What is Group Health Insurance and how can it help your business?

As an entrepreneur, it is of utmost importance that you get the best employees and take concrete steps beneficial for your employees so as to ensure that they remain productive for the business. Getting group health insurance and group medical insurance for them would be a great idea to do just that.

In order to make sure that the employees remain productive for the organization, most employers often offer certain incentives to their employees. These might include health insurance, monthly credit allowance, car transport as well as several other things. But health insurance remains the most attractive factor out of all these. Providing health insurance ensures that an employee is able to take care of himself as well as his family without having to worry about rising medical bills.

However, ensuring every single employee with different health insurance packages becomes extremely expensive and time-consuming for an entrepreneur, which is the reason why any business that is looking to insure its employees, opt either for group health insurance or group medical insurance. There are several advantages of group health insurance for business entrepreneurs.

The most obvious benefit that comes with group health insurance is its cost effectiveness. The costs that would be charged for individually insuring every employee would be very high as compared to getting a group health insurance package. However, when it comes to group health insurance, the costs are significantly low and thus become a highly affordable and the most preferred option to many business employees.

Secondly, you can easily tailor group medical insurance to meet your needs and requirements. There is an option available in group health insurance which lets you choose the insurance types per your requirements, and provide only those health care solutions to your employees that you feel are within you financial grasp. Several other flexible options are also available in a group medical insurance. These include the popular Six Week Option, the NCD Option as well as various excess options.

The Six Week Option only provides advantages for in-patient treatment, out-patient surgical procedures, day-patient treatment in case the NHS fails to provide this treatment within six weeks, starting from the week on which the application for treatment was submitted. This is applicable to each and every admission or surgical procedure, be it in-patient, out-patient or day-patient treatment. This denotes that the policy does not cover emergency treatments. If there is a life threatening condition that needs to be treated immediately, the NHS takes notice and provides treatment within six weeks.

The other option available is the NCD option. This allows entrepreneurs to let their employees know the discount level that the company is providing to them. Then, it is up to the employee to decide whether they want to opt for this group health medical insurance or not.

Group Insurance Schemes

Employee Benefits typically refers to retirement plans, health insurance, life insurance, accident & disability insurance as far as the contribution of insurance is concerned.

There are several more Employee Benefits that companies offer ranging from vacations, company cars, stock options, education loans support, and so on. However, while such perquisites are manageable by Human Resources and Management in small and medium companies fairly easily, one of the key challenges is in providing Employee Benefits to cover Insurance schemes to employee groups which are small in size. The reason for this is typically as a result of the type of products that are offered to employer groups by Insurance companies in India and much the world over.

The most popular group schemes in the market are as follows:

·         Group Medical Insurance – covers employees for fixed sums against hospitalization costs and can be extended to cover spouses, children, and dependent parents)

·         Group Term Insurance – covers employees to provide death benefits to the employee’s family/nominee for a fixed sum which can be based on salary, graded slabs or a flat sum across employees.

·         Group Personal Accident Insurance – similar to Group Term, this plan also covers employees to provide death benefit but only in the case of Accidental Death. A group accident plan also provides disability benefits as a result of the accident.

·         Group Travel Insurance – As a lot of employers in India especially in the IT sector have frequent travelers to international client locations, such a plan makes it simple for HR to cover their employees with international medical insurance and also makes it very cost-effective.

·         Group Gratuity – As this a fixed sum factored by employers and mandated by the law, the Gratuity scheme also provides for a life cover linked to the amount of money due. In the event of an employee dying, the dependents are due to be paid the Gratuity due even if less than 5 years and this can become a serious burden for employers. Hence it is advisable to manage the money as well as life protection from insurers.

Group Insurance Schemes provided by Insurers are what employers in India buy to cover their employee base. In ensuring groups, employers get favorable rates bundled with unique services and features which are by and large not available to small groups.  The catch is that most of these schemes can only cover groups exceeding 20-25 persons. As a result, small employers end up not covering their employees as they are unable to get covered under traditional group plans.

While the cost variance is marginal for small groups in going for group schemes versus individual plans to cover their employees, typically small employers do not have the bandwidth to keep track and keep seeking insurance covers on a one-on-one basis for their recruits. The bottom line, the lack of benefits can end up becoming a serious deterrent for hiring and retaining good employees, especially those who come from larger corporate where they have enjoyed great benefits.

Till such time as a strong online solution is presented, the small employer group will always find it a challenge to provide competitive benefits to their employees. While the cost to the company will remain a negligible component to overall costs, the value it can bring in the event of adversity will go a long way in creating a positive image of the company and its promoters and securing the well-being of their employees.

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