What is Group Health Insurance Policy and How Does it Work?

  • postauthorOnsurity Editorial
  • postdateFebruary 21, 2024
  • postreadtime13 min read
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Group health insurance policy

Imagine running a successful business with employees who form the backbone of your organisation. Their health and well-being are vital because without your employees it’s impossible to keep things running smoothly. As an employer, one way of ensuring your employees’ well-being and peace of mind is by offering a group health insurance policy.

This is a bespoke policy tailored solely for your team and their families or dependents. It’s a proactive step towards fostering a culture of care within your business, demonstrating that you care for more than just the bottom line.

However, understanding this type of insurance and weighing its advantages and disadvantages is crucial to making the most informed decision.

What is a group health insurance policy?

A group health insurance plan, as the name implies, is a type of health insurance coverage provided by general insurance companies that is designed for groups – typically, organisations.

This policy protects the insured person against medical expenses, ranging from those incurred for basic health checks to surgeries and hospitalisation. Among large companies in India, these policies are favoured as they’re typically more cost-effective per employee than are individual plans.

The essence of a group health insurance policy for employees is its inclusivity. When individuals apply for insurance independently, insurance companies normally require comprehensive medical checks and underwriting to assess their risk factors.

However, with group health insurance, this risk is spread over many individuals. This allows coverage to be more easily approved without stringent checks, as the likelihood of everyone in the group claiming insurance at once is statistically low. This unique feature of group health insurance helps safeguard your employees against the financial strain of exorbitant medical expenses.

With individual medical screenings and underwriting often waived, virtually all employees get covered, despite any pre-existing medical conditions. This aspect is especially critical in India, where the cost of healthcare can be prohibitively high for many.

Another advantage of buying a group health insurance plan is its flexibility. Depending on your organisation’s needs and budget health cover plans can be tailored to best fit your employees’ needs. Further, extra benefits might be incorporated by the insurance company, such as discounted medicines or teleconsultations.

However, the downside to group health insurance policies lies in their lack of portability. That is, when an employee leaves the company, their coverage ends too. Despite its constraints though, many companies see it as a great solution to provide affordable health coverage for their employees.

Also, Read: Types of Health Insurance

Why group health insurance policies are essential for businesses?

Whether you’re steering a fledgling startup or helming an established corporation, a group health insurance policy can be a game-changer.

1. Startups and small businesses:

For startups and small businesses, offering a group health insurance policy for employees is more than just a strategic move. It lays the foundation of trust, establishing you as an organisation that truly cares for its workforce.

Not only does it attract fresh talent, but it also significantly enhances employee retention rates. Moreover, it’s a savvy financial decision, helping companies yield considerable tax savings in the long run.

2. Mid-size company or agency:

As your business expands into a mid-size company or agency, a group health insurance policy becomes more than just an employee perk. It’s about maintaining high morale and productivity by alleviating employees’ financial stress associated with medical expenses. Ensuring their – and in many cases, their families’ – health is well covered gives them one less thing to worry about.

3. Large corporations and established organisations:

For large corporations and established organisations, having a group health insurance plan isn’t just expected but mandatory to uphold the company’s reputation.

Offering comprehensive coverage not only affects how potential hires perceive your company but also reinforces relationships with current employees by fostering a sense of security.

Regardless of your business size or industry, consider enrolling for a group health insurance policy India’s insurance companies offer. This embodies your commitment towards the welfare of your employees, making your organisation not just a great place to work at but also a nurturing ground where your employees feel valued and secure.

Related Read: Maternity Health Insurance

Benefits of group health insurance policy

A group health insurance policy is a comprehensive solution that offers multiple benefits, both for employers and for employees. It’s essentially a win-win, providing equal access to quality healthcare without the worry of soaring medical costs.

benefits of group health insurance policy

From an employer’s perspective, a group health insurance policy for employees can:

  • Attract and retain top talent: Offering healthcare benefits shows your organisation’s dedication towards employee welfare. This fosters loyalty and can be a deciding factor for potential employees during job selection.
  • Provide value for money and tax benefits: Besides providing coverage, the premiums paid towards an employee group health insurance policy offer tax advantages.
  • Boost focus and job satisfaction: Employees feel valued, leading to increased productivity.

