Know How the Group Health Insurance Works
Group health insurance is the health policy that is bought by the employer and offered to the employees and their eligible family members. The employer and the employees share the cost of the premium. The employer chooses the plans for the employees.
When choosing the group insurance, employers must contribute a minimum percentage of the plan premium. It is one of the beneficial perks offered by employers. There are plans where the employers contribute to the plans, in full. This is, however, depends on the employer and the organization.
How it works
Many individuals cannot afford a decent health insurance plan, and the group health insurance plans offered by the employers are cheaper. This lets them get covered for various illnesses from a wide network of providers. Many people are under the assumption that group insurance offered by employers is not sufficient. On the contrary, one has to understand that the risk is covered for a huge group, where the insurer has a lower risk.
For instance, in a company of 2000 people, only 50 to 60 may use the insurance per month for simple ailments, and 10 to 20 per year for serious ailments. But the premium of 2000 people is guaranteed per year to the insurer. So, the risk is spread over a group rather than a single person. The insurance company does this by analysing the risk factor of every member listed in the plan. The risk factor of everyone is merged to come up with the premium for the entire group per year.
What to expect
Every company that has more than 50 full-time employees must offer group health insurance to the employees. The plans include the following benefits:
- Hospitalization: Coverage for hospitalization, room charges, doctor visits, nursing charges are covered. A few insurance plans also offer 30 days pre-hospitalization cover, and 60 days post hospitalization cover.
- Nominees: The group insurance plans also cover the dependents of the employees. So, there is no need to buy individual coverage for the family members.
- Domiciliary hospitalization: Certain group insurance plans cover domiciliary hospitalization. This is a case where the patient would not be able to be moved to the hospital and need to get treated at home.
- Daycare procedure: Insurance plans offer cover for hospitalization if only hospitalized for 24 hours. Group insurance plans let you get covered for hospitalization that is less than 24 hours.
- Cashless hospitalization: When you go to the network hospitals that are listed under the insurance company, you need not make any payment upfront.
Group health insurance plans have their exclusion policies. Usually, the pre-existing conditions are not covered. A few also allow them to be covered after a waiting period. Dental and vision treatments are not covered under group health plans. Alternative medicine treatments, self-inflicted injuries, and replacement surgeries are not covered under these plans.
Do you still need an individual insurance plan?
When you opt for the group health plan to be your primary health insurance, then you can find them cheaper. Your employer would pay a part of the premium. There are no medical check-ups required. On the contrary, with the individual plans, there are certain medical tests to be undergone.
The positive side is that the individual plans can be customized to suit the requirements of the individual. Even if you have a group health plan, it is necessary to go for an individual plan. This is because you would be covered only until you are employed. The plans would cease to be valid when you are out of the services of the employer. Until your new employer offers you the new plan, you need to wait.
The employers, too, are benefited much from the group health insurance. They can claim tax exemptions, and the employees are satisfied. This can increase their productivity.