Top 7 Pros and Cons of Group Health Insurance Plans

A group health insurance plan is a comprehensive answer that offers health and financial benefits to a group of people, usually employees of an organisation. If chosen, this policy extends the scope of its coverage to all the employees’ family members as well.

This policy, offering 360-degree spectrum care, has numerous benefits for employees and employers alike. However, it also has its fair share of drawbacks. As an employee or an employer, it is important to be aware of the pros and cons of group health insurance in order to make informed decisions.

Comprehensive Coverage

• As mentioned before, group health policy offers an all-inclusive coverage. If you choose the right insurance provider, you will enjoy various benefits at the cost of one policy. Here is a list of inclusions you can choose in the policy for your employees:

• Employees and their direct family members' medical health coverage (Spouse, dependent children, dependent parents).

• Hospitalisation coverage (up to the sum insured per employee)

• Pre and post-hospitalisation coverage (number of days specified in the policy)

• Day-care procedures coverage

• Organ transplant coverage (if opted for)

• Ambulance coverage (if opted for)

• Family transportation coverage (if opted for)

• Domiciliary treatment expense coverage (if opted for)

Maternity and Baby Coverage

• Maternity coverage is an extremely useful coverage offered to female employees, and to male employees’ pregnant spouses. With maternity coverage, the employees are offered delivery (natural or C-section) expense coverage, pre and post-natal treatment coverage, and the baby’s first-day treatment coverage.

• An employee can also claim maternity coverage for lawful and medical termination of pregnancy (not voluntary).

• This coverage acts as a huge relief for female employees and helps build loyalty and trust with the company.

1-Day Waiting Period

• A waiting period is the timespan the policyholder has to wait before raising a claim under the policy benefits. However, with group health insurance, you can choose the option of 1-day waiting period. This means you can raise a claim for your medical concerns from day one.

• However, some terms and conditions apply. If you have not opted for a no-waiting period policy, pre-existing conditions, critical illnesses, and specific treatments have an applied waiting period that you will have to follow.

Preventative Healthcare

• Regular checkups and screenings are paramount for a healthy individual. Most early diagnosis and cures are all thanks to these voluntary checkups and screenings. Insurance companies usually encourage these checkups in order to diagnose any condition early on in time. This is because it leads to a reduced claim from the insurance provider.

• Hence, preventative healthcare expenses are covered under group health policies.

Cashless Hospitalisation

• Cashless hospitalisation is another benefit of a group mediclaim policy. This coverage signifies the employee’s right to be hospitalised in any hospital without having to pay in cash (or card). The patient can submit valid policy documents in order to get treated first.

• The insurance company will compensate or settle the bill payment with the hospital. If the policy mentions the employee’s contribution, the employee will have to pay the amount themselves.

Partial Premium Payments

• A company hosts people from different economic backgrounds. Some can afford the high premiums of individual health insurance, while some rely on their company’s employee health benefit plans. Group health insurance is an affordable insurance policy choice for them.

• These group health policies support such employees because they only have to pay a certain percentage of the entire premium amount. Half the premium is paid by the employer and the other half is divided among the number of employees covered in that particular policy.

Employee Retention

• The biggest benefit of buying a group policy for you as an employer is that the employees tend to remain loyal to the company that cares for them. Offering a good group health insurance policy is a sign of care and bond.

Coverage Inadequacy

Your policy coverage might fall short when it comes to your metropolitan city-sized hospital bills. Nowadays, healthcare expenses are very high in high-end hospitals, even the above-average ones. If you want good treatments, you will have to pay out-of-pocket most of the time.

You can also find an affordable hospital that offers high-quality treatment so that the expenses can fit the claim you raise on your policy. Either way, the process can be a little tiring.

Lack of Control for Employees

The employer has all the controls regarding policy choices. From the policy coverage to the number of people in the group and add-ons to the benefits of the policy, the employer decides everything.

This can create great inconvenience since the employees have little to no say in it. Even if they do, there is no chance to change it going ahead in time.

Heavy for Small Scale Businesses

If the company has fewer employees, the premium payments will be a burden for both employers and employees. They will end up contributing more than what they will gain.

In that case, an employer can wait to become a medium-sized company and then opt for buying a group mediclaim policy.

Threat of Discontinued Policy

What happens to the policy if you are laid off by the company or leave the company voluntarily? You are no longer covered by the group policy and the premiums that you have paid up until now are good for nothing.

If you leave the company before raising a claim, you have paid those premiums for no benefits whatsoever.

Inconvenient for Financial Planning

Medical treatments and potential issues make a major part of one’s financial plans. Since group health insurance is filled with uncertainties like discontinuation and inadequacy, you might find it difficult to factor it into your personal financial planning. You also have very little control over the policy and how it turns out.

Lack of Customisation

Ideally, companies have a set policy for all the employees under their name. There is no way a new employee can ask for any changes in the policy, coverage, add-ons, or benefits.

For example, if there is a possibility of you inheriting a specific health condition, you cannot ask for an add-on or coverage for that treatment in the group health policy. In that case, you will also have to get individual health insurance.

Claim Settlement is Difficult

Claim settlement procedures can be difficult in some insurance companies. If you choose the wrong kind of insurance provider, it will take a lot of time for you to receive coverage. You will also have to struggle with extending the limit of the claim and getting your rightful compensation.

At Tata AIG, buying a group mediclaim policy and trusting the company has never been as easy as it is now. With a claim settlement ratio of 96.43% for the year 2021-22, Tata AIG prevails in offering excellent services and easy claim processes.

Since employees are the core of the commercial space, employee health benefit plans are one of the most vital parts of commercial policies under SME insurance policies.

The policy allows you to choose the best combination of covers and add-ons for your employees at preferable prices. Customise your group health insurance, optimise it to the best capacity, ensure all-inclusive safety, and make the purchase!

In the end, we can conclude that a group health insurance policy offers many benefits that outweigh the drawbacks. The utility of the policy depends on your preferences and what you feel is more important to you.

If you want all the benefits of the group health policy, then pay no heed to the drawbacks. But if they bother you, keep an individual policy ready for yourself!

Does group health insurance affect my salary?

In most cases, the employers transfer your monthly salary after deducting the premium of your group mediclaim policy. Most employers consider the partial premium to be a part of your salary.

Do I need individual health insurance after getting a group policy?

Yes! You might want to get additional security along with a group health policy if you live in a metropolitan or busy city like Mumbai or Bangalore.

How many network hospitals does Tata AIG have for cashless hospitalisation?

According to the new rules stated by the General Insurance Council, you can get cashless hospitalisation coverage at any hospital that is registered with official medical authorities.