An overview of group health insurance plans in India
Health insurance has become a necessity in today’s age and time. Illnesses are on the rise as lifestyle diseases and infections are increasing. Along with the rising incidence of illnesses, medical costs are also rising. In the face of these rising costs, affording quality healthcare has become difficult. Many individuals understand this fact and so a health insurance plan is quite popular. In fact, groups try and avail a group health insurance policy for their members so that the members can enjoy health insurance coverage at affordable rates.
What is group health insurance?
Group health insurance plans are those which provide coverage to a group of individuals who are a part of a recognised group. A single policy is issued in the name of the group and the policy is called the Master Policy. All the members of the group are then covered under the policy.
Features of group health insurance plans:
Group insurance scheme are categorised with the following unique features –
- The policy is available to those groups which are already in existence for a purpose. If a group is created only for the purpose of buying a group mediclaim policy, such a group would not be covered.
- The group should have a minimum number of members to be eligible for a group health insurance plan. This requirement of minimum members varies across different plans. Usually, most group health insurance plans require a minimum membership of 20 or 25 individuals.
- The policy is issued for one year. If the group wants to enjoy continued coverage, the policy should be renewed every year.
- Health insurance companies provide coverage up to a limit. Very high coverage levels are not allowed. This is because of the fact that the company does not underwrite individual health risk of the covered members. The policy is issued based on the nature and composition of the group.
- The premium depends on a lot of factors. The primary factors include the size of the group, type of group, the average age of the covered members, the sum insured and additional coverage options if selected.
- Premiums can be paid by the group itself or by its members. Alternatively, the premium can also be paid partially by the group and partially by the members. The insurance company, however, collects a single premium from the group irrespective of who pays it.
- A claim by one member does not affect the coverage of other members.
- Cashless claims can be availed if the insured member avails treatments at a hospital which is tied up with the insurance company.
How does group health insurance plans work?
The working of a group health insurance policy is quite simple. Here are the steps showing how group mediclaim policies usually work –
- A group approaches an insurance company and proposes to buy its group health insurance policy
- The company accepts the proposal for insurance and underwrites the medical risk of the group
- The sum insured is agreed upon and the insurance company fixes the premium payable for the plan
- If the group is satisfied with the premium charged by the company, it can pay the premium and get the policy issued
- Once issued, the policy runs for one year
- During the year, if any member faces a claim, he informs the health insurance company.
- The company verifies the claim and settles it
- If the claimant’s sum insured is remaining after the claim, the coverage would continue up to the remaining sum insured
- Coverage for other members would not be affected. It would run till the term of the policy
- Once the coverage duration ends, the group can propose a renewal of the policy
- On renewal, the policy is again underwritten based on the claim experience in the last year
- If the claim experience is good, the company might offer a premium discount when the policy is renewed.
Which groups can buy group health insurance plans?
Eligible groups which can buy group insurance scheme include the following –
- Employer-employee groups where the employer buys coverage for its employees
- Trade unions where the union buys coverage for its labourers/members
- Clubs where the club buys insurance for its members
- Associations where the association buys insurance for its members
- Banks where banks buy insurance for their account holders/customers
A group mediclaim policy can also be bought by the Government of India for covering a targeted population for their welfare like Chief Minister’s Group Mediclaim Insurance Policy, Group Insurance Plan for all Central/State Government Employees, etc.
Coverage and exclusions under group health insurance plans:
The exact coverage features of group health insurance plans depend on the plan in question. Different plans have different coverage structure. However, the exclusions are more or less the same across all plans.
Here is a list of the most common inclusions and exclusions under group health insurance plans:
List of most common Inclusions under group health insurance plans:
- Hospitalisation expenses which would include the following –
- Room rent
- ICU room charges
- Nurse’s fee
- Doctor’s fee
- Anaesthetist’s fee
- Surgeon’s fee
- Operation costs
- Charges for blood, medicine, oxygen, etc.
- Cost of ambulance
- Daycare procedures
- Organ donor costs
- Expenses incurred before and after hospitalisation
- Domiciliary treatments, etc.
List of most common exclusions under group health insurance plans:
- Pre-existing illnesses are covered after a waiting period. This period can be between 1 to 4 years
- Cosmetic treatments
- Maternity costs, unless otherwise covered
- HIV/AIDS infection or any other STD
- Mental disorders
- Congenital defects or illnesses, etc.
Individual health insurance v/s group health insurance plans:
Here are the main points of difference between individual and group insurance scheme –
|Point of difference||Individual health insurance||Group health insurance|
|Individuals covered||The proposer or the proposer, spouse, dependent children and dependent parents||Members of the group. Coverage can also be taken for dependents by paying an additional premium|
|Sum insured||Any level of sum insured can be chosen based on affordability and coverage requirements||There is a limit up to which the sum insured is available|
|Premiums||Premiums are higher than group mediclaim policies||Premiums are quite low and easily affordable|
|Coverage benefits||Individual plans come with a host of coverage features which can also be customised to suit one’s coverage requirements||The coverage benefits are limited|
|Coverage tenure||These plans are renewable lifelong without any maximum cover ceasing age||Group health plans allow coverage only till the member is a part of the group. There might also be a maximum coverage age up to which coverage would be available|
|Pre-policy health check-ups||Might be required depending on the age of the insured and sum insured||Not required|
Advantages and disadvantages of group health insurance plans:
Group insurance scheme has both advantages as well as disadvantages. Let’s understand the pros and cons of the policy –
List of most common advantages of group health insurance plans:
- The policy allows affordable health insurance coverage to individuals
- If the group pays the premium, individuals can enjoy free coverage
- The policy helps groups create a sense of belonging and affiliation in the minds of its members
- Additional coverage benefits can be taken under the policy for a wider scope of coverage
- Dependents of the members can also be allowed coverage
- An organisation buying the policy for its employees and paying the premium can claim the premium paid to be a business expense. This would reduce the income from business and help in saving tax
List of most common disadvantages of group health insurance plans:
- There is a very limited scope of coverage under group health insurance plans
- The sum insured is limited which might prove insufficient for covering the high medical costs
- Coverage is available only till the member is affiliated with the group
- There is no lifelong coverage under the policy
- The coverage cannot be customised as per the coverage requirement of the member
Popular group health plans in the market:
Here are some of the popular group insurance schemes available in the market today –
|Name of the policy||Salient features|
|HDFC Ergo Group Medical Insurance||· Domiciliary treatments and daycare treatments are covered
· There are a range of optional coverage benefits which can be selected for enhancing the coverage
|Star Classic Group Health Insurance||· A daily allowance is paid as patient care for availing the services of an attendant
· Hospital cash allowance benefit is available as an add-on
|ICICI Lombard Group Health Insurance Policy||· Dental expenses, AYUSH treatments, critical illness cover, etc. can be availed as optional coverage benefits
· Coverage up to 95 years of age is available
· Lifetime renewals are allowed
A group health insurance policy is a good way to ensure health insurance coverage at affordable premiums. However, you should understand the different aspects of group health insurance plans before buying. Also, compare the available plans to ensure a plan which has the best coverage benefits at the lowest premium rates.
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Courtesy Article: Supramind / september 27, 2019 mintpro.in