Mon 12 Nov 2018 00:00:00 UTC
We often get asked for quotes for a “good group health cover” from companies. Its hard to answer this question unilaterally, without information about the company, such as its size, number of employees, age, growth, etc. So in this article, we try to shed some light on this by answering related questions:
• Should small businesses go for group health cover?
• Is group health cover really better than individual health cover?
• What factors should small businesses focus on when they decide to take health insurance?
If you are a small firm, then you will have very few employees. These employees are involved in multiple aspects of the business(much more than enterprises, where key decisions are often made in completely different regions), they are very important to the company. Therefore, employee retention, morale and productivity are especially important if you are a small company.
While Group covers provide better benefits than individual covers in general, there are ways for a company to customise the cover so that costs are optimised.
An important thing to note is that group health cover isn’t the same as retail health insurance for a group(such as employees and families). The fundamental benefits are much better in a group cover than in an individual one, as explained here.
In short, Group health cover has the option to remove waiting periods that exist in health insurance policies. This is an important benefit, as individual(non-group) health policies do not cover pre-existing conditions for 4 years, and have a whole host of conditions/illnesses that aren’t treated for the first 2 years.
Another issue is that group covers aren’t extended to include 3 generations in one policy. You can cover your spouse and kids, or you can cover your parents, but you cant cover all of them in one policy.
Because of the extra benefits, in some cases, especially for people less than 35 years old, there are some individual health insurance covers that are slightly cheaper than group health covers. However, the limitations and waiting periods mean that in most cases, these policies are free money to the insurer. By not covering pre-existing conditions and multiple common conditions for the first 2 years, insurers are able to limit their risk to just emergency hospitalisation, which is low risk for young people.
So yes, group health insurance offers much better benefits than individual health insurance, and also offers much more scope for flexibility and customization.
The first factor to consider would be the dependants you want to cover. Do you want to cover only employees; employees, spouse and kids; or employees, spouse, kids and parents.
Generally speaking, if you are taking a policy for the first time, it’s best to not include parents, to control costs. There is always the possibility of passing the premiums for parents to the employees, but not every employee may be willing, and this leads to a problem called adverse selection. IF less than 80% of your employees opt for adding parents, then insurers may decline or price really high.
If you have an existing cover in place, then you will be in a better position to absorb the added cost of including parents.
The second factor would be the age of your employees. If your company is full of young workers who are single, then covering employees(and/or their spouses and children) will be economical, as young people tend to have fewer dependants.
If you have employees across various ages(all the way upto 50+ years of age) then you should consider designation level customisation.
You can choose to add different coverage(sum insured, dependants covered) by designation, and also edit employee contribution(to premium). It is also possible to have certain employees take an extra cover if they feel like it, and have the extra premium borne by the employee.
There are many factors to consider when customising an Employee Mediclaim insurance(or group health insurance), in order to make the most of the cover, and keep your employees happy. However, it can also be confusing as business insurance products are complex.
This is why we have built a platform that allows automated customisation and management of policies, for businesses of all sizes. It also has multiple value added services thrown in, such as emergency hospital loans, medical check-ups and more. Try it out for free, or schedule a call with us now!