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Corporate Health Insurance Know-hows

Introduction

Medical emergencies can cross anyone’s lives at any point in time and anywhere. These often land up unplanned and can cause a lot of financial upheavals. Corporate health insurance has, therefore, become a norm in most official scenarios.

Health insurance in India comes in several forms:

  • Vanilla Health Insurance
  • Critical Illness Insurance
  • Personal Accident Insurance

While these are usually limited to personal plans, corporates often prefer getting group health insurance plans to provide insurance coverage to their employees at a subsidized rate or free of cost.

What are corporate health plans, and what are the things you should know about them? We will discuss them all in this article.

What are Corporate Health Insurance Plans?

Corporate health plans are group insurance plans, especially curated to suffice the health insurance needs of the employees of an organization. These cover several aspects pertaining to the employees’ well-being and health such as accidents and financial losses.

In most cases, the employers bear the premium for the insurance policy and have their say on the coverage benefits and the sum insured. Sometimes, the employees may be asked to pay a subsidized sum. Most plans also allow them to choose from a range of optional coverages available for which they bear the additional costs involved.

While corporate insurance was not compulsory in India, the Insurance Regulatory and Development Authority of India (IRDAI) has mandated that health insurance is a must for all companies with active staff in the wake of the pandemic.

Types of Corporate Group Health Plans

Corporate group health plans are of primarily two types –

  • Contributory plan – where the group members or the employees bear a part of the premium to remain ensured
  • Non-contributory plan – where the employer bears the entire premium amount and the employees do not need to contribute to stay covered.

How Does it Work?

As mentioned above, a corporate health plan is a type of health insurance policy that does the job of providing optimum cover to employees.

  • In most cases, it provides a fixed insured amount for covering the illness or accident of employees. Most policies only cover hospitalization that exceeds 24 hours as the primary criterion.
  • These policies cover the spouse and children of the employees usually. Some plans can extend the cover to dependent parents as well.
  • Group corporate plans also come with an option to increase the sum insured in return for an increase in the premium outflow.

Why Do You Need a Corporate Health Plan?

In most cases, people are reluctant to buy health insurance plans until it is too late. Even though an increasing number of people are acknowledging its importance, they are yet to term it as one of their priorities.

Thankfully, corporate health plans are offered mandatorily to organizational employees, providing them with some cover against health emergencies.

Corporate health insurance plans are an excellent way to provide coverage for the workforce and are often provided to generate trust and a sense of loyalty. Following are the benefits on offer:

No medical check-up hassle

It doesn’t matter if the employee is a senior citizen or otherwise, these plans are provided without pre-medical check-ups. It is one of the key benefits of group health plans over regular health insurance, wherein the insured has to undertake a pre-medical test, compulsorily depending on several factors.

No waiting period

A regular health plan comes with a waiting period, ranging from 45 days to 4 years, depending on the contingencies. Corporate health insurance has no waiting period, and coverage is available to eligible employees from the day of policy activation.

Faster turnaround time

Corporate or group plans, such as group health insurance, group term life insurance, or group personal accident insurance, are often given a higher priority over individual plans. It enables those covered under group plans to have faster claim settlement or instant query redressal.

Pre-existing diseases

Pre-existing disease clauses are a part of most group health plans. It means that most corporate insurance ensures coverage despite having any pre-existing disease. Such a clause is especially beneficial for those who are nearing their retirement age or are bridled with several health issues.

Seamless access to family health insurance 

A family floater plan for two children, spouse and parents requires a significant periodic premium outflow. In contrast, having a corporate group health plan already covers up to five immediate members with no additional amount. It also enables seamless coverage to aged people, otherwise difficult with individual policies.

Issues With Corporate Group Health Insurance

Corporate medical plans have not gained their fair share of traction, and that has got a lot to do with how people perceive them. Like with most policies, these plans also have their share of disadvantages.

Limited policy tenure

Corporate group insurance coverage is limited to the term you stay with a particular employer. It means that the policy terminates when you exit the organization, and you will have to look for a new policy when you switch jobs or decide to do something else.

Limited coverage 

In most cases, the employer only provides limited coverage up to the extent of INR 5 lakh. Given the rise in health expenses, such a cover would only suffice 20% or so of the total costs.

Room rent cap

Also known as hospital room rent, the room rent cap is one of the primary bottlenecks of corporate health plans. Here, the limit is pre-defined, and policyholders will have to pay the difference if they want to opt for a higher tariff.

Cocclusion

In the modern-day scenario, corporate insurance is fast gaining traction. With benefits like zero waiting periods, no pre-medical check-up requirement, lower premium outflow, and more, most employers are happy offering it to their employees. So, if you want to ensure optimum security, a secondary individual plan that covers the shortcomings of the group health plans would be the best fit.

Despite a few disadvantages, such as limited coverage and policy tenure limitations, most individuals are happy having an additional policy to ensure optimum coverage, and group health insurance offers enough value to make it a good choice for employees.