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Group Health Insurance

Why Should You Not Include Employees’ Parents Group Health Insurance Policy?

Why Should You Not Include Employees Parents Group Health Insurance Policy

A group health insurance plan offers medical expense coverage to the employees working in an organization. An employer offers the insurance benefits to the employees by paying the premium. A group health policy can also be comprehensive where the plan coverage includes the dependent family members of the employee(spouse, children, and dependent parents). 

The decision to put the names of the parents depends on the employer. If they want, they may offer a comprehensive package to the employee. On the other hand, an employee may also request their employer to exclude the plan coverage for their parents for certain policy limitations. 

From the employer’s perspective

As the employer pays the premium and buys the insurance plan for the employers, they need to decide first. Is putting the names of the parents of the employee a good decision on the employer’s part? Well, there are different aspects that may influence the decision. There is a financial liability and other factors for which many employers do not offer extended benefits to the employees’ parents. 

  1. It cuts the overall cost

The insurance amount for healthcare plans depends on the age of the policyholder. If the age is on the upper side, the premium amount automatically increases. Also, with more beneficiaries, the cumulative amount increases for each employee. Thus, it is better to exclude the names of the employees’ parents in the healthcare policy

  1. It is not beneficial 

The parents of most employees already have a running Mediclaim policy under their name. In such a situation, the employer group health policy becomes unnecessary. You pay for the premiums yearly but, the policy remains inactive as they do not use the plan coverage. Thus, it is better to ask the employee if their parents require a policy benefit. 

  1. Frequent claim chances

With age, the body gets weaker and becomes prone to different diseases. Thus, they may need to get hospitalized for different reasons. In such cases, the number of claims in a year increase. As a result, you may not get a cut in the premium during the renewal period, usually termed as the “no-claim bonus”. 

  1. Employees may already have one.

Health insurance policies offer tax relief in income tax filings. As a result, most employees start a family policy at the beginning of their career to avail themselves of the tax cuts. If the employee already bears the cost of a comprehensive healthcare pack, they may refuse the benefits of the group health policies. Even if they do not refuse it, it stays as a meaningless benefit as they would not need to use it. 

  1. A loss to the company

Suppose you have bought policies for the employee and their family by paying more premium. After working for a year or so, the employee leaves the job. Then who has to bear the loss? Yes, it is the employer who faces the loss. The money you paid for the employee and their family did not fetch you a long-term gain even after offering such lucrative benefits. The loss gets lower when you only offer group policy to the employee. Even if they leave the company after some time, it is not a big deal. For startups and small businesses, it is wiser to include only the name of the employee under the group health policy

From the employee’s perspective

The decision can be confusing for the employee as well. Why? The group health policy is an employee benefits scheme that the organization offers for which the plan coverage may not be too wise or useful. Especially for aging parents, the sum insured may be less or, the offerings may be limited. So, if your employer asks your preference about including the name of your parents in the list, think carefully before saying yes. However, if you are not in a financially stable position to buy a family healthcare policy for your aging parents, then saying no to the offer will be a bad decision. But if you can afford their policy premiums, it is better to separately buy a senior citizen or family healthcare policy for them. 

  1. The insured sum may be too less.

Employer health insurance policies usually range between yearly insurance coverage of Rs.1 lakh to Rs.5lakhs. The current inflation and rising medical charges have affected the overall expense. Thus, having an insured sum of Rs.1 lakh or Rs.3 lakhs may not be useful during emergencies. For aging parents who are 65+, the insured amount needs to be more as their treatments are costly. Therefore, it is better to go for separate healthcare insurance for them where you can extend the sum limit to Rs.10 lakhs or more, depending on your affordability. 

  1. Coverage for critical ailments and pre-existing diseases

If the group health policy does not offer medical expense coverage for pre-existing diseases, is there a point in keeping it? Your parents can have pre-existing ailments like diabetes and cardiac diseases. If the insurance plan denies coverage for their treatment expenses, then there is no point in having the benefit. Thus, if your employer asks you for your preference, check the policy norms and features before saying a yes or no. 

  1. Chances of scheme discontinuation

The power of discontinuing the policy stays with the employer in case of group health policies. If the organization wants to cut off the company expenses by discontinuing the healthcare policy for the employees, you can be in trouble! In such cases, it becomes tough for you to buy a new policy and again wait to cover the waiting period. Especially for aging parents, the waiting period factor becomes a critical issue. So, it is always to have a plan B to support the needs of your parents. 

  1. Interruption for a job change

When you leave the job for a better opportunity, the policy benefits get canceled. A group policy coverage is valid till the service period of an employee unless the employer decides to continue it. Thus, it becomes a worrying concern during a job switch. The pre-earned credits for the waiting period and critical illness coverage become null and void when the insurance gets canceled. Even if you buy a new one or your new company offers you a comprehensive plan, you will not gain the credits. Thus, it is better to keep the insurance of your parents separate as they need a stable plan that ensures maximum medical coverage. 

Features of a good healthcare policy for aging parents

Not every health insurance plan is perfect for your aging parents as the plan coverage may not be useful. You have to find the right insurance company to buy the policy at the best price. Ensure that the premium cost rightly matches with the offerings of the policy for your 60+ aged parents. Here are some of the policy features that may help in your selection.

  • Higher entry age
  • Huge network of hospitals
  • Day-care expenses and cashless benefits
  • Free health checkups 
  • Medical checkup before the policy
  • Senior citizen benefits
  • Less waiting period for diseases
  • Critical ailments and injuries
  • Easy claiming process and cashless processing
  • Faster settlement procedure

Make a wise call

If you are still in doubt about which policy to pick or want to know more about the features of the employer health policy, connect to an expert. You can pick the policy that suits the needs of medical treatment expenses of your aging parents.

PlanCover – Assisting you with the decision-making.

PlanCover is a one-stop solution for employers looking for a health plan to offer the employees. They offer group health insurance plans to small and mid-sized organizations and businesses having employee strength of 7 to 450. You can connect to them to know about the different policies present with the IRDA-approved insurance companies in India. Connect to them now. 

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