GROUP HEALTH INSURANCE

An Employer Group Health Insurance Policy (also known as Group Mediclaim Insurance Policy for Employees or a Corporate Health Insurance Policy) is an Insurance Policy which reimburses the employees for the hospitalisation expenses incurred by the employees during the year. A Group Health Insurance Plan covers a group of people under a common health insurance plan. Usually, a company purchases Group Health Insurance Policy for employees.

A Group Health Insurance Policy can be tailored to suit customer requirements. Typical features of a Group Health Insurance Policy are as follows:

1. Hospitalisation Expenses: A Group Medical Insurance Policy offers coverage for Hospitalisation Expenses if the Insured Person is hospitalized for more than 24 hours in a hospital for any injury or illness.
2. Coverage for Pre and Post-Hospitalisation Expenses: Most Corporate Health Insurance Policies provide cover for Pre and Post-Hospitalisation Expenses for 30 and 60 days respectively.
3. Pre-Existing Diseases are covered from 1^st Day under a Corporate Health Insurance Policy
4. Coverage for Daycare Procedures: Group Mediclaim Policies also provide coverage for Daycare Procedures which do not require hospitalisation of more than 24 hours.
5. Maternity Coverage: Group Health Insurance Policies also provide coverage for Maternity Expenses with a Sub Limit without any waiting period.
6. New-Born Baby Covered from Day 1: Corporate Health Insurance Policies also have an option to cover New-Born Babies from Day 1 under the Policy.

Major Exclusions under a Group Health Insurance Policy are as follows:

1. Coverage for OPD: A Corporate Health Insurance Policy does not provide coverage for OPD (Out-Patient Department) Treatments though OPD Coverage can be opted for by paying an additional premium.
2. Injuries/Illness caused under influence of alcohol/drugs: A Group Health Insurance Policy does not provide coverage for illnesses or injuries that are caused due to use of intoxicating drugs and/or alcohol.
3. Investigation & Evaluation Expenses: Coverage for expenses related to any admission primarily for diagnostics and evaluation purposes are excluded under a Group Health Insurance Policy.
4. Rest Cure, Rehabilitation and Respite Care: Expenses related to any admission primarily for enforced bed rest and not for receiving treatment are not covered under a Group Health Insurance Policy
5. Cosmetic or Plastic Surgery: Expenses for cosmetic or plastic surgery or any treatment to change appearance are not covered under a Group Medical Insurance Policy
6. Hazardous or Adventure Sports: Expenses related to any treatment necessitated due to participation as a professional in hazardous or adventure sports such as para-jumping, rock climbing, mountaineering, rafting are not covered under a Corporate Health Insurance Policy

Group Health Insurance Plans are usually less expensive an Individual Health Insurance Plans and they offer more comprehensive coverage. Group Health Insurance Policies have no waiting period for pre-existing diseases and maternity benefits while Individual Health Insurance Policies have a waiting period of 3-4 years for the same. Group Health Insurance Policies also typically do not require medical checkups of the Insured while an Individual or a Family Floater Health Insurance Policy requires a medical check up of the Insured Person.

A Group Health Insurance Policy offers various benefits depending on the Group Health Insurance Plan selected by the employer. Some common features of a Group Health Insurance Policy are as follows:

