A group health insurance policy is a cost-effective option for insuring a group of individuals under a single plan. The policy is an optimal employee benefits solution opted for by employers to provide their employees with the all-too-important health insurance coverage. Other registered groups like banks, clubs, associations, trade unions, etc. can also opt for a group health plan for offering health insurance to their members.
The group health plan is offered under one Master Policy valid for one year. After the year is over, the plan can be renewed for as long as the group wants.
Though group health insurance can offer cost-effective coverage to its members, there are certain nuances of the plan that you should know about. Here are five such nuances –
The concept of ‘one size fits all’
The owner or the head of the group usually buys the group health insurance plan. For instance, in the case of an employer-employee group, the HR pays the premium. Similarly, for trade unions, the head of the union buys the policy.
The members do not have a say in the coverage or the sum insured. The head of the group picks the policy as it deems fit and all members get the same coverage.
The policy, thus, is not tailor-made for the needs of each of the insured members and offers generic coverage to all.
Coverage limits
Group insurance plans might have a limited sum insured levels for each insured member. As such, there might be coverage limitations, especially in the case of room rent. Room rent limit restricts hospitalisation coverage and might prove counterproductive in a medical emergency.
Similarly, even if the group health plan offers coverage for alternative treatments, domiciliary treatments, organ donor treatments, etc., there might be coverage limits and you might not get covered optimally.
Maximum coverage age for dependent parents
Many group health insurance plans allow their members to extend the coverage to their dependents, including parents. However, when parents are covered, there might be a maximum coverage age. Group health plans might not allow coverage to your parents beyond a certain age.
No concept of no claim bonus
Under independent health insurance plans, you earn a no claim bonus if you don’t make a claim in your policy. This no claim bonus can reward you with a free increase in the sum insured, a premium discount or other wellness related benefits. In group health insurance plans, however, this feature is absent.
Under group plans, even though you do not make a health insurance claim in the policy, you would not enjoy any benefit like the enhancement of your coverage or a premium discount on renewal.
No continuity benefits
Group health insurance plans are effective till the time that you are a member of the group. Once you leave the group, the coverage automatically ceases. While most group plans allow you the option to convert the group coverage to an independent one, the group’s head does not bother with the same. Even you might not be aware of the protocol for converting the plan.
These nuances throw a different light on group health insurance schemes. The scheme has various benefits. These drawbacks cannot be ignored. If you need a tailor-made health plan which fulfils your coverage requirements, it is better to opt for an independent policy.
An independent indemnity-oriented health insurance policy serves the following purposes –
- It allows you to pick the coverage features that you need.
- You can enhance the scope of coverage through optional riders that are available with most plans
- You might get a wider scope of coverage compared to group health plans.
- In personal health plans, you have the option to choose without sub-limits or limits on other coverage features.
- All individual health plans offer lifelong renewability. Thus, the coverage would not depend on your association with the group. You can renew it as long as you keep paying the premiums.
- You can avail yourself of lifelong renewability for your parents as well.
- Individual health plans offer no-claim bonuses and annual health check-ups.
If your employer or any other group is providing you with the benefit of group health insurance, you can simply enjoy the coverage. However, remember to supplement it with an independent health insurance plan depending on your coverage needs and enjoy optimal coverage. To know check out http://blog.oneassure.in