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Group Health Insurance Plan

What is a ‘Group Health Insurance Plan’

A group health insurance plan is a health insurance plan that provides coverage to members of a group that tends to be employees of a company or members of an organization. Members of the group usually receive insurance at a reduced cost because the insurer’s risk is spread across a group of policyholders.

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BREAKING DOWN ‘Group Health Insurance Plan’

Group health insurance in the United States has evolved during the 20th century. The idea of collective coverage first entered into public discussion during World War I and the Great Depression. Soldiers fighting in the First World War received coverage through the War Risk Insurance Act, which Congress later extended to cover servicemen’s dependents. In the 1920s, healthcare costs increased to the point that they exceeded most consumers’ ability to pay. The Great Depression exacerbated this problem dramatically, but resistance from the American Medical Association and the life insurance industry defeated several efforts to establish any form of a national health insurance system. This opposition would remain strong into the 21st century.

Employer-sponsored group health insurance plans first emerged in the 1940s as a way for employers to attract employees when wartime legislation mandated flattened wages. This was a popular tax-free benefit which employers continued to offer after the war’s end, but it failed to address the needs of retirees and other non-working adults. Federal efforts to provide coverage to those groups led to the Social Security Amendments of 1965, which laid the foundation for Medicare and Medicaid. These government-sponsored health plans continue to provide care to those left out of employer-sponsored group health insurance plans. As national health expenditures have climbed past 15 percent of gross domestic product (GDP), the Affordable Care Act of 2010 substituted a nationwide mandate that each taxpayer join a group plan for the sort of single-payer solution that has faced stiff opposition since the 1930s.

Benefits of a Group Health Insurance Plan

The primary advantage of a group plan is that it spreads risk across a pool of insured individuals. This benefits the group members by keeping premiums low, and insurers can better manage risk when they have a clearer idea of who they are covering. Insurers can exert even greater control over costs through health maintenance organizations (HMOs), in which providers contract with insurers to provide care to members. The HMO model tends to keep costs low, at the cost of restrictions on the flexibility of care afforded to individuals. Preferred provider organizations (PPOs) offer the patient greater choice of doctors and easier access to specialists, but tend to charge higher premiums than HMOs.

The vast majority of group health insurance plans are employer-sponsored benefit plans. It is possible, however, to purchase group coverage through an association or other organizations. Examples of such plans include those offered by the American Association of Retired Persons, the Freelancers Union and wholesale membership clubs.

Buy Group Health Insurance Policy at PolicyBazaar

Group health insurance is a medical insurance that covers a group of people, who are usually the members of societies, employees of a common company, or professionals in a common group. Group health insurance helps companies identify and mitigate the risks faced by their employees. Rising costs of healthcare have made it necessary for every employer to cover their employees and their families from financial instability that may arise in case of hospitalization. Also, group health insurance helps companies in attracting talented staff. Whether you are a small group or a company, you can easily retain best talent in the industry by offering comprehensive health insurance coverage.

Almost all health insurance companies offer flexible covers at affordable premium rates, which depend on conglomeration of factors, like size of the group, profile of members, etc. It works under certain terms & conditions, which are applicable to all insured members.

At PolicyBazaar, we strive to use highly innovative approach to help you in comparing best health plans. Compare and choose the right health plan, which provides coverage to all members in a single policy.

Benefits of Group Health Insurance Policy

Employees are the treasured part of any organization. These days more and more companies are becoming employee-centric and corporate health insurance has emerged as one of the most preferred benefits to lure new talent. It plays a crucial role in influencing the psychology of an employee. It makes him feel part of a company and thus, it curtails employee attrition rate and unrest in labor unions. Moreover, it increases their productivity which increases profitability of a business. Special insurance schemes where families are also covered for benefits make employees faithful towards their employers. Moreover, by offering coverage to your employees, you become eligible to get tax deductions under Income Tax Act. So group health insurance policy is a win-win situation for both employees and employers.

Features of Employee Health Insurance Plans

There are several group health insurance policies available in the market. Listed below are some common features present in all employee health insurance plans.

