees input can help you make decisions that fit everyone’s needs.

4. How is the cost split?

Some organisations cover the entire cost of group health insurance, while others share it with their employees. Try to strike a balance to maintain both employee satisfaction and fiscal responsibility.

5. Is there a difference between an employee’s health insurance coverage requirement and a personal one?

Remember that individual health insurance might not always fulfil all requirements of your team.

When deciding on group health insurance for small business, remember to scrutinise the fine print in the policy, understand your budget constraints, consider employee preferences, and work with reputable insurance companies. Investing time and resources into securing an appropriate group health insurance is not only beneficial to your team but also crucial for your business growth.

Also, Read: 10 Questions to Ask Before Choosing a Right Group Health Insurance Plan

How Much Does Group Health Insurance Cost for Small Businesses?

The cost of group health insurance varies. Several factors come to play when assessing the premium for your corporate health insurance plan. Here are some criteria’s affecting the cost of group health insurance:

Company size and covered population: Insurance companies take the number of enrolled employees into consideration. Large businesses often get lower per-person rates compared to SMEs. However, even small business owners can find affordable group health insurance plans tailored to their needs.

Employee age and health condition: Generally, premiums are higher for older employees and those with pre-existing conditions due to an increased risk of claims.

Type of coverage: More comprehensive coverage typically means a higher premium. For example, a plan offering maternity coverage might cost more than a basic plan.

Location: Businesses located in cities with higher medical costs often face higher premiums. That means, if your business is in a tier 1 city, the premium for your group health insurance will likely be higher than a business which is setup in a tier 3 city.

In India, where healthcare costs can be hefty, having this kind of support can make a significant difference. Investing in robust health cover today can save you from considerable trouble tomorrow.

With numerous insurance companies offering different policies, finding the best one can seem daunting. But knowing what to look out for can help simplify your quest.

Best Group Health Insurance for Small Businesses

To simplify your task of researching group health insurance plans, the following is a list of the best insurance companies and plans to help you select a suitable one for your companies requirement:

1. Onsurity

Onsurity has emerged as a distinguished choice among start ups and SMEs due to its extensive coverage, customised benefits and inclusivity. The seamless, paperless process heightens the appeal, making Onsurity a preferred partner for small businesses aiming to enrich their employee benefits portfolio.

Onsurity’s key benefits and features for small businesses include:

Affordability: Plans start from just INR 49 per employee.
Flexibility: Cover teams with as few as 3 members.
Comprehensiveness: Services include patient hospitalisation, daycare treatment, pre- and post-hospitalisation expenses, room charges, operation theatre charges, ambulance cover, psychiatric illnesses, pre-existing conditions, diagnostic charges, nursing care and doctor fees
Convenience: Pay monthly, not annually with an easy onboarding process.
Inclusivity: Open to interns, freelancers, and blue-collar workers.

Onsurity is well known for providing customer satisfaction. Ankur Warikoo, one of their clients, has praised them for, ‘immaculate process and service orientation’.

Suggested Read: 10 Best Insurtech Companies in India

2. Aditya Birla General Insurance

Aditya Birla General Insurance stands out with its employee-centric policy. Their group health insurance includes health returns, an Active Health App, and the flexibility in selecting a healthcare provider, fostering a supportive atmosphere for your employees in times of need.

They have a unique feature wherein if an employee maintains good health, they receive rewards and are returned 30% of the premium paid on the health insurance policy.

3. Bajaj Allianz General Insurance

Bajaj Allianz General Insurance offers customised group health insurance plans that resonate with the specific needs of small businesses. These plans cover maternity costs, pre-existing medical conditions, operation theatre cost and even extend coverage for costs relating to organ transplants, dialysis, chemotherapy, and radiotherapy.

4. SBI General Insurance

SBI General Insurance’s group health insurance policy goes above and beyond the regular by covering up to 30 days pre and 60 days post-hospital expenses. It also waives off pre-policy medical tests up to 65 years of age, making it an inclusive choice for businesses with a diverse age group.

Conclusion

Choosing a group health insurance for small business isn’t just about ticking an obligatory box. It’s about providing employees a safety net, showing them that their health and well-being truly matter to you. The premium you pay towards group health insurance is an investment towards a healthier, more secure work environment.

As an employer, you shoulder an integral role in shaping the future of your employees and their families. In closure, opting for a comprehensive group health insurance plan is a choice of responsibility and compassion.

FAQs:

1. What is the minimum employees for group health insurance?

Typically, a business must have at least 20 employees to qualify for a group health insurance plan. However, the Insurance Regulatory and Development Authority of India (IRDAI) allows microinsurance plans for groups with a minimum of five members.

2. What is the best health insurance for small business owners?

The best health insurance for small business owners typically provides comprehensive coverage including both health and wellness. Each policy will vary so it’s key to review the policies thoroughly.

3. What is covered in group health insurance?

Group health insurance covers various medical expenses including outpatient care, hospitalisation costs, prescription medications and wellness services.

4. Who is eligible for group health insurance?

Eligibility for group health insurance typically extends to all full-time employees in a company and can often include their immediate family members as well.

5. Which group health insurance is best?

The best group health insurance is dependent on specific needs of your employees and the company’s budget. Consider factors like coverage options, waiting period and premium costs while choosing a plan.