Group Health Insurance for Startups

The global start-up industry is growing rapidly, increasing the need for skilled employees around the world.

The primary foundation of any start-up’s success is its employees. Depending on their performance, the start-up can scale up or down and increase its overall operational efficiency.

Offering group health insurance coverage is a significant investment, as it will keep the employees happy and fulfil their needs for maximum support.

Here are the top features that make start-up health insurance a great option.

Lower Requirements - Compared to individual health insurance plans, some policy terms allow start-ups to benefit from extensive coverage for smaller employee groups. This is because the minimum employee requirements are not too stringent, and most insurers have low requirements.

Better Scope of Scalability - Another feature of most group health insurance for start-ups is that it allows them to remove and add employees to a policy easily. This helps start-ups manage their group insurance plans better, as they do not have to reapply for plans due to a growing or shrinking team.

Various Options - For group health insurance, start-ups can explore a wide range of options depending on their needs and budget. The plans can either be general health coverage or more specific categories like group travel, personal accident, pension plans, etc.

Better Affordability - Group health insurance plans are more affordable, making them a better option for start-ups with limited capital. This is because a more significant number of employees are covered within a group health insurance policy, making it a less risky option for insurance providers.

Similar to most health insurance plans, group health insurance follows a straightforward approach to make it easier for start-ups to adopt the same in their planning. Here is how group health insurance plans work.

Selection

The first step is to assess the needs of the business and its employees and choose a budget that aligns with your business goals and growth ideas.

This allows you to draw fair comparisons between different group health insurance plans and choose the one that offers favourable coverage as per needs and budget.

Integration

After choosing a plan, the next step is to begin the integration process by selecting the eligible employees and the necessary coverage and add-ons, if any.

Premiums

With most group health insurance plans for start-ups, the employer commonly pays the premium.

However, in many cases, only a portion of the overall premium is paid by the employer, and the remaining is deducted from the employee’s salary via payroll deductions.

Moreover, as group health insurance for start-ups usually offers coverage extensions for family members, if an employee chooses to include their family members in the same plan, they will be required to pay an additional premium.

Claims

The final step after the premium payment is to file a claim in case of unexpected medical emergencies or similar situations.

When a start-up invests in a group health insurance policy, the benefits of the same are shared between both the employer and the employees.

Employees receive extensive coverage for healthcare and medical emergencies, while employers receive peace of mind because of improved retention.

Let's examine the benefits for each below to understand the impact of group health insurance on both the employer and employee.

Better Talent Attraction - One of the primary benefits of offering a group health insurance policy for employees is promoting employee well-being in the industry.

In the start-up industry, potential employees look for employers that prioritise their well-being, and thus, providing group health insurance can help employers attract the necessary talent with ease.

Increased Employee Motivation - When employees are aware that their employer takes care of them, their motivation to work to their full potential is at its peak. Thus, with the provision of group health insurance, employees work with added peace of mind, putting more effort into their job responsibilities with added motivation.

Tax Benefits - The premiums paid towards a group health insurance policy are eligible for tax exemptions under Section 37(1) of the Income Tax Act as they fall under the category of business expenses. This results in reduced tax liability for the start-up, making it easier for them to grow.

Improved Employee Satisfaction - Employees look for added benefits on top of competitive salary packages to give their best to a start-up. With the provision of group health insurance for start-ups, employee satisfaction will be significant, adding to the overall performance and efficiency of the start-up.

Increased Retention - One of the most crucial worries for start-ups is retaining employees who add value to the company. However, with the help of a start-up health insurance plan, employee retention will be easier as employees would not want to discontinue the perks of a group health insurance plan.

Benefits of Health Insurance for Start-Up Employees

Affordable Health Insurance - As compared to individual health insurance plans, group health insurance provides extensive coverage at an affordable price, making it a more cost-effective solution for necessary financial assistance in times of emergencies.

Coverage for Family - Another benefit of a group health insurance policy is the option of adding family members under the same plan. This extension add-on allows employees to get necessary coverage for their immediate family members at affordable rates without the hassle of managing too many individual insurance plans.

Better Financial Management - Group health insurance coverage helps employees be better prepared for medical emergencies, as they do not have to exhaust their out-of-pocket expenses. This allows them to plan their finances better and benefit from improved investment and expense management.

Increased Medical Access - When a start-up purchases a group health insurance policy for its employees, it assesses the employee group’s needs and purchases a plan that fits the company budget. Due to this thorough assessment, employees can benefit from increased access to various medical treatments and assistance in times of need.

Faster Healthcare Facility - Compared to individual health insurance plans, group health insurance plans offer faster claim settlements in most cases due to their extensive coverage for a group of employees.

To find a reliable group insurance policy to provide your start-up employees with an added incentive in the form of health coverage, you must know the different parameters to assess the same.

Here are a few key considerations to assess before purchasing any group health insurance policy.

Claim Settlement Ratio - The first parameter to assess when choosing a group health insurance policy is the claim settlement ratio of different insurers. This is crucial as it will provide a clear idea regarding the estimated timeline of claim settlements and whether it is favourable for your start-up or not.

Customer Support - The next parameter to assess is the availability of customer support. Given that group health insurance covers a group of employees, having customer support is necessary to ensure employee queries are addressed as soon as possible.

Waiting Period - A start-up must also assess the waiting period clauses of different insurers to determine how long it will take for employees to obtain the necessary coverage. The longer the waiting period, the higher the risk of employee dissatisfaction.

Inclusions and Exclusions - Different types of group health insurance plans offer different ranges of coverage. Thus, it is necessary to evaluate the different inclusions and exclusions of a group health insurance policy to assess which one fits your needs the best.

Customisation Flexibility - It is necessary to choose a group health insurance policy that allows employees to customise the base policy with an additional premium to increase their coverage with riders.

This will ensure the employee-employer relationship is maintained, as the employee will feel more included and be able to avail coverage according to their specific requirements.

Scope of Scalability - A start-up constantly experiments with different growth plans and strategies to maximise its company performance. For such decisions, it might have to hire or fire existing employees.

Thus, start-ups should go for group health insurance plans that offer ample scope of scalability to allow start-ups to add or remove employees from the plan quickly.

Investing in group health insurance for start-ups is a significant step towards employer and employee well-being in terms of employee attraction and retention for the start-up and added financial benefits for the employee.

It is a long-term investment by a start-up that attracts the right talent pool that can help convert the business growth plan into reality. A well-thought-out and planned start-up health insurance policy will be a win-win for both the start-up and its employees.

Tata AIG’s group mediclaim policy provides extensive coverage for in-patient treatments, pre- and post-hospitalisation expenses, ambulance charges, maternity benefits, etc. Additionally, we offer maximum convenience to our policyholders with our user-friendly website that allows you to compare, buy, renew, and file a claim in just a few steps.

Visit our website to learn about other SME insurance policies!

Is there a No Claim Bonus benefit for group health insurance?

Most group health insurance providers do not offer a No Claim Bonus benefit with their policies. This is because the NCB benefit applies to every claim-free year for a policyholder.

However, in a group health insurance policy, a group of people are covered under one plan, with premium contributions coming from both the policyholder and the insured individuals, making it difficult to calculate and apply NCB.

How many employees are required to purchase a group health insurance policy?

The number of employees required for a group health insurance policy varies from insurer to insurer and employer location. However, in most cases, the minimum requirement for the number of employees for start-ups can range from as low as 5 to 10 employees.