When is the right time to buy health insurance for your employees?

And the next best time is today.

After the recent MHA notification, it has now become a mandate for all employers to provide some sort of health cover/insurance to their employees. And employers since then have been looking for affordable and well-rounded group health insurance plans. While choosing a policy, most of us look at only the overall cost incurred and do not dive deep into nuances of how group health insurance works, how premiums are calculated and so on.

To aid you with this – there are brokers and other third-party health insurance advisors who can best navigate and help you choose the right plan for your team.

Pointers to keep in mind while choosing health insurance for your team

-Choose the right sum insured – It is the total amount that your insurer will provide in case you (or your family) are hospitalized. If you are in a Tier – 1 city, make sure you go for a 3L to 6L coverage (3L without family/6L with family). Talk to your insurer in-prior to understand how the costing in general works. A 6L coverage won’t cost you 2x of a 3L package.

-Room rent limit and allowances – Typically, room rent allowances come to 1% of the sum insured. That is – if your room costs 12,000 per day and 6L is your sum insured then only 6000 will be reimbursed, and you will have to bear the rest of the room cost. Or what you could instead do to avoid confusion is to opt for a single room irrespective of the costs – you will slightly be paying extra on top of your existing premium.

-Check the network hospital list – Ensure that your policy has all the big hospitals in your city covered. Though more hospitals keep getting added to the list – keeping a check might help you in times of need.

-Wave of waiting periods – Waiting period is the time that your employees need to wait to be able to take certain kinds of treatments. There is basically 3 types
– Initial Waiting Period – Except for accident related hospitalizations, no other pre-existing diseases will be covered in the first 30 days.
– Specific Disease Waiting Period – If you have a specific disease
– Pre-Existing Disease (PED) Waiting Period –

Double-check your employees’ family coverage – You don’t keep employees for a long time, without treating them like a family. So, double-check whether their immediate family members are covered under the insurance plan you choose. Though, it might cost you twice the premium, it is something you should put your thoughts into and well, worth it. (Your employees will love it for sure)

Benefits of buying an insurance policy at a young age

If you are someone who is assuming 40s and 50s are the right age to buy an insurance, you are making a big mistake. Mid-twenties is the best age where you avail health insurance for your employees and here’s why.

– Your employees might have just started out your career and in most cases you are exempt from extreme financial pressure. Setting up an insurance at this phase of life is not going to shake up any of your financial plans and goals.

– One might think, your employees might not need any insurance plans now as diseases are for older people. Touch wood, but accident risks and emergency needs are to be considered and taken care of at any point in time.

– Interestingly, several factors are taken into consideration by the insurance providers before determining policy premiums. Saying that, policy premiums are comparatively cheaper for younger people than older people.

– For every claim-free year, the insurance providers offer a cumulative bonus. While younger people don’t fall ill, you get to accumulate a high cumulative bonus every year.

– According to section 80D of the Income Tax Act, 1961, you get to enjoy a tax deduction of 25,000 every year you pay for your insurance premium

– When you go for insurance plans in your old age, you have to go through a series of medical tests to even determine your eligibility for availing certain benefits. With increased chances of falling ill during 40s and 50s, what is the point of availing insurance when you are not able to get the most benefits out of it in the first place.

For anyone starting out, it could be a lot to process and get a hang of what needs to be done and when it needs to be done. It is not that hard anymore. There are some of the best third-party insuretech players who are here to lift off the weight from your shoulders and help you find the best fit to your team whether you are a startup or a well established organization.

To conclude, here are the two things an employer needs to keep in mind. It’s high time you need to provide your team with a full-fledged health insurance plans, irrespective of your employee age groups. If you already have one in place, make sure it is ultra-beneficial for them, covering everything from health insurance to physical fitness to mental wellness. (And yes there are such plans available).




Views expressed above are the author’s own.



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