A Group Mediclaim policy issued to an organization will have the name of the organization as the policyholder. The coverage will be for its members. This is the common construct for employer=-employee groups but is also true for other groups which offer health insurance benefits. Examples of this will include group insurance benefits offered to Affinity groups ( like dealers of an organization), spiritual groups, associations, etc.
Group Health Insurance policies can get structured under the following models –
- Complete premium is paid by the company and nothing recovered from employees’ salary
- Complete payment is made by the company but a part of it is recovered from the employees through their salary payable
- In cases where coverage is given to parents/parents in law, that segment of premium is recoverable from the employees as a payment for a voluntary benefit
- Full premium is recovered from the employee’s salary
In instances where partly or wholly the premium is recovered from employees through their salary, the amount of premium thus recovered is mentioned in Form 16. This will be the basis for claiming a rebate under Section 80 D
The current regulations allow for up to Rs 25,000 rebate for premiums paid for immediate family and additionally, the laws allow for a Rs 30,000 rebate for premiums paid in the case of parents.
What happens if you have paid the premiums under a group insurance contributory plan and you leave the organization before the expiry of the policy?
In almost all policies the insurer allows for pro-rata refund of premiums for members leaving the group before the expiry date of the policy. If you are leaving the organization, do request for the refund to be credited to you in your full and final settlement with the company. For any credit taken under section 80D for all such premiums, your Chartered Accountant will advise you on how to handle that.
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