Group Health Insurance: Medical Insurance for Employees

The backbone of a good organisation is the stability and sense of security it can provide its members or employees. If your employees feel valued, the workplace is more productive. A Group Health Insurance policy is one offering you can provide so that your employees enjoy financial security for themselves and their families during medical emergencies.

Group Health Insurance is a type of blanket health coverage through which you can ensure your employees receive quality healthcare without the burden of high medical costs. A Group Health policy protects employees from unexpected medical expenses that could otherwise dent their savings.Through Group Health Insurance, companies can give their employees access to a wide range of healthcare services, including hospitalisation, diagnostic tests, consultations, and medication if needed.Group Health Insurance pools the risk among the group, enabling affordable premiums and broader coverage. It promotes employee well-being, boosts productivity, and demonstrates your commitment to their health and welfare.

Adequate health insurance has become especially important in the last several years. Medical inflation remains one of the highest in India, and the prevalence of lifestyle and chronic diseases, which could lead to hospitalisations and prolonged treatment, is rising.But the 2019 global pandemic underlined the importance of health insurance . To that extent, the government made it mandatory for companies to provide Group Health Insurance to their employees.

As an employer, offering Group Health Insurance to your employees provides several benefits. These include:

1. Employee retention: A good insurance policy means your employees have more reasons to stay with your company.
2. Operational efficiency: Employees find it easier to maintain their coverage under Group Health Insurance, as the insurance company treats the company as a single entity.
3. Cost savings: Since Group Health policies cover a large group of individuals, the premium a company pays per employee is lower than what an individual employee would pay.
4. Employee satisfaction: Offering comprehensive Group Insurance policies demonstrates your interest in the well-being of your employees. Such employee benefits increase overall employee satisfaction.

Group Health Insurance policies can offer several advantages if you are an employee. It is also important to note some factors that can affect your cover:

• Immediate coverage Individual Health Insurance policies typically have a waiting period, particularly in case of pre-existing diseases. After buying a policy, you need to wait for a certain period before making a claim. Though it varies across insurers, the waiting period ranges from 2 to 4 years. However, in Group Health Insurance, the coverage kicks in almost immediately.
• More inclusive plan Group Health Insurance policies typically cover a wider range of diseases, including pre-existing conditions. These plans also usually have lesser exclusions or limitations. There is also usually no requirement for any medical tests to avail of the benefits of the cover.
• Includes family members Another benefit of Group Medical Insurance is that it usually allows you to add family members to the coverage. Depending on your employer's plan, you can include your spouse, dependent parents or in-laws, and dependent children. You can also check if your employer allows you to pay an additional charge to add members to the plan if it does not cover some of them.
• Maternity facility Group Health Insurance can also benefit you by covering maternity expenses if you are a woman planning a family. It also covers related medical treatment for a newborn baby up to 90 days from birth.
• Hospital cashless benefit Most big Group Health Insurance companies in India have tie-ups with hospitals to give you a seamless experience during bill settlements. So, your medical bills are settled directly between these network hospitals and the insurance company. You do not have to worry about paying for your treatment or your hospitalisation from your pocket during a medical emergency.
• OPD treatment Many Group Medical Insurance plans offer coverage for outpatient treatment, which includes treatment in a hospital or daycare facility without being hospitalised. Make sure you read the policy terms and conditions before applying for compensation.
• Preventive healthcare and benefits Group Health Insurance companies also offer plans that include preventive healthcare initiatives to maintain a healthy lifestyle. For example, you get discounted laboratory tests, OPD consultation, online doctor consultation, full-body check-ups at home, mental health illness programs, personalised meditation sessions, dental expenses, and other advantages.