1. Cover for Hospitalisation Expenses: All Group Health Insurance Policies offer cover for hospitalisation expenses incurred by the employees during their treatment.
2. Cover for Pre and Post-Hospitalisation Expenses: In addition to cover for Hospitalisation expenses, most Group Mediclaim Insurance Policy for Employees will provide cover for Pre and Post-Hospitalisaiton expenses, usually for 30 days and 60 days respectively.
3. Room Rent Limit: Group Health Insurance Plans will specify a room rent limit (for eg: 1% and 2% of Sum Insured for Normal and ICU Rooms). The Policy will thus pay the room rent only upto the limit specified. You can opt for a Group Health Insurance Plan with no room rent capping as well.
4. Maternity Cover and New-Born Baby Cover: Some Group Health Insurance Policies also provide coverage for delivery expenses as well as expenses incurred on new-born baby if this feature is opted for.
5. Pre-Existing Diseases Cover: Most Group Health Insurance Policy will provide cover for Pre-Existing Diseases without any waiting period. This is a big advantage.
6. Domiciliary Hospitalisation Cover: Some Group Health Insurance Plans offer benefit of Domiciliary Hospitalisation provides reimbursement for treatment availed at home if the Insured Person is unable to get hospitalised.
7. Day Care Procedures: Most Group Health Insurance plans have a list of Day Care Procedures which are covered. Day Care Procedures are procedures which do not require hospitalization
8. Cashless Hospitalisation: Most Group Mediclaim Insurance Policy for employees have a network of cashless hospitals where the Insured can avail treatment without paying treatment expenses from out of their own pocket. The Insurance companies will directly reimburse the hospitals for the treatment cost in case of Cashless Claims Settlement.

Employers can enhance the coverage under a Group Health Insurance Policy by opting for the following add-on covers:

1. Maternity Coverage: GMC Policies provide the option to provide Maternity Coverage without any waiting periods with a Sub-Limit. This add-on cover is very beneficial for female employees and spouses of male employees.
2. Coverage for Pre-Existing Diseases: Most Individual or Family Floater Health Insurance Policies provide coverage for Pre-Existing Diseases after a Waiting Period of 3-4 years. However, employers can provide coverage for Pre-Exisiting Diseases from Day 1 under Corporate Health Insurance Policies.
3. Coverage for Outpatient Department (OPD) Treatment: Coverage for OPD Treatments is usually excluded under Group Medical Insurance. However, coverage for OPD Treatments can also be provided as an add-on cover under a GMC Policy.
4. Corporate Buffer: There are instances when employees the hospitalisation expenses exceed the Sum Insured provided under the Group Health Insurance Policy. In such a case, employers have an option of approving additional expenses incurred by opting for a Corporate Buffer under the Group Health Insurance Policy.

Group Health Insurance Plans usually specify a room rent limit as a percentage of Sum Insured (for eg: 1% and 2% of Sum Insured for Normal and ICU Rooms). The Policy will thus pay the room rent only upto the limit specified. If the actual rent of room exceeds the room rent limit, then the Policy will apply a deduction for the room rent and a proportionate deduction is applied for all other expenses incurred.

For example: Consider an employee insured under a Group Health Insurance Policy with a Sum Insured of Rs2 lakhs and a Room Rent Capping of 1% of Sum Insured per day. This means that the maximum expenses payable towards room rent under the Policy is restricted to Rs2000 per day (1% of 2 lakhs)

If the employee gets admitted to a hospital with a room rent of Rs4000 per day, then the Policy will reimburse the employee only Rs2000, that is, 50% (2000/4000) towards the room rent. Additionally, all other expenses such as Doctors Fees, Operation Theatre Charges, will be deducted by 50% by applying a proportionate deduction clause.

It is important to understand the pros and cons of opting for Pre-Existing Coverage from Day 1 under a Group Medical Insurance Policy. Opting for Pre-Existing Disease Coverage from Day 1 will result in extra premium. However, it could protect the employees from huge medical bills in case they get sick because of a Pre-Existing Condition. Employers should consider the costs vs benefits carefully before opting for Pre-Existing Disease Coverage from Day 1.

Yes, Maternity Benefits can be provided with a Sub-Limit of Rs50,000 to Rs1,00,000 a Group Medical Insurance Policy for Employees. The Policy will typically cover delivery expenses, doctor's visits, and pre and post-natal expenses.

