Group health insurance 101: Knowing the basics

In recent years, those who had previously not purchased health insurance for themselves or their loved ones have understood the utility of buying the policy. Recent pandemics notwithstanding, it cannot be denied that quality healthcare is expensive in India, and hospitalisation and medical costs can take a big hit on your savings and income. Having a health insurance plan in India is one of the best ways to secure yourself and your family members from the perils of future ill health and accidental injuries.

You have probably heard about ‘group health insurance’. This is a branch of insurance policies that one does not buy for themselves, but they can avail its benefits. Let’s look at this type of plan in some detail in the following sections.

What is group health insurance?

As the term suggests, ‘group health insurance’ is an insurance scheme that benefits a group. Unlike an individual health insurance policy that has coverage for one person, the group health insurance policy covers several individuals under one master plan.

This category of insurance is often offered by companies, business groups, housing societies, trusts, public sector organisations, etc. The cost of the premiums for the plan are borne by the employer(s) or companies.

Some salient features of group health insurance in India

• As mentioned above, the participants in the plan, i.e. the plan beneficiaries, do not pay the premiums for the plan. The company or group sponsoring the policy pays the premiums. The participants receive the benefits of the plan if they file a health-related claim
• The participants are covered under group health insurance as long as they are still working with or allied with the organisation. For example, suppose your company provides you with a health insurance plan. You can avail of its coverage only so far as you work with that organisation, and not if you quit or retire from the company
• The coverage provided in the plan depends on the type of group insurance policy purchased by the employer. It might be a basic plan, or provide a high coverage. The coverage depends on the type of plan chosen, premium payable against it, features ingrained in the plan, the insurance provider, etc. Again, depending on the type of plan chosen, the policy may pay for accidental injury and hospitalisation, unfortunate demise arising out of accident or disease while the participant is working with the company, and medical treatment. Some comprehensive plans also cover certain number of family members of the insured individual
• The sum assured in the plan is normally dependent on the salary bracket of the insured. Those with a higher salary may have higher coverage. However, some organisations choose to offer a uniform policy coverage to all employees irrespective of their salary structure, since more coverage results in higher premiums
• The group health insurance plan is the best way for employers to offer welfare to their employees at a low cost to themselves. The plan offers tax rebates on premiums paid, and with flexibility to pay the premium in monthly, quarterly or annual instalments. Similarly, the plan benefits employees who do not have their own health insurance policy and would like some form of health coverage. It is a major motivation for many employees to remain employed or associated with the company so as to be able to avail health insurance in the future. It makes the employees feel secure and valued by the organisation
• This category of policy does not insist on a medical check-up before enrolling the new member in the plan. There is generally no waiting period nor is there a pre-existing illness clause in the plan
• Group health policies are settled quite quickly, in case of a health claim or the unfortunate demise of the participating member. The benefits are passed on to the dependent family members of the deceased
• One can have coverage under a group health insurance policy and also buy their own individual or family health insurance plan in India. This enables one to have enough coverage in case of a future health eventuality

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