As an employee, a group health insurance policy in India offers:

  • Smooth and easy claims: Streamlining the claims process ensures a hassle-free experience for employees. The simpler process helps minimise the challenges associated with complex settlements. By enabling the routing of bills through the employer, you alleviate the burden on individual employees, consequently making the entire claims procedure smoother and more accessible.
  • Family coverage at no extra cost: Depending on the chosen plan, the employer may allow the policy holder to include family members or dependents, extending these benefits to loved ones without bearing additional costs.

When considering the advantages and disadvantages of buying a group health insurance policy, it becomes evident that these plans serve as an effective way to safeguard against unpredictable medical expenses while fostering a nurturing work environment.

Exploring what is a group health insurance policy and the group health insurance cost will equip you with insightful information to make informed decisions about your health coverage options.

Quick Read: ESI or Group Health Insurance: Which is Best for Employees?

Key features of group health insurance policy

One of the key aspects of a group health insurance policy is the cashless claim process. In an unanticipated event of hospitalisation, your employees can avail of cashless treatment at any network hospital without worrying about immediate payment. This cashless facility comes as a lifeline during medical emergencies, providing peace of mind when it’s needed the most.

Another significant component of a group medical insurance plan is health insurance coverage for both pre-and post-hospitalisation expenses.

Under this umbrella, costs incurred before hospitalisation, like diagnostic tests, and those incurred after discharge, such as follow-up check-ups and medications, are taken care of. This comprehensive health cover ensures that healthcare costs don’t eat into your employees’ savings.

A group health insurance policy for employees also includes proactive measures to help maintain their health. Added health benefits may encompass the following:

  • Outpatient consultations
  • Routine health check-ups
  • Mental wellness support

These additional perks can promote healthier habits among your employees, making them more productive and reducing the number of sick days.

Also, Read: Difference Between Network and Non-network Hospitals

Common inclusions of a group health insurance policy

A group health insurance policy for employees covers various aspects of healthcare that contribute to the productivity and satisfaction of your team.

The common inclusions of a group health insurance policy typically are:

  • In-patient hospitalisation: This covers expenses incurred during hospital stays.
  • Disease expenses: From minor ailments to severe conditions and critical illness, your employee’s treatment costs are covered.
  • Family inclusion: Employees of a company (i.e. policyholders) can add their spouse and children (dependents) under the coverage.

Furthermore, this type of policy often includes benefits like cashless, hassle-free treatment, and tax advantages. Unique features like coverage for daycare procedures and ambulance charges add value to the policy. Some plans even account for pre-existing diseases, considering the complete health history of your staff.

Common exclusions of a group health insurance policy

As an employer, understanding the exclusions of a group health insurance policy is as crucial as understanding its inclusions. Knowing these details largely affects your perceptions of the advantages and disadvantages of buying a group medical insurance policy.

In India, common exclusions of a group health insurance policy are as follows:

  • Non-medical expenses
  • Outpatient department (OPD) treatment
  • Cosmetic treatments
  • Treatments related to obesity and weight loss
  • Sex change operations
  • Intentional injuries

In some instances, specific medical procedures could be excluded. Also, injuries caused intentionally or through attempted suicide are not covered. Furthermore, de-addiction treatment for drugs and alcohol, and treatments related to AIDS and HIV are typically not part of the coverage.

Never assume what’s covered and what’s not in a group health insurance policy. Examine your employee group health insurance policy thoroughly before deciding if the policy for your employees fits your organisation’s needs.

Quick Read: What is Employer Employee Insurance?

Comparison of group health insurance with individual health insurance

In India, those seeking health coverage have two primary options: group health insurance policy or individual health insurance plans. As an employer, it’s essential to grasp the differences between the two to make a sound decision.

Whereas a group health insurance policy for employees is a comprehensive cover purchased by organisations to provide medical expense coverage for a defined group of people – usually, employees and their dependents, individual health insurance caters solely to one person or family. This type of policy is paid for directly by the individual and isn’t tied to employment.

Here are some of the differences between a group health insurance policy and individual health insurance policies:

  • Cost: A group health insurance plan in India provides more cost-effective health insurance coverage, as the premium is usually shared or entirely covered by the employer. Employees enjoy more benefits at a lower cost than with individual health insurance coverage.
  • Flexibility: Choosing individual health insurance gives you more control over how your policy works and what it covers, allowing you to customise your coverage. However, you’ll need to pay a higher premium directly from your own funds. So, while you can customise your coverage, it may cost you more upfront.
  • Tied to Employment: The downside of an employee group health insurance policy is that the health insurance coverage ends if the employment relationship ends.

