Group health insurance, also known as employer health insurance, is a Mediclaim plan for the employee. The employer of an organization pays a premium for continuing the insurance. Small to large-capacity organizations and businesses are bound to offer such service benefits to their employees. Any company having more than seven full-time employees needs to provide a group healthcare plan to the employees and sponsor the premium. After the pandemic, it has become mandatory in India to provide such service benefits to the employees.
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Understanding the role of an employer
A group healthcare policyThe legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy covers the medical treatment expenses of the employees and their dependent family members. What role does an employer play? An employer is the purchaser of group health insurance. As the healthcare plan is a corporate one, the employer is the purchaser of the insurance. The organization’s employer or the startup founder picks the policyThe legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy and pays for it. For continuing the policyThe legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy benefits, the employer needs to renew the insurance annually by clearing the premium charges.
The employee does not pay the premiums. (in most cases) The employer presents the insurance as an employee-welfare plan and pays the premium without deducting any amount from the employee’s salary. However, if an employer offers a tailor-made group health insurance plan to the employees, the expense gets divided. The add-on plans are those in which the policyholderA person who pays a premium to an insurance company in exchange for the insurance protection provided by a policy can add plan benefits by paying extra charges. In such cases, the employer pays for the basic plan premiums and, the employees bear the cost of the add-onsPurchase of additional benefits or cover on the existing policy.. The decision of providing the insurance policyThe legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy and its features is entirely on the employer and, they can pick the plan based on affordability.
Premium calculation for employers
It is not possible to quote an amount while discussing the premiums for group health insurance. Several insurance companies in India offer non-life insurances like group health policies. Each company has a different base plan and customized terms. You cannot calculate the premium generically. The annual charges vary based on the required plan coverage attributes and facilities.
Most employers running a medium to small-scale enterprise offers Rs.1lac to Rs.5lacs insurance for the employees. If you consider the insurance amount as Rs.1lac, the premium would range between Rs.1,400 to Rs.1,900 for a person in the age band of < 35 yrs. However, this amount can also change if the policyholderA person who pays a premium to an insurance company in exchange for the insurance protection provided by a policy is aged over thirty-five. On average, the yearly premium for continuing the plan benefits is affordable for most employers running an organization. The premium charges are more affordable than personal plans or tailor-made group healthcare insurances.
Factors determining premium rates
Why does the employer pay the premium? The premium is the annual charge for continuing the policyThe legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy benefits. The insurance premium gets decided by several factors, like –
- Age of employee group: If the majority of the employees are aged below 35, then the premium is low. If the number of employees is less then the cumulative amount is low. The specific group dynamics of a company determine the ultimate premium amount.
- Inclusion of policyThe legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy features: If an employer includes premium insurance features like corona coverage, room rent waiver, etc., with the base plan, then the premium automatically increases. Also, including family members of the employees, especially their parents (aged above sixty with pre-existing diseases), increases the overall premium amount for a single employee.
- Insurance company premium structure: The basic premium amount is not the same for all the corporate healthcare policies. As there are several insurance companies in India, approved by the IRDAI, there is a diverse range of premium rates.
Why should the employer pay?
An employer should offer the group healthcare plan to the employees not only because it is currently mandatory in India after the pandemic outbreak. A responsible employer who looks after the needs of the employees serving in the company should provide such useful healthcare plans. The employer must buy the policies and meet the premium charges as a token of appreciation towards the workforce.
- Build a better workforce: Offering such healthcare policies helps in bringing recruits into the team and motivates them to work better. Pay the premium on time and ensure optimal organizational performance by shedding the financial load from employees.
- Gain tax exemptions with premium: Pay the premiums on behalf of your workforce to gain tax reliefs. In India, you can earn legally accepted tax exemptions through premium payment.
Mode of payment for employers
The employer of an organization can pay the insurance premium online or via cheque clearance. For online payment, the employer has to pay it from the registered bank account under the name of the company. For offline payment, the employer has to pay the premium through the bank account registered under the organization.
How to make it lighter on the budget?
As an employer, you should always go for a reasonable plan. It is better to sort a budget first so you can get an idea about your estimate and premium cost per employee. Specify the budget details to an insurance broker or the sale representative of the insurance company. They will present the best insurance policies based on your needs by matching the premium to your budget. You have to look for an experienced and expert insurance broker who sells group health plans.
PlanCover – Assisting you in every step.
PlanCover, the high-rated insurance broker, acts as a one-stop assistor to employers. Whether you require assistance in buying the right group healthcare policyThe legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy or pay the premium, they are the ones to rely on. PlanCover sells group healthcare insurances to employers running organizations with employee strength 7 to 450. You can connect to their team to find a reasonable group insuranceGroup Insurance refers to any insurance plan under which a group of employees (and their dependents), or members of a plan that meets all your needs.