      • Employee health insurance companies typically cover medical benefits for insured (self), spouse, children and dependent parents
      • Some health insurance providers cover pre-existing illness and maternity as well
      • Employee health insurance offers cashless hospitalization at network hospitals
      • Group health insurance can cover ancillary charges such as ambulance costs too.
      • Some employee health insurance policies provide fee reimbursements of specialists and other medical practitioners for follow checkups

Want a Healthy Workforce? We can Help!

It is no secret that employees’ value benefits of group health insurance. However, as premium costs escalate and claim procedure being stringent; employee health insurance has become a tight rope walk in India. We at PolicyBazaar introduce a wide gamut of group health insurance policy products to help you in choosing best corporate insurance plans that will suit both parties i.e. employers and employees. Blending the entire service right from expert advisory, purchase assistance and policy renewal in one package, PolicyBazaar works towards making insurance process easy and convenient.

What is Group Health Insurance?

Group Health Insurance (or Group Mediclaim) provides healthcare coverage to a group of people belonging to a common community (typically as employees of a company). Group Health Insurance plans are generally uniform in nature, offering the same benefits to all employees or members of the group. However, the biggest advantage of Group Health Insurance is that it can be customized to meet unique needs of the company.

A group health insurance policy offers several other benefits employees cannot get to avail of on an individual basis. These benefits include coverage for pre-existing diseases. In case of a group health insurance policy, an individual does not have to wait for specific diseases to be covered (i.e. there is no waiting period), including maternity coverage. A customized insurance coverage can be enjoyed only with the group medical insurance scheme, making the employees feel more secure when it comes to health.

Most of the companies provide Group Health Insurance as a part of their Employee Welfare program. Every company, however, opts for a plan that is customized, based on their requirements.

What different covers are available?

It is very critical to customize a Group Health Insurance plan for each group. Read the benefits provided in group health insurance below. Each group can customize the benefit structure, based on its unique need. Click on the below link to learn more about how each attribute can be customized in Group Health Insurance.

1. Maternity Benefit

2. Waiver of waiting periods (30 days, 1 year, 2 years, & 4 years)

3. Domiciliary Hospitalization Expenses

4. Pre-Existing Disease Covers

5. Cover for dependents (spouse, kids, parents)

What are various waiting periods in Group Insurance?

A standard individual health insurance policy has several waiting periods for specified reasons and diseases. One of the biggest advantages of having a group insurance (or group mediclaim) is that these waiting periods can be waived off. Also, it is important to understand the implications of the waiting periods.

What is the ‘30-days’ waiting period?

This is put by the Insurer to ensure that policy was not taken for a planned surgery immediately after the policy. Hence, emergency hospitalization and accident cases are covered in this period. All other hospitalization cases are not covered for the first 30 days of the inception of the policy. This condition can be waived off (if desired).

What is the one-year waiting period?

Group health or medical insurance policies exclude certain high incidence diseases, including Cataract, Kidney Stone, and Gallbladder etc. The list of ailments varies from Insurer to another. Because of this condition, the member cannot claim this benefit until the expiry of 1 year in the plan. This condition can be waived off, if desired, under group insurance.

What are 2-year and 4-year waiting periods?

Several insurers would extend the waiting period for above-discussed ailments to 2 years and 4 years, respectively. This condition can be waived off (if desired).

What is the ‘9-months’ waiting period for maternity?

Group health insurance policies that provide maternity benefits have a 9-months waiting period before the person can claim the benefit. However, if the company so desires, this waiting period can also be waived off, essentially making the member eligible to claim maternity benefit from Day 1.

What is room rent capping in Group Insurance (Group Mediclaim)?

Hospital costs are dependent upon the type of room selected, e.g. fees for doctor consultation in single A.C. room would be higher when compared to the shared room in the hospital. Hence, insurance companies put conditions on room eligibility. All costs thereafter are payable as per the eligible room rent. Typical eligibility is 1% of sum assured as room rent cap.

How does health-care cost vary by room type?

Below figures, shows the cost of Single AC room and Shared Room, along with are mentioned the package cost of Heart By-pass surgery for these rooms respectively. These are actual costs for a leading hospital in Delhi.

Room rent per day:

1. Single AC Room: 9900

2. Shared Room: 4000

Cost of heart surgery by room type:

1. Single AC Room: 292,000

2. Shared Room: 200,000

How does claim admissibility vary by room type?

In case the policyholder selects a room with higher rent than the one mentioned in the policy document, the charges to be paid shall be limited to the charges applicable to the entitled category.