There are both advantages and disadvantages to buying a group health insurance plan or individual cover. It’s about weighing the pros and cons and deciding what suits your needs – whether you’re an employee in India reviewing what is a group health insurance policy, or an employer considering the cost and benefits.

Also, Read: Difference Between Life Insurance and Health Insurance

Factors to consider when choosing a group health insurance policy

Choosing a corporate health insurance policy for your employees is as straightforward as putting together building blocks. These policies are designed to seamlessly align with the specific needs of your organisation and, most importantly, your employees.

factors to consider when choosing group health insurance policy

When choosing group health insurance, several factors come into play:

  • Size of the group: Larger groups may qualify for better premium rates.
  • Average age of the employees: Younger groups often attract lower premiums, as individuals in these groups are less likely to get hospitalised and, therefore, less likely to file claims.
  • Occupation: Some occupations are associated with higher risks, for example, jobs in construction, firefighting, or heavy machinery operation, and thus may incur higher premiums because of a higher likelihood of workplace accidents and associated health risks.
  • Add-on features: Extra benefits may increase cost but also enhance value over and above the sum insured.
  • Co-pay options: Copayment (Co-pay) is a fixed amount that individuals pay out of pocket for covered services. By choosing to co-pay, employees contribute to their healthcare expenses, which, in turn, helps reduce the overall premium amount.
  • History of claim settlement: A positive history of claim settlement indicates a reliable and efficient process for claim settlement, ensuring a smooth experience for policy holders.
  • Wellness and preventive features: Strategies that promote healthier lifestyles often result in lower health costs overall.
  • Geographical coverage: Ensure the policy covers areas where your employees reside.

Understanding the group health insurance policy meaning, as well as its advantages and disadvantages, can be the difference between providing adequate coverage and leaving gaps that could lead to financial difficulty for your employees.

In India, the cost can vary dramatically, depending on the factors listed above. By considering all these aspects, you’ll be well-equipped to choose an employee group health insurance policy offering comprehensive coverage at a competitive price. Remember, the goal is not just financial protection, but also promoting a healthy, happy workforce.

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

How to buy the best group health insurance policy in India?

Buying a group health insurance policy is imperative for businesses to safeguard their most valuable asset – their employees. But how do you ensure you’re getting the best policy? Here’s a simple guide.

First, researching and comparing different insurance providers online can give you a fair idea of what’s available. Consider the group health insurance policy meaning – it should address your employees’ healthcare needs, cater to their demographics, and fit within your budget.

Once you’ve zeroed in on a provider, follow the steps below:

  • Visit the official website.
  • Select your preferred group health insurance plan and the sum insured based on eligibility.
  • Provide essential details about your company and workforce.
  • Customise the plan as required.
  • Review the policy terms and quote carefully.
  • Make an online payment to finalise the purchase.

If you prefer an offline approach, here’s how you go about the process:

  • Approach your chosen insurer.
  • Set up a meeting to discuss requirements.
  • Fill out the application form.
  • Customise the plan as necessary with the help of a representative.
  • Review the proposal carefully ensuring it meets your needs.
  • Pay the premium amount to complete the process and obtain your policy documents.

Also, Read: Group Health Insurance Terms You Must Know

How much does a group insurance policy cost?

The cost of a group insurance policy, particularly a group health insurance policy for employees, fluctuates broadly based on a multitude of factors. This is not a simple one-size-fits-all scenario.

Group health insurance policy cost is influenced by the following aspects:

  • Type of coverage: Comprehensive plans with features like wellness benefits, pre- and post-hospitalisation expenses tend to cost more.
  • Employee details: The age and health status of your employees play a significant role in determining the premium.
  • Location: Rates differ geographically, with premiums usually being higher in metro cities than in tier-II cities.
  • Company size: The higher the number of employees of the company you cover, the higher the premium and vice versa.

Choosing a group health insurance policy for your organisation’s employees can appear daunting, but understanding what drives these costs can help you make an informed decision. Despite the cost, the peace of mind that can come with knowing that one’s medical needs will be taken care of is priceless.

Related Read: How is Group Health Insurance Premium Calculated?

Why choose Onsurity’s group health insurance for employees?

