Understanding Corporate Health Insurance: A Complete Guide

Types of corporate health insurance plans

Businesses offer various types of corporate health insurance policies based on their size, budget, and employee needs. Here are the most common types:

1. Group health insurance: It is a corporate mediclaim policy covering hospitalisation expenses. It often includes spouse, children and sometimes parents.
2. Top-up health insurance: It provides additional coverage over and above the base insurance policy. It is useful when hospital bills exceed the basic sum insured.
3. Critical illness insurance: Covers life-threatening diseases like cancer, heart conditions and kidney failure, providing a lump sum payout upon diagnosis.
4. Personal accident insurance: Covers accidental injuries, disability and death.
5. Maternity cover: Includes expenses related to pregnancy, delivery and postnatal care. This is often included under corporate health insurance
6. OPD and wellness benefits: Some policies include outpatient expenses, doctor consultations and wellness programmes. It aims to promote preventive healthcare.

How a corporate health insurance plan differs from a regular health insurance plan?

Unlike individual health insurance, where the policyholder selects the coverage and benefits, corporate health insurance policy is provided by the employer and covers all eligible workers under a single policy. Here’s how they differ:

How does it work?

A corporate health insurance policy operates through an agreement between the employer and the insurance provider. Here’s how it functions:

1. The employer selects a corporate insurance policy for employees with a predefined sum insured and benefits.
2. Employees are automatically enrolled under this policy, covering medical expenses as per the plan.
3. Employees can avail of cashless treatments at network hospitals or apply for reimbursement.
4. The insurer settles claims directly with hospitals or reimburses the employee based on the policy terms.
5. Coverage remains active as long as the employee is part of the company.
6. Some policies allow employees to convert their corporate plans into individual plans when they leave the organisation.

Advantages of corporate health insurance

The benefits of corporate health insurance for employers and employees are:

1. Cost-free for employees: Employees don’t have to pay premiums since the employer covers them.
2. Instant coverage: Unlike individual policies, corporate insurance has no waiting period for pre-existing diseases.
3. Covers family members: Many employers extend coverage to dependents of the workers.
4. Cashless hospitalisation: Employees can avail of treatment at network hospitals without upfront payments.
5. Enhances employee retention: A strong corporate health insurance policy makes an organisation more attractive to job seekers.
6. Tax benefits for employers: Companies get tax deductions on premiums paid for employee insurance.
7. Comprehensive cover: Some policies include additional benefits like OPD cover, mental health consultations and alternative treatments.
8. No medical tests required: Employees don’t need to undergo medical tests to be covered under the policy.

Disadvantages of corporate health insurance

Some of the drawbacks of corporate health insurance are:

1. Limited coverage: The sum insured may not be sufficient to cover major medical treatments.
2. Policy ends with job: Coverage ceases once the employee leaves the company.
3. No customisation: Employees cannot tailor their policy based on personal healthcare needs.
4. Dependence on employer’s choice: The employer decides the provider and benefits, leaving employees with no control.
5. Not a substitute for individual insurance: Employees should still consider a personal health insurance plan for long-term security.
6. Limited add-on options: Unlike personal insurance plans, which offer a range of riders, corporate plans have restricted add-ons.
7. Network hospital limitations: Employees may need to seek treatment at empanelled hospitals to avail of cashless benefits.

Should you rely only on corporate health insurance?

While corporate health insurance offers many benefits, it’s not a standalone solution. Here’s why having an individual policy is necessary:

• Job loss or change: Your coverage ends when you leave your job, leaving you unprotected.
• Limited sum insured: Most corporate policies provide basic coverage, which may not be enough in case of major surgeries or critical illnesses.
• No lifetime coverage: Individual health policies ensure continued protection even after retirement.
• More control over benefits: With an individual policy, you can choose add-ons and tailor the coverage as per your needs.

Conclusion

If you’re an employer offering a solid corporate insurance policy for employees, it can boost workplace morale and retention. While the policy offers several advantages, it has its share of shortcomings also. Employees may assess their healthcare needs and consider an individual plan for comprehensive coverage if needed.

Disclaimer: The information provided in this blog is for educational and informational purposes only. It is advised to verify the currency and relevance of the data and information before taking any major steps. Please read the sales brochure / policy wordings carefully for detailed information about on risk factors, terms, conditions and exclusions. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.