Corporate Health Insurance vs. Individual Plans

Medical emergencies can be stressful—not just mentally but financially as well. Whether you are single or have a family of your own, always be prepared to face a medical contingency. You may have a corporate health insurance policy or health cover from your current employer that includes your family members, but will it be adequate to meet the rising cost of quality healthcare when you least expect it. This is certainly not something you would want to learn from experience. Also, changing jobs would mean losing the cover for everybody unless the new employer, if any, promises to cover your family. 

Let’s look in detail why only corporate health insurance is not enough:

1. You lose corporate health insurance coverage if you leave the job

The most important reason to have additional health insurance coverage for yourself and your family members is that you may not stay with the same employer till retirement. Also, you cannot rule out the possibility of losing the job, in which case you will lose the cover too. If you change jobs, your new company may not offer health insurance coverage. If you leave the job to start your own business, you will have to make arrangements to get a health cover on your own. If there is a time gap between leaving your present job and joining a new organization, you will not have any corporate coverage during that period. You cannot say with certainty when you will get the next job, particularly during the recession. It can take any time, starting from a week to a few months, before you join another company. If you have personal insurance coverage, it will support you financially during a medical emergency irrespective of your employment status.

2. In most cases, corporate medical insurance is not available after retirement

You may stop working at some point in life due to old age, or after retirement. If you are planning to get the first insurance policy after you retire, it will be expensive. It may also happen that you will not get the coverage at all if the insurer thinks it to be risky to cover you. Many policies have a maximum age limit for applicants. Once you are above 50 years of age, most insurers expect you to raise a claim soon. This is because elderly people are more likely to suffer from chronic or severe health problems such as diabetes, high blood pressure, cancer, kidney, problems, and other pre-existing diseases. You will have to undergo a series of medical tests before you get the policy and pay a high amount of premium if an insurer decides to cover you. That is the reason why you should have a health insurance plan early in life when you are still working. It would be easy to get a policy and some insurers would offer lifetime renewal and no co-payment even when you are above 60 years of age.

3. A corporate mediclaim policy may have clauses such as deductible and co-payment

Deductibles and co-payment mean that you will have to pay a certain amount out of your pocket if you raise a claim. For example, sub-limits on hospitalization, diagnostic tests, and ambulance charges mean that you have to pay for part or all of these yourself once the treatment costs cross a certain limit. Some corporate plans may not cover post-operative treatment or home treatment. Your employer may stop providing health insurance cover or reduce the level of coverage to lower costs. When corporates cut down costs, employee benefits are often the first things that they reduce. These are the reasons why you should get an additional family floater policy or individual policies for your family members well in advance. You can get tax rebates under Section 80 D and free annual health check-ups for all members.

4. Inadequate coverage amount

The sum insured available under a corporate health insurance policy is usually insufficient to deal with medical inflation. Medical inflation or a rise in hospitalization and treatment costs take place every year. Apart from offering an inadequate amount, your employer can have several conditions attached to the cover. They may not cover all your dependent family members. Your employer will rarely revise the corporate plan to keep up with the rising costs. Even if you are working with the same employer for years, your health insurance coverage may remain the same. An accident or severe illness can drain your savings. Bypass surgery, organ transplant etc. are very expensive and hospitalization in metro cities cost much higher compared to small towns. To deal with these you require an independent health policy that can cover everyone under a family floater with sufficient sum insured.

In conclusion

A corporate health policy offered by your employer may cover your family members but may not be sufficient to deal with high medical costs. Also, you lose the cover once you retire or change jobs. On the other hand, a regular health insurance policy will offer you a range of coverage amounts and provide additional advantages.
The premium that you pay towards your health insurance policy is also tax-deductible under Section 80D of the Income Tax Act. So, you can be stress-free, financially protected and save more on your earnings.