Group Insurance

Top 7 Pros and Cons of a Group Health Insurance Policy

As the pandemic made many realize the worth of their health, people have now shifted their focus to searching for better employment opportunities that also offer some additional benefits, especially related to healthcare. This growing demand has made many employers consider securing their employees under a group health insurance policy that offers basic coverage to their employees and their families (in some cases).

For those who don’t know, a group health insurance policy is a policy created for groups comprising people who engage in a common economic activity or assemble with a commonality of purpose. Though cultural or social associations, housing societies, members of a professional body, alumni, etc., can also buy a group health insurance policy, this policy type is prevalent in the corporate sector. If you’ve ever been part of an MNC as a full-time employee, you must have received insurance cover as part of your CTC.

While being a part of such companies that offer insurance as part of their salary package comes with its own perks, it has certain downsides too. If you were recently offered group insurance, you should be aware of the following pros and cons for better clarity and understanding of the policy.  

Pros of Group Health Insurance Policy

It is always good to know that your employer cares for your health and provides decent health insurance coverage at no extra cost to you. But getting covered under group health insurance has more benefits too. Some of the most common pros or advantages of group health insurance are as follows:

Advantages of Group Health Insurance Policy

  1. Free Coverage for Self

As an employee, you don’t have to pay anything extra to your employer for the group health insurance policy. It means getting to benefit from health insurance for which you didn’t pay any premium. It can be the best thing for many because they can utilize the saved amount that they would have spent on premiums elsewhere.

Added Cover for Family Members (In Some Cases)

Though group health insurance generally covers the employees for health emergencies or treatment costs, the employer can also allow some employees to cover their family members. This benefit may not be available to all; hence, it is best to get it clarified from HR or the employer at the earliest. It will ensure you have clear and right expectations from the policy from day one, and you plan your future course of action accordingly.  

  • Cashless Hospital Treatment Benefit

One of the prime benefits of group health insurance is getting to avail of the cashless hospital treatment facility. If you’re enrolled under your company’s group health insurance, you can ask about the list of eligible hospitals wherein you can visit for cashless treatment. Alternatively, you can visit the insurer’s website directly to learn more about the network hospitals list. This feature alone will help you a lot during times of emergency.  

Also read: Guidelines For Buying Child Insurance

Availability of Maternity Coverage for Female Employees

Female employees get the benefit of maternity coverage with group health insurance. It comes as a major relief to most as the maternity-related treatment expenses are increasing rapidly, and not many people would be able to afford it comfortably. So if your insurance has maternity coverage, much of the financial strain will be off your shoulders once you conceive and it’s time for delivery.   

  • The Benefit of Preventive Healthcare & More

To promote their employees to lead a healthy lifestyle, employers incentivize their preventive healthcare check-ups via the issued group health insurance. A preventive healthcare treatment or test aims at early detection and prevention of illnesses or reducing their intensity. Some employers may offer free teleconsultations with specialists, while some may offer free or incentivized medicines or lab tests. The benefits vary from employer to employer, so it is best to get it cleared from HR for better clarity.   

  • HR Handles Most Conversations with the Insurer

Are you bad with remembering premium paying dates? If yes, you’ll love group health insurance. If your employer has secured your health under group insurance, the HR or employer will be responsible for all the communication between the insurer and you. The employer will also be responsible for paying timely premiums and maintaining the documents. As most of the things are handled by HR, you can sit back, relax, and focus on your core job.  

Cons of Group Health Insurance Policy

The pros mentioned above may have given you a very bright picture of group insurance. But as mentioned at the beginning, everything has its downside too, and group insurance is no exception to it. We have listed its cons below to ensure you get a full, clear picture of group insurance.

Disadvantages of Group Health Insurance 

  1. Policy Ends with Job

Since your employer is paying for the group health insurance policy, it will cease to cover you the moment you decide to leave your current organisation. So take group health insurance as a temporary cover, and get separate health insurance that will stay with you as a secure policy for as long as you want. You should never depend solely on an insurance plan whose validity is linked to your current employer.  

  • Full Control Lies with the Company

One of the biggest downsides of group health insurance is its complete control lies with your employer. So what should be covered is decided by your employer and not you. It can put you at the back foot when the provided coverage is not enough considering your healthcare needs.

  • Policy Terms are Not Flexible

Sometimes the policy terms and conditions can be changed at the discretion of the employer and the insurer. It means you or others covered are not consulted for the same and are informed of the changed terms once the changes have been finalized and applied. It can be particularly bad if certain essential coverage terms are altered or entirely removed.

  • Inadequate Coverage is a Matter of Concern

As group insurance secures many people under the same policy, you cannot expect to get the benefits or coverage compared to that of the comprehensive insurance plan. Your personal health insurance along with group health insurance provided by your employer is the ideal combination that can offer enough coverage. And as mentioned earlier, group health insurance offers very basic and limited coverage, which may not be enough for most. To cover up for the remaining, you will have to buy separate health insurance on your own terms.  

  • Claim Process can be Daunting

Since the employer is maintaining all the communication and documentation work necessary with the insurer, you will have to route all your communications via HR or employer. So if you want to file an insurance claim, you may have to follow up multiple times with your HR to get work done. The hassle is negligible when you file for a claim for personal health insurance.  

  • Not Dependable for Personal Financial Planning

Due to all the uncertainty, lack of coverage, and no tax benefit associated with group health insurance, it cannot be touted as a reliable personal financial planning tool. If you’re someone who likes to calculate the full year’s financials, in the beginning, to plan accordingly, group health insurance can certainly shake things up.  

  • No Tax Benefit

Many people invest in insurance, considering it a tax-saving tool because of its eligibility to claim certain deductions in Income Tax. But since the employer pays for the insurance, you cannot claim the premium being paid as a deduction under Section D of the Income Tax Act. It can bring a jolt to your tax planning. But if you have asked the employer to enhance the coverage by paying extra for the premium from your own pocket, that amount can be claimed as a deduction in your Income Tax return.  

You can only make the right and best decision when you’re aware of the positives and negatives of a product or service or something else. Now that we have presented both the pros and cons of group health insurance, you should be able to decide if group insurance is enough or you need a separate insurance plan too that offers optimum coverage.

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