Six ways group health insurance supports financial stability for employees
Group health insurance ensures financial stability for employees in the following ways:
- Covers hospitalisation
Medical inflation can dent your savings in case of unexpected medical expenses. If you are not financially prepared, you can end up spending a major chunk of your savings on hospital bills. Group health insurance ensures financial stability for employees with the best medical care and treatment. The plan covers hospitalisation, surgeries, prescription medications, diagnostic tests, etc.
- Reduces out-of-pocket expenses
Group insurance not only covers the medical costs of employees but also reduces their out-of-pocket expenses regarding premiums. In individual health plans, the policyholder has to pay a higher premium because it covers only one person. But, in group health plans, the premium is much lower as the risk is shared among a group of people. Some employers also pay the entire premium, which means the employee doesn’t have to pay anything. In some organisations, the premium is shared between the employer and employee, which is again affordable.
- No waiting period
Individual health insurance plans come with waiting periods for pre-existing diseases, specific procedures and maternity. During the waiting period, you cannot file any claims for medical expenses. For instance, a pre-existing disease has a waiting period of 1 to 3 years. If you file any claim for treatment related to a pre-existing ailment like diabetes before completing the waiting period, you have to pay from your pocket. In group health insurance, there is no waiting period. Employees are offered coverage from the first day.
- Offer coverage to family
Many group health insurance plans cover employee’s dependents like parents, spouse and children, ensuring they are financially safeguarded against medical emergencies.
- Provides cashless treatments
With cashless treatments, the employees need not worry about upfront payments. In case of emergency hospitalisation, you have to inform the insurer as soon as possible, and in case of a planned treatment, you must inform the insurer at least 2-3 days prior to admission. This will ensure hassle-free settlement of claims. However, for cashless insurance, you must get admitted to a network hospital of the insurance provider.
- Better financial planning
When the medical expenses are covered, employees can plan their finances on investments which can give good returns.
Features of group health insurance
Some of the key features of group insurance are:
- Uniform coverage: In group health insurance, all employees of a company or organisation are offered the same level of coverage. However, they have the option to upgrade the policy, for which they may have to pay an extra premium.
- Affordable: Since the risk is shared among a group of people, the insurer charges a lower premium than for individual health plans. The premium of group health insurance is also shared between the employer and employee, making it affordable for the employees.
- Only for businesses: Individuals cannot buy group health insurance. It is meant for employers to cover their employees, who may contribute to the premium through payroll deductions.
Does group health insurance benefit employers?
Yes, businesses also benefit from providing group health insurance to their employees. Here’s how:
- Improves employee morale and well-being, leading to higher productivity
- Helps attract and retain the best talent
- Enhances employee engagement and commitment towards the company’s goals
- Employers can claim a tax deduction on the premium paid towards group health insurance plans
Conclusion
Group health insurance not only provides financial protection to employees against medical expenses but also plays a crucial role in enhancing employee loyalty and satisfaction. Employers also gain from group health plans as it helps to attract and retain the best talents in the industry. So, it is a win-win situation for both employers and employees.