A Group Health Insurance Policy typically has 4 types of Waiting Periods:

1. First 30 Days Waiting Period refers to the Expenses related to the treatment of any illness within 30 days from the first policy commencement date.
2. Waiting Period for Pre-Existing Diseases refers to the Waiting Period for Pre-Existing Disease before the Policy pays out any claims for hospitalization on account of Pre-Existing Diseases.
3. Waiting Period for Specific Diseases: All Group Health Insurance Policies have a list of specified diseases for which the claims are not paid during the Specified Diseases Waiting Period
4. Waiting Period for Maternity Coverage: Most Group Health Insurance Policies have a Waiting Period of 3-4 years before providing maternity coverage under the Policy.

All the above-mentioned waiting periods can be waived off by paying additional premium under the Group Health Insurance Policy.

A Group Health Insurance Policy offers many benefits for employers as listed below:

1. Group Health Insurance Plans can be customised: The features of a Group Health Insurance Policy can be customised depending on the budget and requirements of the employers.
2. Lower Premiums: The premium for a Group Health Insurance Policy is lower than premium for an Individual Health Insurance Plan for similar benefits and coverage.
3. Tax Savings for Employers: The premiums paid by employers towards a Corporate Health Insurance Policy for employees are a tax-deductible expense for the company. The premiums reduce the taxable profits of the company and hence reduces the tax outgo as well.
4. Employee Retention: Group Health Insurance Plans are an important perk for employees and helps in attracting talented new employees as well as retaining existing ones.

A Group Health Insurance Policy offers many benefits for employees as well:

1. Zero Waiting Period for Pre-Existing Diseases: A big benefit of Group Medical Insurance Policy for employees is that the Policy can cover Pre-Existing Diseases without any waiting periods whereas an Individual Health Insurance Plan has a Waiting Period of 3-4 years for Pre-Existing Disease Coverage.
2. Maternity Coverage without Waiting Periods: Another benefit of a Group Mediclaim Insurance Policy is that it can offer Maternity Coverage without any waiting periods as well.
3. No Need for Medical Checkup: Employees can be covered under a Group Health Insurance Policy without any medical checkup whereas they may need to undergo a Medical Checkup under an Individual Health Insurance Policy.

here are many advantages to insuring your employees with a Group Health Insurance Policy:

1. A Group Mediclaim Policy for employees boosts their morale. Happy employees result in higher productivity which ultimately benefits the company.
2. It also helps attract better employees since they are aware that their medical expenses are taken care of with a good Corporate Health Insurance Plan should such a need arise.
3. Premium paid by the employers for a Group Mediclaim Policy is a Tax-Deductible Expense.

Most Insurance Companies require a group size of 50 employees for a Group Health Insurance Policy. Group Health Insurance Policy is also available for small businesses and some insurance companies do offer a GMC Policy for Employee Size of as little as 15 employees

You can read our detailed blogpost on Group Health Insurance Policy for Small Business.

The following groups can opt for a Group Health Insurance Policy:

1. A Company can take a Group Mediclaim Insurance Policy for its employees and their families
2. Registered Service Clubs can avail a Group Health insurance Policy for its Members
3. Credit Card Companies or Banks can opt for Group Health Insurance for its Members

Yes, Group Health Insurance Premiums are a Tax-Deductible Expense for the Company which pays the Premium. The Premiums Paid towards the Group Medical Insurance Policy reduce the taxable profits of the company and hence reduce the tax outgo as well.

The Cost of a Group Health Insurance Policy depends on the following factors:

1. Total Number of Lives (Employees and Family Members)
2. Age Distribution of Employees and their Family Members
3. Sum Insured
4. Features of Group Health Insurance Policy
5. Claims Experience in Expiring Policy

The leading Group Health Insurance Companies in India are:

1. SBI General Group Health Insurance Policy
2. New India Assurance Group Health Insurance Policy
3. ICICI Lombard Group Health Insurance Policy
4. GoDigit Group Health Insurance Policy
5. Tata AIG Group Health Insurance Policy