So if for instance, one had a health policy with sum assured of Rs. 4 Lakhs, and a room eligibility of up to Rs. 4000, then the claim payable would be limited to Rs. 2 Lakhs. So despite the sum assured being much higher, the Insured would have to pay 92,000 out of pocket.

Can room rent be customized under group insurance policy?

Fortunately, one can customize the Group Health policy to choose the room rent type. Following options are available:

1. As proportion of Sum Assured (1%, 1.5%, & 2%)

2. Single AC room (irrespective of the costs)

3. No room rent capping at all

How are pre-existing diseases covered in Group Health Insurance?

The primary advantage of group health insurance is that one can enhance the coverage over a standard policy. One such benefit that most companies take while buying Group Insurance is the pre-existing diseases. A few commonly asked questions regarding pre-existing diseases are mentioned below:

What is a Pre-existing disease?

A pre-existing disease is an ailment or sign of an ailment present before the inception of the insurance policy. For instance, many of the cardiovascular diseases are classified as pre-existing diseases, in case one has a heart attack. The same is valid in case one has a problem of severe blood pressure abnormalities, which can also be classified as a pre-existing disease in the name of cardiovascular issue.

Are pre-existing diseases covered in a standard health insurance?

Many insurance companies start providing coverage for pre-existing diseases after a waiting period of 4 years. Some other insurers would have a lower criterion of 3 years. Pre-existing medical conditions are permanently excluded before policy issuance. This is in order to prevent any fraud or misuse so that people do not buy insurance to over pre-existing diseases.

Can pre-existing be covered from Day 1 in Group Health Insurance?

Yes. Group health insurance policies offer coverage for pre-existing diseases right from day one. Since group insurance is purchased for numerous families together, the chances and the impact on frauds are considerably reduced. Hence this benefit can be offered by Insurance companies.

Should we go for pre-existing disease waiver?

It depends on the demographic to be covered and the benefits you want to offer to your group members. For instance, if the group includes youngsters who don’t have a medical history, including coverage for a single person, the benefits of the policy are comparatively less important. On the other hand, if the group has an average age of 40 with parents covered, then the significance of this benefit is much more.

In addition, it is dependent on the group’s policy as well as on the cost it wishes to incur. Some group members might be entitled to the benefits of the policy only after they have been with the system for 4+ years. At the same time, this benefit comes only at an additional cost.

What is maternity Benefit in Group Health Insurance?

One of the key benefits that young employees value in the Group Health Insurance (Group Mediclaim) provided by the company is the Maternity Benefit. There are several aspects to the Maternity benefit that should be considered while designing and purchasing the group health insurance plan. These aspects are covered below:

How is maternity sum assured different from overall sum assured under group health insurance?

The maternity sum assured is different from the overall sum assured of the group mediclaim policy. This sum assured is fixed different for Normal and Caesarean delivery. Generally, companies provide higher sum assured for Caesarean delivery.

The market average is to provide 25,000 as sum assured for Normal and 35,000 for C-Sec delivery. While most Insurance companies limit the benefit to 50,000, some would provide as high as 100,000.

Group insurance plans for young group offers maternity benefits. Hence HR managers have to evaluate the extent of benefit to be offered carefully.

What is the application of co-pay on Maternity?

In case your policy has co-pay, it is generally not applicable for the maternity claims. The rational being that benefit is already capped. However, it is important for your Insurance Broker to clearly specify this in the policy terms since ambiguity later can lead to claim disputes and employee dissatisfaction.

What is the cover for Abortion in Maternity?

Group Health Insurance generally does not cover self-inflicted, or fertility related treatment. Similarly, voluntary abortion is not covered under Group Health Insurance by most Insurance companies. However, emergency abortion, i.e. for the life-saving purpose is covered by most insurance companies. It is important to note that each company has its own view on this, so important to get it clarified through your insurance broker.

Does the policy provide coverage to a newborn baby under maternity coverage?

In a standard policy, a newborn is not covered under the health insurance policy unless it is at least 90 days old (some companies increase the restriction to make it 150 days). However, one can get it customized to cover a newborn from Day 1. Within this, the employer has a choice to fix the sum assured for the newborn for the period between 0-90 days. It can be either the maternity sum assured or the sum assured available to the employee. It is highly recommended that the higher sum assured should be chosen, since if any complication arises to the newborn, the maternity sum assured would be highly inadequate.

