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Coverages of Group Health Insurance Plan

Group health insurance is a plan that is offered to the employees by their employers. According to the dictionary of Business terms, group health insurance provides “coverage underwritten on members of a natural group, such as employees of a particular business, union, association or employer group. Each employee is entitled to benefits for hospital room and board, surgeon and physician fees, and miscellaneous medical expenses.”

The policy includes cover for all the employees in one organization. The introduction of this plan starts to attract valuable employees to join the team. It is a valuable offer.

Features of Group Health Insurance:

  1. Cashless facilities

On admission to a hospital, you need to intimate your insurer about the same. After passing the information, the insurance company will take control of the expenses as you have paid your premiums and are under coverage. If the hospital you have got admission to is in-network with the insurance company, then you can enjoy the benefit of cashless treatment. On the other hand, if the hospital is not in the network of the insurer, then you will have to claim reimbursement of the costs paid.

  1. Medical screening    

You do not need to undergo a medical test or check-up before getting coverage. The test is optional. However, it is advisable to undergo a comprehensive medicaltest for a better understanding of your health and also that is useful when claims get disputed in the future.

  1. Health Check-ups

After getting yourself covered it is essential to take good care of your health. For the same reason, insurance companies provide annual health check-up facilities. The company allows you to enjoy a free health check-up if you have not filed a claim for four consecutive years.

  1. Tax Benefits

It needs to be noted that in the case of group insurance plans where the employer pays the premium, the employee does not get any tax benefit under Section 80D of the Income Tax Act. However, for the employer, there is a tax shield because this payment of premium is an admissible expense for tax purposes. 

  1. Premium

The premium for a group health insurance is comparatively lower than an individual or family plan. The reason for the lower premium is that the employer purchases such policies in bulk and, therefore, they enjoy the benefit of bulk discounts on the policy. The premium payable for group health insurance is much cheaper than that of an individual health insurance.

  1. Goodwill

A company offering group health insurance is viewed as a company that is employee friendly. The provision of group health insurance is beneficial to the personal well-being of employees. This builds a better name for your organization as a whole.

  1. Minimum number of participants

The minimum number of participants to qualify for group health insurance is 20. The minimum participants can be your employees or even include the family members of the employee.

Why Buy Group Health Insurance Plan?

To look after the well being of their employees, the employer purchases such plans. Group health insurance is an essential part of the package given to a fresh joinee in the organization. Having such a plan to cover the employees also helps the company to retain good workers.


  1. Pre-existing illnesses–  

A group health insurance provides coverage to pre-existing diseases from day one. No waiting period needs to be served.

  1. Add ons –

A person participating in such a policy can request the employer to cover their spouse/ wife and kids. The process of including your family under the same cover is easy, but the end decisions depend on the employer.

  1. Maternity cover –

If the employer’s wife is pregnant and under cover of the same insurance plan then, the employee can file a claim amount. The plan only covers hospitalization and delivery costs. Prenatal and post-natal expenses are not coverable under the insurance plan.

  1. Pre- and post-hospitalization –

Pre-hospitalization expenses such as tests, check-ups are given coverage. Post hospitalizations such as medicines, regular appointments, doctor consultation fees are under coverage.

  1. In-patient hospitalization –

While being admitted to the hospital, the room rent, medical equipment, electrical consumption, and more are the expenses needing coverage. The insurance provider reimburses the costs. Day-care procedures are also covered.

  1. Chronic illnesses –

Chronic illnesses such as arthritis, diabetes are also covered in a group health insurance policy. Most of the insurances cover these conditions but, yet the final decision or coverage offered differs from one organization to another.

  1. Senior citizens –

Senior citizens are provided coverage but only with the specific permission of the employer. Senior citizens with a critical illness such as cancer are also eligible for coverage.

How group health insurance works

  1. The employer will research and choose an adequate plan for the employees.
  2. Pitching of the plan takes place.
  3. The plan will be valid only if at least 70% of the employees agree to the terms and conditions.
  4. The plan is then confirmed under the name of the company.

Who Buys Group Health Insurance

1) Small start-ups –

Offering group health coverage attracts job-seekers The minimum eligibility of 20 participants needs to be fulfilled for startups to offer insurance. Although some insurance providers make an exception based on the idea, management, and mission, and vision of your organization.

2) Developing companies –

Providing such plans, will make employees feel happy and wanted. This will help in the long run.

3) Large scale organizations –

It is a belief that large companies do not value their employees and make them feel unwanted. Providing a group health insurance helps the employer to change your perspective for the company and thus invest or purchase more of their products. The cover of such a plan will also keep the employee motivated and give them a sense of belonging.

4) Communities –

A group of like-minded people wishing to purchase health cover at a lower cost can subscribe to such a plan. This helps to get coverage and know each other more.

Group Health Insurance Coverage

Is corporate health insurance cheaper than an individual health insurance policy?

Corporate insurance is also known as group health insurance. The plan is provided to the employees by the employer. Individual health insurance is the plan purchased by you for yourself. The premium payable for individual health insurance is higher than that of group policies. The risk for an individual plan is higher, and so, the premiums are higher too. In group health insurance, the risk is divided among the entire group, and that is why the premium is lower here. The premiums are cheaper, and the coverage is also low. Whereas the premium for individual insurance is higher, and the cover is vast.

How do small businesses get covered under group health insurance?

A small organization or start-up begins with a minimum number of employees. With time and expansion, the business hires more employees. The minimum criteria for purchasing a group health insurance plan is 20 members. The company at the early stages might not have that many employees and, so, the hired employers are advised to add their families to the plan this will help fulfill the criterion. A broker can also be helpful in such a situation. A broker can manage to get your organization a plan by charging a commission. The broker will also help you decide the best policy by making a spreadsheet of the most suitable plans, as per your requirement.

Who pays the premium for group health insurance?

Premium is the amount of money payable for getting cover under an insurance plan. The premium for individual plans is more expensive than that of group policies. The employer provides group health insurance to the employees. The plan is in the name of the company and not any individual. The premium is payable by the employer or with the employee this means, the amount can be paid solely by the employer or the employee will also contribute to the premium. The plan is pre-decided of how the payment will be made. For example, company Z provides group health insurance to their employees on the condition that 80% of the premium will be paid by the employer, while the remaining 20% will be payable by the employee. The plan will be confirmed only if all the employees agree to this. The amount payable by the employee is directly deducted from their salary amount.

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