Group Health Insurance

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A group health insurance plan may be defined as a healthcare coverage plan for a certain number of people. In many well known organizations this is one of the several benefits offered by the employers. These plans have a lot of uniformity and provide similar benefits to all the employees who have availed the plan.

Under normal circumstances the group health plans are more economical than the individual health plans that offer similar benefits. This happens as the risk is distributed among the different people who make up the group.

In case the insurer bears the premium expenses then that may be regarded as totally deductible. The benefits received by members of the group are normally exempted from taxes.

Group health insurance in India
In India, group health insurance is normally restricted to company employees or people who are part of various communities. The companies normally provide these plans in accordance to their employee welfare plans. However, these plans are also customized on the basis of the demographic details of the employees.

Why take group health insurance?
The major advantage of taking a group health plan is that it lessens adverse selection, a major problem in insurance plans, by forming a group of people, who are regarded as capable of buying insurance, whose only reason for being in the group is not taking the plan.

In layman's terms, people have not taken the plan because they have high levels of risk which makes it necessary for them to get insurance. They are availing the insurance because they work at the same place.

Group policies are regarded as attractive propositions because the average price of every policy is, more often than not, lesser than the individual insurance policies.

The insurance providers are keen on getting customers and so they can also deduct their prices to draw more people to the group. Statistics show that drivers are the biggest beneficiaries of these policies.

Yet another distinguishing aspect of these plans is that a member of this group can buy or renew his or her coverage while still being part of the group health plan. However, this permission is provided under certain conditions.

For the employers the major benefit of the group health insurance plans is that these help to draw and also retain the employees. This factor becomes extremely important especially in case the competitors offer good benefits as well and the organization wants to retain the best employees.

How to buy group health insurance?
The first step in buying a group health insurance policy is to go online for quotes - there are a lot of companies and therefore a lot of research needs to be done to find out the viability and suitability of the plans on offer. It is advisable to work closely with licensed agents, especially ones with good reputation.

Types of group health insurance
There are four major types of group health insurance plans - HMOs, POSs, PPOs, and HDHPs. The policies by the HMOs or health maintenance organizations let the members choose from a selected group of doctors who are included in the service provider's network.

With the HMO plans there are no deductibles or minimum amounts that have to be paid before the insurance policy kicks in. The policyholders just need to pay a previously specified amount called co-pay when they visit a specialist or a doctor.

The HMO plans normally do not cover costs that result due to availing treatment from a doctor who is not in the network. So it is extremely important to confirm that a doctor or hospital is part of the network before making the appointment.

The HMO policies always ask the insured to opt for a doctor who will serve the function of the primary care physician. The primary care physicians normally treat the insured in cases of emergency or otherwise, and refer the specialist whose services have to be availed.

The insured needs to remember that without the referral they may not be provided the payment. The PPOs or preferred providers are just like the HMOs by virtue of working with a chosen group of healthcare providers.

But the PPOs also provide greater choice of freedom to the insured by letting them venture outside the network and opt for an unaffiliated doctor. In these plans referrals are not required for seeing a specialist.

The co-pays in these plans depend on whether the doctor is in the network or not. It is higher if the doctor is not in the network. In such cases the deductibles go up as well. The monthly premiums for PPOs are greater than the HMOs.

The point of service plans or POSs can be regarded as a mix of the HMOs and the PPOs. Like the HMOs the POS members can opt for a primary care doctor who can refer to specialist doctors who may or may not be part of the network.

Like the PPOs the deductibles and co-pay can go up if a doctor outside the network is seen. The high deductible health plans (HDHPs) are also referred to as calamitous health plans as they require a substantial amount as deductible.

How is group health insurance premium calculated?
The following factors are taken into account while calculating the health insurance premium:
  • Personal history of proposer
  • Medical underwriting
  • Mortality rate
  • Modified or adjusted community rating
  • Marketing and administrative costs
  • Rating bands
  • Savings

Top group health insurance policies
Apollo Munich Health Group Health Insurance Plans: these plans provide substantial cover for so that accidents and illnesses, which require the insured to be hospitalized, can be treated properly

The policyholders can also choose critical illness cover as part of their plan, which also covers the following:
  • Diagnostic procedures
  • Surgery expenses
  • Lodging and boarding expenses
  • Prosthetic expenses
  • ICU costs

ICICI Lombard Group Health Insurance: the plan provides the following coverage:

  • Medical expenses at the time of hospitalization that lasts in excess of 24 hours
  • Pre hospitalization costs for 30 days
  • High tech technological processes and surgeries where less than 24 hours' hospitalization is necessary
  • Post hospitalization costs for 60 days

Following are the major benefits of this plan:
  • Customizable plan
  • Cashless service
  • Family floater options
  • Extended coverage for 9 important critical illnesses - this is provided in addition to hospitalization benefits

HDFC Ergo Group Medical Insurance: the plan covers the following:

  • Room and boarding costs
  • Pre hospitalization costs
  • Nursing costs
  • Post hospitalization costs
  • Fees of surgeons, consultants, anesthetists, specialists, and medical practitioners
  • Domiciliary hospitalization costs
  • Costs of anesthesia, blood, medicines and drugs, oxygen, diagnostic materials and x-ray, operation theatre, dialysis, surgical appliances, and chemotherapy
  • Day care treatments
Max Bupa Employee First Health Insurance: following are the major advantages of these plans:

  • Direct communication with company - no need for third parties
  • Medical costs for day care treatment
  • Choice to change group policy to individual plan upon retirement or change of company
  • Single room accommodation without restriction on number of days and rents
  • Cashless facility at top hospitals
  • Health profile of all the members
  • Tax benefits
  • Top coverage so that the best medical treatment and advice can be provided
  • Diverse coverage in terms of age group of insured

Last Updated on 15/06/2011

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