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Group Health Insurance

How much does health insurance cost for a startup business?

By December 8, 2021December 10th, 2021No Comments
How much does health insurance cost for a startup business 1

As a startup founder, you have too many things to figure out! Among the many essential parts of running a startup, group health insurance is a vital one. But you cannot offer the insurance for free and have to take up the responsibility of paying the premiums. For large-scale businesses, the financial requirements for group health insurance may not be a limitation, but for small businesses and startups, having an idea is a must. Although the overall cost is bearable by most startup businesses, you have to stay prepared with the funds. 

A brief outline of group health insurance

Before getting into the cost-related details, gather an idea about the group health insurance. The employer health insurance plan is a facility that an employer offers to the employees working in the organization. Under this insurance plan, the employee gets medical expense coverage and treatment coverage in a network of hospitals. They can enjoy the benefits of the insured sum amount till their last day of service. The employer pays the premium on their behalf. In some group health policies, the employee family members also get similar benefits. 

Is group health insurance cost-effective for startups?

Why does a startup need to offer the group insurance facility to the employees? Is this cost-effective in any way? Yes, it is cost-beneficial if you consider it from a long-term perspective. Startups setting their grounds in the business may consider the group health policies a financial burden on the company. But in reality, the policy acts as a boon. The premium amount is lesser than any other employee benefit plan. 

With such offerings, you can attract new employees to expand your employee strength. The employees get medical facilities for themselves and their families, thus growing loyal to the company and settling for the offered salary. In the long run, providing group health insurance pays you off more than what you pay for the premiums! 

An idea about the overall cost

In India, several insurance companies offer group health insurance plans for startup businesses. If your organization has more than seven full-time employees, you can get the policy approval. However, the price is variable. Depending on the number of employees, their age, sum insured, and other factors, the premium cost can vary. Moreover, the insurance company you select is the ultimate deciding key for the estimates.

For example, if you offer an insurance sum of Rs.1lakh for an employee aged less than 35, the average premium expense may range between Rs. 1,400/- to Rs.1,900/-. The price increases with the age of the employees and the medical coverage, even if the insured sum is Rs.1lakh. 

On average, a group health insurance plan is still more economical than any other employee benefit plan. The employer gets benefited financially as the group policy makes them eligible for a tax cut. Thus, even if you pay a certain amount for the premium, eventually, you receive compensation in the form of a tax release. 

Know the cost-influencing factors

There is more than one factor that influences the overall cost of the premium for group health insurance. Read along to know more about how you can manage the finances without making it a burden on the company budget. 

  1. Coverage and benefits: There are numerous group health policy plans that different insurance companies offer for employers. Depending on the plan you pick, the policy coverage specifications will vary. The more benefits you pick, the more the price will increase. If you are on a tight budget, going for a basic policy is the best for cost-cutting. Offer the employer health policy to the employee, without including their family members, and find a moderate coverage plan to satisfy the obligations. 
  1. Employee strength and age: Apart from the number of member coverage in the policy plan, the employee strength also influences the total sum. If your startup business has a greater number of employees, who are in the upper age band (more than 35 years) then the premium amount automatically increases. 
  1. Chosen plan and sum: The sum insured creates the most impact in determining the premium. Irrespective of the insurance company you choose, the premium amount will increase if the insured sum is more. For growing businesses, most employers prefer policies with a sum insured of at least INR 200,000/- to manage the overall costing to the organization. Besides the insured amount, the add-on benefits for medical treatment and coverage can cost you more. Check with the insurance plan specifications to get a clear idea of the final premium amount. 
  1. Type of business: Multiple insurance companies determine the premium amount and associated policy features by reviewing the work that the employees do. Businesses having greater chances of service-related risks and injuries (for example – construction, emergency services, etc.) have to pay more premium charges with the insurance plans. Hence, it is better to talk to the insurance company representatives to get the estimate depending on the type of service or business. 

Can you get a clear estimate?

By reading so many influencing factors, it can be confusing for an employer or a startup founder to finalize a budget. Getting a clear estimate is possible only when you specifically jot down the requirements. Discuss the facilities that you want to offer through the health policy and to how many employees. The insurance company representatives or insurance brokers can offer a tailor-made plan for you depending on your specific needs. 

Which insurance plan to pick?

Not every insurance company charges the same. The IRDAI – approved companies have several policies under the group health plans where the features vary at large. As a startup business, if you cannot afford too much, then you have to search for the most economic plan that satisfies the employee requirements and your pockets as well! Compare the policy price quotes for more than one insurance company to get a clear idea of the estimate before finalizing the policy

PlanCover brings you the answers to all the doubts related to group health insurance. They have been helping small to midsize businesses and startups with the best group health insurance plans suited to the requirements of the startups.  You can get the estimates of various policy plans from their offerings and find the best deal that does not become a financial burden to the startup business. Connect to the representatives of PlanCover now to get started with the process. 

Experts at your service

There are two ways to get price quotes from the insurance companies for comparing the rates. One way is to connect to the different insurance companies, one by one, and discuss with their representatives to get a price quote. It is a highly time-consuming process. The other way is to find an insurance broker like PlanCover who can offer you the price estimates of the policies across multiple insurance companies. It is more convenient as it takes less time, and you get a one-stop solution. Find a top-rated insurance broker to ease the needs.

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