Group health insurance, as the name suggests, is a kind of insurance policy that provides medical benefit to a particular group. This group is generally the employees of an organization.
It is often referred to as corporate health insurance or employee medical insurance when provided by an employer to the employees of an organization.
This kind of coverage is beneficial to both the insurer and the insured. Group Medical Insurance policy has its benefits for the employer as well as the employee.
Benefits of group health insurance to the employee
- No Premium: The employee is not required to pay any premium. The employer generally pays the premium. As a result, you get the dual advantage – pocketing a health insurance policy without paying anything from your own pocket.
- No medical expenses: If you are covered under group health insurance, you or your family members do not need to buy any medical insurance separately for yourself or spend money on medical expenses out of your pocket. Pre-existing diseases are often covered under this insurance (not a regular feature of an individual plan) without any additional premium.
- Maternity benefits: Not all policies offer maternity benefits, but group health insurance does provide maternity benefits for your wife. And the best part is that it does not make you wait for an extended period to avail the maternity benefit. It is another benefit not enjoyed by individual policyholders as there is a waiting period of 2-4 years.
- Fewer hassles: If you are an employee, you do not have to search for the best plan for you. You do not have to pay any premium. It is being paid by your employer. The paperwork is also lesser in this policy as compared to individual health insurance.
- Pre-existing diseases’ coverage: This insurance provides coverage for pre-existing ailments as well. So at the time of buying the plan, if you or any of your family members is suffering from any disease, it would be covered by this policy.
Benefits of group health insurance to the employer
- Lower premium: The premium payable in this policy is quite small and as such the employer is also willing to buy it for the employees.
- Increased productivity of employees: This insurance serves as a perk for the employees. Since they have access to medical treatment, they absent less and feel more confident and motivated. It increases the productivity of the employees, and it helps to retain them for an extended period.
- Tax benefits: The employer can claim the tax deduction for the amount of premium paid towards group health insurance policy.
Apart from the discussed benefits, the group health insurance plan has certain disadvantages too.
- A group health insurance is valid for an employee till the time you are associated with the organization. The employer might take back the benefit any time for cost cutting purpose. In any case, the benefit of this policy is not available post-retirement.
- The employer customizes the plan according to the company’s budget. Hence, it may not provide all the benefits required by the employee or might exclude your family members from the coverage.
The Bottom Line
Group Health Insurance policy is an excellent option for working professionals, but availing only this policy might not serve your purpose always. So it is often suggested to buy a top-up policy.
A lot of insurance companies offer top-up insurance to provide additional health benefits at lower premiums which is both re-assuring and affordable.
In other words, a group health insurance is never a substitute for individual health insurance. It is an additional policy, and you should never compromise on buying personal health insurance for this!