Do you have a ‘Corporate Health’ insurance policy’ - Find out if it is enough!

Features of a Corporate Health Insurance Policy:

1. A Corporate Health Insurance Plan covers either self (employee) or self, spouse, children, dependent parents.
2. In case of a Corporate of a Group Health policy, employers pay the premium.
3. Unlike other health insurance plans, one can get cashless hospitalisation benefits at the network hospitals of an insurer.
4. Group Health Insurance Policy provides coverage to the fees of medical practitioners/ consultants, Doctors, the pre-hospitalization and post-hospitalization expenses, alongside the domiciliary and day-care expenses.
5. Certain ancillary charges like ambulance charges are also covered under these types of policies
6. Some of the policies have free Annual Health check-ups for employees.
7. Corporate Health Insurance Plans are known to cover pre-existing diseases and maternity expenses.

Let us understand if Corporate Health Insurance Policy provides enough coverage?

While Corporate Health Insurance benefits both employees and employers. This does not mean that the coverages of corporate health insurance is adequate to secure one's self and family related health expenses. Across multiple medical research reports what is evident is that medical inflation is on the rise, and in order to combat unforeseen eventualities additional coverage is a must have now more than ever. Let us understand why the Corporate Health Policy Coverage might not be enough, and why is it only wise that one has a separate health insurance policy:

Sum Insured of a Corporate Health Insurance Policy is Low:

Multiple comparative studies have confirmed that a Corporate Health Insurance Policy have a lower sum insured than an exclusive Individual or Family Floater Health Insurance Policy. Corporate Health Insurance Plans offer sum insured depending on factors such as location- metro / non metro, employee grade. Noticeably the sum insured may not be enough in case of hospitalization for a severe ailment or major accident.

Situation:

Let's consider an example of Michael who is employed with a well renowned financial institution. He gets a health insurance coverage for himself and his family of Rs 3, 00,000. Michael has 4 dependents, his spouse, 1 child, and his parents. At the time when the first wave of COVID-19 hit India, his family was infected, his wife and parents required urgent medical attention and had to be hospitalized. The total medical expenses for the three of them reached almost 9 Lakhs, which is 3 times of his company coverage. Michael has always been a meticulous planner when it came to financial and risk planning. He had bought separate Health Insurance Policies for his parents with a sum insured of Rs 6 Lakhs each. He was able to manage the expenses for his wife's hospitalization through the insurance provided by his company.

However, Michael realized the importance of having additional policies with adequate insurance cover because, in the absence of his parent's policies, he would have had to rely on borrowings from banks and or others. He has now decided to buy a Family Floater Health Insurance Policy for himself, his wife, and his child.

Current Employment status:

Corporate Health Insurance Policies are known to provide health benefits as long as one is employed with the organization. An employee's average duration within an organization is 4 to 5 years. So, if one moves out from their existing employer, for any specific reason, they are no longer entitled to the benefits of the corporate health insurance policy. On the contrary, an Individual Health Insurance Policy will provide a coverage irrespective of the employment status, as long as the premiums are paid on time.

Post-Retirement Status:

As noted above, one can avail a health insurance coverage from their company till the time they are employed within the same organisation. Having said that, one will have to buy a separate health insurance policy after their retirement. In such scenarios getting a health insurance can be a painful exercise beyond a certain age. Before issuance of a policy, there will be mandatory medical tests and certain pre-existing diseases which will be considered as high-risk profiles and an insurer will not offer a policy under such circumstances. Where somehow one is able to get an insurance coverage, the pre-existing diseases may not be covered, one of the major reasons for hospitalisation of senior citizens.

Corporate Terms and Conditions May Change:

The government has not made it compulsory for organizations to offer health insurance to their employees, and it is entirely an employers' discretion. Hence, the organisation can make changes to the policy terms and conditions offered or decide to altogether stop the insurance coverage without any legal implications.

Coverage for dependent members:

A Corporate Health Insurance Policy may or may not offer coverage to the dependents of an employee in some cases. Hence, it is crucial to be fully aware of the policy terms and conditions well in advance. In case of a Family Floater Health Insurance Policy, one can opt for coverages for their dependent parents, spouse and children or even choose from different policies as per their health needs and requirements. An exclusive policy for Senior Citizens for example is suited for elderly parents is a good option as it offers additional benefits to them.

Clauses around Co-Pay:

Most Group Health Insurance Plans or Corporate Health insurance policy will have a co-pay clause included. Co-pay is a fixed percentage/amount of a claim that a policyholder is required to pay from their own pocket. The insurance company decides to pay the co-pay amount, which varies for different medical services. For example, if one has to visit a specialist for a specific illness, and the co-pay amount mentioned in the policy for a consultation is Rs 2,000, In this case, an individual will have to pay Rs 2,000 for the consultation with the specialist.

Limit on Room-rent:

The room-rent capping on most Group Health Insurance Plans is usually very low, and the insured has to pay about 50% to 60% of the room rent on their own, which can be very high depending on the days one was hospitalized for.

Inferences:

1. While It is a perk to have Corporate Health Insurance Coverage, having an Individual Health Plan is a must have.
2. In a rare case scenario, if an employer offers, a larger sum insured and one does not have any dependent members, then one can consider delaying the decision of buying an additional personal policy.
3. Note that an organization will provide for coverage only until employment, and they have the right to stop offering benefits at any point in time.
4. Our requirements change with different life stages, recommendation will be to review the health insurance cover every 3 years to ensure one has adequate coverage.
5. Having two or more policies, provides an option to choose from the policies at a point of medical emergency