What is the waiting period for maternity?

Some of the individual policies that offer maternity benefit have a waiting period of 3-4 years. However in a Group Health Insurance (or Group mediclaim) the waiting period comes down to 9 months i.e., the member should be at least be enrolled in the policy for nine months. This condition for 9 months waiting period can also be waived if desired by the company. This would mean that from Day 1 of the policy, the enrolled members can claim the maternity benefit.

Is internal congenital disease covered under group health insurance?

It is a standard exclusion with most insurers. Again, this exclusion can be waived off and get it covered in the group insurance policy. Do note that all companies do exclude external congenital disease.

Group Health Insurance, Explained

Myriad changes in the health insurance market have more Americans, particularly business owners, focused on finding the right group coverage while managing costs. In current times, major medical insurance isn’t just a nice-to-have: it’s a necessity.

Providing group health insurance can give you an edge over other businesses vying for your recruits. A nationwide survey conducted by Paychex looked at the impact of benefits on employee retention. Forty-four percent of employees stated they would leave their current employer due to a lack of benefits. Furthermore, affordable health insurance ranked first when asked which benefits would entice employees to stay at their current job. Let’s look at how you can utilize health insurance offerings to retain your best workers.

What is group insurance?

Group insurance plans cover groups of two or more people — typically an employer, two or more employees, and their families. Group insurance is a particularly effective option for helping businesses attract qualified job candidates and reduce employee turnover. Despite initial fears of a negative impact of the Affordable Care Act (ACA), more businesses have added group coverage than ever before.

What coverage is included in group insurance?

Depending on the needs of the business, its employees, and the offerings of the carrier, group insurance plans can include a range of coverage including, but not limited to, medical, dental, vision, life, and long- and short-term disability insurance. Group insurance typically does not refer to coverages a business owner would have to protect themselves, their business, and their property – commonly referred to as property and casualty insurance.

How does group insurance benefit small businesses?

Unlike individual insurance, where employees pay separately for 100 percent of their own premiums, group insurance allows employers and employees to share the costs, with employers covering some part of the premium cost for a single employee or dependents. Businesses that offer group health insurance may also be eligible for federal and state tax credits, depending on their size and situation.

Should you choose group or individual health insurance?

Unless you are the only employee at your business, the pertinent question is whether you should choose an individual or group health plan. While group insurance is an effective, and in many cases, less-expensive option for many small businesses, in some cases individual insurance may be the better choice. By reviewing your situation and options with a licensed insurance agent, you can determine which type of insurance is the best choice for you and your business.

How much coverage do you need?

With many different types of group insurance offered through different carriers, it can be difficult to know exactly which plan will help ensure that you and your employees have the appropriate coverage. Take your business size, location, industry, and more into account to help you understand the coverage you need, and how to get it.

What is the minimum number of employees required to participate in a group insurance plan?

In general, the necessary percentage of participating employees becomes lower with increasing business size, but specific group insurance participation requirements vary by state and carrier.

What are the steps for getting a group insurance quote?

There are many time-consuming, complex tasks that must be done right to select the right group insurance plan and keep it running smoothly:

  • Research carriers in your area
  • Select plan offerings
  • Obtain quotes
  • Compare the results to find coverage that fits your needs and budget
  • Manage employee enrollment, from submitting application forms to the carrier, to enrolling employees, and setting up payroll deductions
  • Continuously coordinate with employees and your carrier to stay on top of enrollment changes, remove terminated employees from coverage, and track eligibility of new hires
  • Maintain regular communication with employees at different stages of the plan year, including notifying them of open enrollment and providing enrollment assistance
  • Make premium payments on time, stay compliant with IRS regulations, and set up and administer a COBRA or state continuation program for employees who have lost coverage

Insurance quotes are complicated

Obtaining the necessary quotes, enrolling employees, and monitoring the plans can be time-consuming and extremely complex. Doing it yourself could result in costly errors or oversights that prevent you from getting the right coverage at the right price while staying in compliance with the law. A full-service, experienced employee benefits agency can dedicate time and expertise to your situation, so you can take the guesswork out of finding and administering a group health plan.

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