Are group health plans cheaper than individual ones?

Risk Pooling

One of the primary reasons for the lower cost of group mediclaim policy is risk pooling. Insurance companies spread the risk across a large number of employees, which includes a mix of high and low-risk profile individuals.

The policy is priced based on general factors such as the size of the group, the average of the employees, the nature of their jobs, and the industry in which the company operates. This distribution of risk reduces the overall cost of insurance on an individual basis, which makes it more affordable for each employee.

Employer Contributions

In most cases, the employers pay the premiums for group health insurance. This eliminates the burden of premium costs on employees. For employees, providing health insurance is beneficial as it helps attract and retain talented employees while also offering tax benefits.

The premiums paid for the group health insurance policies by the companies are considered business expenses. This reduces the company’s taxable income. Even when employees contribute towards the premium, the cost is shared among the group, which significantly lowers individual expenses.

Economies of Scale

Group health insurance policies benefit from economies of scale. When a large group is insured under a single policy, the administrative and operational costs per person reduce significantly. This efficiency in managing a single large policy rather than multiple individual policies helps in lowering the premium rates.

Lower Administrative Costs**

Managing group health insurance plans involves lower administrative costs compared to handling individual policies. The streamlined process of enrolling employees, handling claims and providing customer care services in bulk reduces the management costs on the insurer's end. These savings are reflected in the form of lower premium rates for employers and employees.

A Happy Workforce

The provision of group health insurance helps employees maintain their health and well-being. This, in turn, leads to a happier and more productive workforce. It serves as a safety net for medical emergencies, which ensures employees feel valued and supported in the workplace.

Tax Savings

Employees can receive tax benefits under various sections of the ITR by offering group health insurance. This reduces the organisation's taxable income, which provides a significant amount of savings.

Retaining and Attracting Talent

A robust group health insurance policy can influence employees to make decisions in favour of the organisation and also attract new talent. Not only does a group health insurance plan increase employee loyalty but also make the organisation stand out as an option during talent acquisition.

Boosts Goodwill

Offering comprehensive group health insurance plans enhances the reputation of the organisation both internally and externally. This contributes to the positive company culture and market goodwill.

To conclude, for a company even cheap group health insurance stands out as an indispensable investment for the financial and overall well-being of the workforce as a whole.

Group health insurance is easily one of the most important investments under business insurance India. Investing with a reliable insurance provider like Tata AIG provides various additional benefits with the purchase of group health insurance.

Beyond acting as a great economic option for health care, group health insurance also offers an array of benefits that help foster a more happy and productive workforce. Hence, investing in group health insurance is a strategic decision that supports both the financial and operational goals of a company and its importance must not be undermined.

Does group health insurance cover domiciliary treatments?

Yes, group health insurance policies provide coverage for expenses related to at-home treatment for the management of an illness that is covered under the policy. However, it does not include coverage for enteral feedings or end-of-life care.

Are in-patient treatment expenses covered under group health insurance?

Yes, medical expenses related to diseases, illnesses, or injuries during the policy period that require hospital admission are covered. However, the insured individual must be admitted to the hospital for at least 24 consecutive hours for the treatment to qualify as in-patient and be eligible for coverage under the policy.