Is Company Provided Health Cover Sufficient?
If you want value for what you pay , then do it at the right time. There are many young people these days who opt for early health & life insurance. This is a smarter move as it comes cheap if started early. Each generation of employees are getting smarter than the previous .
Industry experts say that companies get a group insurance cover only to cover their liabilities but not to cover your responsibilities.
A report by ICICI Lombard revealed that as many as 76% of insurance policies offered by employers have co-pay and room-rent limiting clauses.
The most often asked question is ‘ how much cover is sufficient ‘ . Experts would often suggest a cover of Rs.5 lakh but in complex cases it’s advisable to use a calculator:
http://www.livemint.com/Object/AyC5yoqIYTwF87m521nEsL/healthinsurance.html
In addition to the amount to be decided ,there are some critical points to be considered :
Co-payment – Is the employer making you pay in addition to their contribution. What percentage of this is your contribution.
Employment status: Are you a permanent employee , will you be switching jobs soon , are you due for retirement , most policies under group cover are not portable. You must look at the fine print before deciding to start a separate policy.
Room rent restrictions : Usually group health covers have a room rent capped to 1% of the amount covered . Will this restriction compel you to opt for an additional cover. If room rent is not sufficient , you will have to shell out the additional amount . If you opt for single occupancy or a shared room is mostly a personal choice.
Dependents: As in most group covers , a family of four is insured. If there are parents as additional dependents , then an extra cover has to be bought or taken as a separate cover. The additional cost for elderly people will cost more than for your age group. A family floater may be included but this may not suffice if more than one member gets hospitalised. Although rare its not impossible.
Add on : Most companies offer health cover as a job perk. In such cases its not compulsory for them to cover for the whole family. Also the terms and conditions could vary any time the employer chooses. If they are offering this to you as a perk its important to not depend on it fully.
Portability : In cases of group covers, there is no portability . No benefits accrued can be carried over to the next insurer. However , for individual policies its easily portable .
Post retirement / job breaks: Since these policies are only valid until your work tenure lasts , once there is a retirement or break coming up you need to get an individual health insurance done. If this is at a stage of retirement then the premiums are much higher and so will be your dependents premium . Its not wise to leave a health insurance unpaid if there is a break between jobs either. Such cases its inevitable that you get your own health insurance.
Terms & conditions : Your employer may choose to change the provider or terms and conditions as per cost advantages. In order to reduce costs they might chose a bare minimum policy which may not even cover 50% of the ailments . You have to be abreast of the changes they make and be well versed with the fine print.
Exclusions and restrictions under group health cover :
You need to take a closer look at the policy document and its wordings. This is because going deeper into these clauses will make you realise that there are multiple exclusions in a group Health insurance policy than is otherwise highlighted by your insurer or your agent. You need to delve deeper and ask such critical questions to your chosen insurer or agent before you make a decision to avail insurance policy
These are the compelling reasons that you have to consider before relying on a group health cover.
- Waiting time :
Group health policies carry a short waiting period for admission of a new claim. This waiting period is applicable only in the first year of the policy unless the policy suffers a break in premium payment. It is also applicable for the pre-existing illnesses of the employees.
However, certain insurers keep a waiting period clause for the pre-existing illnesses which is applicable only if the policy has been renewed on time and been functional for at least 2 years.
Moreover, there is also waiting period applied for making the claim in certain surgeries like removal of tonsils. Only after the end of the waiting period, the claim can be made in such a case.
Existence of waiting period means that the employee suffering from any of these illnesses would have to continue his job at the same company for the period till which the waiting period exists. Therefore, employees needing special care should check with the employer about the cover.
2.No Cover for AYUSH Treatments
Medical expenses of only allopathic treatments are generally covered in a Group mediclaim policy. Treatments of naturopathy, homeopathy and immunizations or vaccinations are generally not covered in the health policies by most insurers. Any expenses incurred for weight loss are not covered in Group Health policy.
- Other Exclusions: There may be certain specified exclusions in the policy wordings
- Self-harm/injury.
- Injuries caused due to any involvement in criminal activity.
- Injury incurred due to being victim of a criminal act.
- AIDS or HIV treatment is not covered
- Cosmetic and plastic surgery unless suggested medically are not covered under the group mediclaim policies offered by most insurers.
- No dental treatments
- Some common exclusions in group insurance across companies are:
- Long-Term Care (99%)
- Cosmetic Surgery (92%)
- Adult Dental Services (89%)
- Weight Loss Program (88%)
- Acupuncture (84%)
- Routine Foot Care (72%)
- Infertility Treatment (67%)
- Private Nursing (67%)
- Adult Eye Exam (61%)
- Weight Loss Surgery (59%)
An Example of ICICI Lombard Health Insurance policy for Rs. 2 lakhs:
Exclusions valid for the first 2 Years
Treatment of the following diseases/illness/ailments:
- Cataract*
- Benign Prostatic Hypertrophy
- Myomectomy, Hysterectomy unless because of malignancy
- Hernia, Hydrocele
- Fissures & / or Fistula in Anus, hemorrhoids/Piles
- Arthritis, Gout, Rheumatism and spinal disorders
- Joint replacement, unless due to accident
- Sinusitis and related disorders
- Stone in the urinary and biliary systems
- Dilatation & Curettage, Endometriosis
- All types of Skin and all internal tumors / cysts / nodules / polyps of any kind, including breast lumps, unless malignant
- Dialysis required for chronic renal failure
- Surgery on tonsils, adenoids and sinuses
- Gastric and duodenal erosions & ulcers
- Deviated Nasal Septum
- Varicose Veins/Varicose Ulcers
The point again here is – if you are exposed to risk , you need to cover it. That is prudent risk management and when this risk is towards health ; any delay or lethargy will hit hardest .
It is always better to have individual health independent of company provided cover since one is not dependent on company linked conditions terms and rules
Sneha Ramammurthy
Dilzer Consultants Pvt Ltd
2 June 2017