If you are an employee and a part of your employer's Group Health Insurance plan , you must be mindful of the following factors:

• Applicability of the policy: The Group Health Insurance policy continues to apply for the period you are associated with the organisation. But the policy will be cancelled when you leave the organisation. While some insurers may allow you to convert your Group plan into an individual plan, the premium can be more expensive than under the Group Insurance plan.
• Lack of flexibility: You cannot select a plan and its benefits individually as an employee. The company chooses a plan that works best for all its employees. This differs from an individual health plan, where you can add or remove any feature. Thus, you cannot discontinue one plan and switch to another insurer in the case of Group Medical Insurance.
• No Claim Bonus: Group Insurance policies do not offer a no-claim bonus, unlike individual health plans. In an individual health plan, if you do not make any claims in the previous year during the policy term, you get additional benefits in the form of discounts on the premium applicable during your renewal. However, your employer pays the premium on your behalf in Group Health Insurance, so you cannot avail of a no-claim bonus.

The following table provides a general comparison between Group Health Insurance and Individual Health Insurance. Specific terms and conditions of these policies may vary depending on the policy and regulations.

As an employer, you can claim tax benefits on premium payments for your Group Health Insurance plan. You can avail of the tax benefits under Section 37 of the Income Tax Act. So, it is not just beneficial for your employees but also boosts your savings.

If you are an employee of an organisation that offers Group Health Insurance coverage, you usually cannot claim tax benefits, as your employer pays the premium amount.However, you can claim tax benefits under Section 80D in certain cases, such as:

• If you are paying for an additional top-up plan over and above your employer's Group Health coverage. You can claim a deduction under Section 80D only for the amount you pay out of your pocket.
• If you are paying for coverage of family members, such as your parents or in-laws, if they are not already covered in your Group Health Policy. In this case, you can only claim a deduction for the premium amount you pay.
• As per current tax rules, you can claim a maximum deduction of ₹25,000 under Section 80D if you are under 60 years. However, if you are a senior citizen, you can claim a deduction of up to ₹50,000.
• You should note that these deductions only apply under the old tax regime, not the new one.

• Hospitalisation expenses Group Health Insurance typically covers the expenses incurred during hospitalisation, including room charges, doctor's fees, nursing charges, and medical procedures.
• Pre-existing conditions Group Health Insurance plans may cover pre-existing medical conditions from day one or after a waiting period.
• Pre-and post-hospitalisation expenses These often include coverage for medical expenses that you incur before and after hospitalisation, such as diagnostic tests, consultations, and medications.
• Ambulance charges Your policy may cover road ambulance charges incurred for emergency transportation to the hospital.
• Maternity benefits Some Group Health Insurance policies include coverage for maternity-related expenses, including prenatal and postnatal care, delivery, and newborn baby cover.
• Alternative treatments Some Group Health policies may also cover alternative treatments like Ayurveda, Homeopathy, and Unani.
• OPD expenses Some plans offer coverage for outpatient department (OPD) expenses, including doctor consultations, diagnostic tests, and medications.
• Wellness programs Group Health Insurance plans may provide access to wellness programs, preventive health check-ups, and health management services.
• Organ transplants Some Group Health Insurance policies may offer coverage for organ transplant surgeries and associated expenses.
• Daycare procedures Group Health Insurance plans may cover specified daycare procedures that do not require 24-hour hospitalisation.

• Medical conditions caused by alcohol and smoking Group Health Insurance typically excludes coverage for diseases caused by excessive smoking, drinking, or drug abuse, such as lung diseases and respiratory problems.
• Cosmetic treatments Procedures undertaken for cosmetic purposes, such as Botox, derma fillers, chemical peels, and plastic surgeries, are generally not covered. However, if an accident causes the insured to suffer facial damage, the policy may cover cosmetic treatments.
• Self-inflicted Injuries Treatment expenses resulting from self-harm activities, including suicide attempts, are typically not covered.
• Dental, vision, and hearing Some Group Health Insurance plans may exclude coverage for dental, vision, and hearing treatments unless required due to an accident.
• Abortion and infertility treatments While group health insurance may cover maternity and newborn expenses after a waiting period, it generally does not cover infertility treatments and abortion.