In today’s world, a comprehensive group health insurance policy has become more of a necessity than a luxury. Onsurity’s Group Health Insurance for Employees is a leading choice in India among SMEs, startups, and various other organisations. Here’s why:

1. Comprehensive Coverage: This policy provides inclusive coverage catering to in-patient hospitalisation, daycare treatment, as well as pre-and post-hospitalisation expenses among other things. Additionally, COVID-19-related expenses are covered.

2. Customised Wellness Benefits: Your team’s needs are unique. Recognising this, Onsurity offers not just health coverage but also life insurance and personal accident coverage under one membership.

3. Exciting Discounts: Your employees can avail of up to 20% discount on medicines and up to 65% on diagnostic tests with a policy from Onsurity!

4. Teleconsultation and Claims Assistance: Onsurity offers a package that includes free doctor teleconsultations and dedicated end-to-end claims assistance.

5.No Waiting Period: Unlike some policies that impose a waiting period, the benefits with Onsurity start from day 1 itself.

6. Extended Coverage: Regardless of the type of employment contract, every employee under your banner is eligible for all of the benefits that Onsurity has to offer.

7. Personal Purchase: Employees have the option to purchase healthcare benefits for their loved ones directly through the Super App, even if they are not initially included in the employer-sponsored plan. This extends to covering in-laws, siblings, and LGBTQIA+ partners, ensuring a comprehensive and inclusive approach to healthcare coverage.

Known for its 100% paperless process and being the highest-rated healthcare partner, Onsurity is trusted by over 5000 companies. It is revolutionising group health insurance policy for employees in India by offering tailor-made plans for varied requirements. The cost isn’t prohibitive either. No wonder it’s the chosen one among employee group health insurance policies in India.

Conclusion

The group health insurance policy stands as a pivotal element in employee benefits, offering financial security and peace of mind. These plans are monitored and regulated by IRDAI. A group health policy is about sharing risks across a large pool, ensuring cost-effectiveness.

In India, this concept has garnered a significant following because of its mutual benefits, making the group health insurance policy for employees in India a popular choice.

However, the advantages and disadvantages of buying a group health insurance policy should be weighed thoroughly. Remember, there’s no one-size-fits-all policy. Your organisation must choose a plan that addresses your unique needs and circumstances.

To be a part of the digital healthcare revolution, visit the Onsurity website and explore our tailored options for companies of all sizes.

FAQs:

1. Which is the best company for group health insurance?
The “best” insurer depends on the specific needs of your organisation. Look for a reliable company that offers comprehensive coverage and excellent customer service.
2. What are the benefits of a group mediclaim policy (GMC)?
Group mediclaim policy offers healthcare to all members at a reduced cost, covers pre-and post-hospitalisation expenses, and typically includes a no-waiting period for new members.
3. Who can be covered under a group health insurance policy?
A group health insurance policy can cover employees, their spouses, dependent children, and in some cases, retired employees.
4. Who should buy a group health insurance plan?
Any employer who wants to provide health benefits to their staff– from small startups to large corporations– should consider purchasing a group health insurance plan.
5. How to choose the best group health insurance policy in India?
Prioritise features like coverage amount, network hospitals, claim settlement ratio, inclusion of pre-existing conditions, and customer service while selecting a plan.
6. How is group health insurance different from Individual Health Insurance?
A group health insurance plan covers a group under one master policy and tends to be more affordable, while individual health insurance is tailored to one person’s needs but may cost more.
7. What does a group health insurance policy typically cover?
These policies usually cover hospitalisation, maternity care, pre-and post-hospitalisation expenses, daycare procedures, and sometimes wellness programs.
8. How do pre-existing conditions affect coverage in a group health insurance policy?
In most cases, group policies cover pre-existing conditions immediately upon enrollment without any waiting period.
9. What factors affect the cost of a group health insurance policy?
Cost factors include group size, type of coverage chosen, room rent caps (if any), age and health status of members, geographic location, and industry risk assessment.
10. What are the tax benefits of providing group health insurance to employees?

Providing group health insurance to employees in India also has tax advantages. Companies can report this as a business expense. This benefit for employees is eligible for tax benefits in accordance with the Indian Income Tax Act, 1961.

11. What are the typical exclusions in a group health insurance policy?

Group health insurance often excludes pre-existing conditions, cosmetic or aesthetic treatments, and sometimes specific surgeries. Maternity benefits may also be excluded sometimes, basis the plan opted for by the employer.

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