what is group mediclaim for employees

What is Group Mediclaim for Employees?

Mediclaim is preferable to Mediclaim insurance. Such a policy is applicable for covering small to medium-sized illnesses or accidents for an individual. A Mediclaim plan reimburses the expenses incurred by an individual on hospitalization. It helps protect an individual from the medical costs that may arise at some time in the future.

Group Mediclaim Policy

A group Mediclaim policy is a policy that protects individuals belonging to a particular group from various expenses in the event of emergencies. The main participants of a group policy are organizations and this could include employees of a company or members of a cooperative society or similar such organizations. 

A group Mediclaim policy is mainly purchased by employers for their employees and the plan is employer-sponsored.

Many organizations in India offer employee cover plans while some pre-decide a ratio of co-payment whereas, in some cases, the entire premium is borne by the employer. The Insurance Regulatory and Development Authority of India (IRDAI) sets the standards and ground rules pertaining to the basis on which a group of people can purchase such a plan. The similar criterion is also used by some credit card companies for its card holders as well as some bank account holders, belonging to the same social group, and more.

Features of Group Mediclaim policies:

The features of a group insurance plan are similar to a basic health insurance plan. Some of the features are:

In-patient hospitalization

If one member of the group is given admission to a hospital, he/she can claim under their group insurance plan. It means the insured does not need to pay money out of their pocket, thus helping in the reduction of financial stress.

Pre and post-hospitalization

Pre-hospitalization expenses are expenses like blood tests, x-rays, lab tests etc which helps the doctors to understand your health condition, pinpoint the problem and accordingly choose the best possible treatment mode. 

Post-hospitalization expenses are those which are incurred for prescribed medicines and doctor’s appointments for understanding the progress of the patient after the medication is administered.

Ambulance charges

When the insured is given admission to a hospital without doctor’s prescription, as in case of an emergency, ambulance service is the most efficient vehicle available to reach the hospital as soon as possible. As a result, the insurance company considers emergency ambulance service charges also claimable but not in every case. Day-care procedures are also under the coverage of a group insurance plan.

Payment mode

The insurance plan offers cashless and reimbursement treatment. It usually depends on the hospital one gets admitted into. If the hospital is within the network of the insurance company then one can easily enjoy the benefit of cashless treatment. On the other hand, one will have to opt for the reimbursement method.

Name of the policy

A group insurance plan usually consists of a selective name on the policy. It means that, in the case of an employer-employee plan, the policy is most likely to be in the name of the organization. Whereas in general terms, if a group of people having a common criterion can name the group as they wish.

Number of members

The minimum number of members required for purchasing a group Mediclaim policy is 20. IRDAI on 19 January 2016 directed the number of members a group plan shall consist of. 

Maternity cover

A Group insurance plan provides coverage for maternity expenses which includes costs related to labour, delivery charges, coverage to the newborn baby, vaccinations etc.

Unique features of group Mediclaim policy

The unique features of a group Mediclaim policy are asunder.

a) Pre-existing diseases

Under a group insurance plan, pre-existing diseases such as blood pressure, diabetes, etc. are covered since day one. It means the employee does not need to serve any waiting period to receive coverage for these diseases. Expenses related to pre-existing diseases are claimable.

b) Premium

The premium payable for a group Mediclaim plan is comparatively cheaper than that of an individual policy. The premium for a group policy is either entirely payable by the employer, or the employer pre-decides the co-payment method; either ways the burden on the employee is substantially reduced. At times, a small percentage is to be borne by the employee while paying premiums.

c) Check-ups

No medical screening is required for an individual to undergo before purchasing a group policy; this is because such a plan covers pre-existing disease since day one. A group insurance plan offers health check-ups as a bonus if no claim has been made in the previous year.

d) Add-ons

A group plan allows the employee to add their spouse, two kids, and the employee’s parents too. If the plan is employer-sponsored, to add dependents or blood relatives, the employee needs to pay a premium for their coverage. Although adding people to the policy is not difficult.

e) Tax exemption

The plan allows the organization purchasing such a plan to enjoy tax exemption under section 80D under the Income Tax Act, 1961.

f) Diversification – of risk

As the number of members covered among the group Mediclaim is vast, it helps to diversify the risk and thus the premium on the plan is lower compared to personal insurance plans.

g) Company’s reputation

A company providing a group Mediclaim plan enjoys the benefit of having a better goodwill valuation, as it indicates to the general public that the organization values its employees and thus take good care of them. It can be morale booster for the employees.

h) Waiting period

As pre-existing diseases are covered by the insurance company for the employees since day-1, no waiting period needs to be served. Compared to personal policies, group Mediclaim plans have to serve minimal or no waiting period.

Drawbacks of a Group Mediclaim Plan

As much as the group plan sounds to be a great idea, there are some shortcomings you must be familiar with.

a) Not meant for retirement

An organization provides coverage to an individual only till they are working for the firm. Of course, in very rare cases the employer provides coverage to an individual post-retirement. The plan cannot be counted upon for long term coverage. A plan like a group Mediclaim works only if the individual has a back-up option.

b) No lump-sum pay-out

The biggest drawback of group insurance plans is that when a person leaves the organization or is removed from the organization, then they do not continue to receive the benefits of insurance cover. In cases where the employee was involved in co-payment of the premium also, the company is not bound to repay any money in lump sum or instalments for the same. The premium paid is not transferable to the next company and plan that another organization will be providing.

c) Small-scale organizations

It is very difficult for a small organization or a start-up to subscribe to a group insurance policy as the company does not have the minimum number of employees to purchase such a plan. As the organization has just started off, the insurance company finds it difficult to provide plans and thus charge higher premiums to minimize risk. This almost makes the plan unviable for the MSME in question.

FAQs: Group Mediclaim for Employees

Is it necessary for having a personal insurance cover despite having a group plan?

That is advisable. One should have an individual plan along with a group plan; this helps you to receive broader coverage against medical costs. As the premiums payable for group plans are low, the coverage receivable is also limited and thus will not be sufficient to cover medical costs. With the rapid development in the medical field, the cost of treatment keeps increasing.
To meet the expenses without going bankrupt, one should have an individual plan too. It helps you to be on the safe side. The coverage of a group plan is normally inadequate for hospitalization and there are no opportunities for customizing the group plan, thus making it generalized for all the employees. Individual plans provide the opportunities for customizing their plans as per their wish and for the requirements that work in their favour.

How are group Mediclaim policies different from individual plans?

A group Mediclaim policy provides coverage at a lower premium to a greater number of people, whereas, on the other hand, an individual plan focuses on covering a single individual thus receiving wider coverage. Individual plans provide the option of a no-claim bonus, group plans do not. A group Mediclaim policy provides the benefit of getting the individual an opportunity of getting coverage from day one despite having a pre-existing disease. No medical screening is required under a group plan.
An individual has to undergo a medical check-up if he/she has crossed the age limit of 40 years. A person below that age has an option for taking up the test or not although, it is preferred to undergo such tests it helps one understand their health condition.

Should I rely on group coverage until retirement?

No, one should not entirely rely on a group plan at any stage in their life for the sole reason that the coverage offered by such a policy is minimal and will not help one get quality treatment. Group plans are beneficial for people in the shorter run as once the person leaves the job or retires the person is not under the coverage of such a policy anymore.
If your retirement age is 60, it is most likely that you might be suffering from some chronic form of health concern. At such an age buying medical insurance becomes very difficult and expensive, and so, making it unaffordable considering you have already retired, thus it is always preferable to have an individual plan as a back-up. It helps in the long run.

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