Also read: How are Group and Individual Health Insurance different?

You can avail of Group Health Insurance if you own or manage any of the following:

• Large corporation or multinational company
• Small and medium-sized enterprises (SME)
• Non-profit organisation or charitable institution
• Government entity or PSU
• Educational institutions such as schools, college, or university
• Professional association or trade union
• Cooperative society or community group
• Startup or entrepreneurial venture
• Religious institution or healthcare provider

When you want to purchase Group Health Insurance, you must submit the following documents:1. Proposal form2. Employee data3. Know Your Customer (KYC) documents4. Financial documentsThe list of documents may vary depending on the insurance company and your organisation's profile.

As an employee, you must remember a few documents to submit when you raise a claim under the Group Health Insurance Policy.You have to submit valid original documents. Make sure to keep at least three copies of all your documents, as you are required to submit the original documents to the insurance company. You may need your spare set of copies in case you are planning to file a second claim with your individual policy as well.

• Claim Form You must fill and sign the claim form provided by the insurance company.
• Health Insurance ID Card Your Health insurance ID card or policy document issued by the insurance company.
• Medical bills and invoices Save your original bills and invoices from the hospital, which you will have to submit with your claim form when filing your claim.
• Medical reports and prescriptions Save your medical reports, discharge summary, and prescriptions from the treating doctor.
• Diagnostic reports Save your original reports of medical tests, scans, or investigations supporting the diagnosis.
• Pharmacy receipts Keep your original medicines and pharmacy bill receipts.

• Step 1 Notify your insurance company about the medical treatment or hospitalisation within the specified timeframe.
• Step 2 Obtain a claim form from the insurance company, either by downloading it from their website or requesting it from customer service.
• Step 3 Fill out the claim form with all the necessary details, including policyholder information, treatment details, and medical provider details.
• Step 4 Gather all the required documents specified by the insurance company, such as medical bills, invoices, medical reports, prescriptions, and diagnostic reports.
• Step 5 Submit the filled claim form and supporting documents to the insurance company, either physically or through online mode like email or an online claim portal.

Following is a list of frequently used insurance terms. A basic understanding of these terms will significantly assist you in understanding insurance-related matters. The insights will enable you to make better decisions to positively impact you and your family in the present and future.

• Group Insurance policy An insurance policy covers a group of individuals, typically employees of your company or members of a group, NGO, or club.
• Master policy The main policy that covers the group and is issued to the organisation or employer.
• Insured members Individuals who are part of the group and covered under the Group Insurance policy.
• Dependent dependent is a spouse or child dependent on the primary insured client for financial support.
• Premium The amount that the master policyholder pays to the insurance provider for coverage.
• Eligibility criteria The conditions individuals must meet to be eligible for coverage under the group policy.
• Waiting period The specified period that individuals must wait before certain benefits become effective.
• Coverage limitations Restrictions or exclusions on specific types of coverage or conditions.
• Network Hospitals Hospitals with a tie-up with the insurance company, allowing for cashless hospitalisation.
• Co-payment A percentage of the medical expenses that the insured person needs to bear.
• Portability The ability for insured members to transfer their coverage to another policy or employer.
• Claim process The procedure for filing and processing claims to reimburse covered expenses.
• Renewability: The ability to renew the policy annually without restrictions.

Also Read: Do You Really Have Enough Workplace Health Insurance?

• On 1 April 2020, the IRDAI made it mandatory for companies and organisations to have medical insurance coverage for their employees.
• A Group Insurance policy provides medical coverage to a group of individuals or employees of your company. Such a plan offers employees and their families comprehensive healthcare coverage.
• If you are an employee, you do not have to pay the premium of a Group Health Policy provided by your employer.
• If you are an employer, you can claim tax benefits Under Section 37 of the Income Tax Act for the Group Health policy you offer your employees.