Over the years, group medical insurance has become a huge perk that firms offer to attract good talent. Why? Because everyone wants a health plan that provides a financial safety net during medical emergencies. However, many people don’t entirely understand the coverage and benefits of group plans.
This blog discusses five misconceptions about group medical insurance. Explore them to make informed decisions.
What is a Group Health Insurance Plan?
A group health insurance plan is a type of health insurance that offers insurance coverage to a group of people, usually employees of a company or members of an organisation. It provides financial protection against medical expenses incurred on hospitalisations, doctor consultations, medications, surgeries, etc.
Group health plans are cost-effective compared to individual health insurance plans, as the risk is spread among several employees, leading to lower premiums. Many organisations offer group health plans as part of their employee benefits package and the employees don’t have to pay any premium.
Some of the key benefits of group health insurance are:
5 Misconceptions about Group Health Medical Insurance
Group health insurance comes with many benefits but there are also some misconceptions about this plan. Let’s debunk five major misconceptions:
1. You don’t need individual health insurance if you have group health insurance.
Reality: Group health insurance is valid till you are part of the organisation offering it. When you leave the company, the coverage will lapse and any emergencies during this period will be your out-of-pocket expenses. If you have individual health insurance along with employer-provided health insurance, it will serve as a backup plan and ensure continuity of coverage.
2. Group health policies are expensive.
Reality: Small businesses perceive group health plans as very expensive. But this is not true. In fact, group health plans are less expensive than individual health insurance because the risk is shared across a group of people, resulting in lower premiums.
3. All group plans are the same.
Reality: This is not true. Policies can be customised depending on the business size, employee requirements, budget, and group insurance provider. Flexibility allows employers to provide a plan that aligns with their budget and employees' needs. While some plans offer basic coverage, others offer additional benefits like free annual health check-ups, wellness programmes, etc.
4. Group health plans offer adequate coverage
Reality: Usually, the sum insured in group health plans is not sufficient to meet major medical needs, particularly for families. Therefore, it is advisable to have a health insurance plan or a top-up plan to meet additional expenses. The employee should check the coverage offered by a group plan to determine whether it is adequate.
5. Group health insurance is free for all employees
Reality: If group health insurance is offered as part of the employee benefits package, then it is free for the employees of that company. The premium will be paid by the employer. However, some companies offer the plan on a cost-sharing basis, i.e., employees will contribute towards the premium or pay extra for additional coverage.
Factors to Consider While Buying Group Health Insurance
Some of the factors that employers must consider while buying group health insurance plans are:
1. Coverage: The group health insurance policy must provide sufficient coverage to address the average medical needs of employees. The employer can also consider additional benefits such as wellness programmes, outpatient consultations, diagnostic test coverage and coverage for mental health.
2. Network Hospitals: The broader the network of hospitals, the better the plan. This will help employees opt for cashless treatments in any hospital of their choice and don’t have to pay anything upfront.
3.Policy Exclusions: Being fully aware of the exclusions will ensure no surprises during employees' medical emergencies.
4. Claim Settlement Ratio: For efficient and hassle-freeclaim settlements, the organisation must choose an insurer with a high claim settlement ratio. The ratio indicates the insurer's financial ability to pay claims.
5. Customer Support: The insurance company must provide 24/7 customer support to assist employees with queries or concerns.
Conclusion
Group health insurance plans are beneficial for both employers and employees. They are cost-effective and offer comprehensive coverage. Employees can include their spouse and children in the group health plan. However, some misconceptions need to be debunked to help businesses make an informed decision about coverage.
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