It is not mandatory for companies to provide medical insurance for their employees. Yet, many companies do offer a group or corporate health insurance scheme that covers not just employees but also their immediate family members, mainly spouses and children.
Such health policies, often given for free as perks, may not extend to other relatives of the employees such as their parents and in-laws. But, some companies allow the employee to pay an extra premium and extend the policy coverage to these relatives as well.
The moot question, though, is whether it is beneficial to include your parents under the employer’s group health insurance scheme? The answer to this lies in understanding the implications of such a policy. Also, note that such policies are tailor-made and not standardized.
Here are some advantages of the corporate health insurance plan:
No pre-medical check-ups: An individual or family health policy entails a pre-medical check-up, among other formalities. However, there is no requirement for such check-ups—either for the employee or his family members, including his parents—under the group medical policy offered by the employer.
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No paperwork: For a retail health policy—be it for an individual or family—an insurer usually prepares a proposal form that will have details of an individual’s and family’s health history, any pre-existing diseases (PEDs), smoking or drinking habits, etc., before underwriting a policy. In the case of a group medical policy, employees don’t need to do any paperwork. Moreover, they are not required to share medical history details to get coverage under a group policy.
Zero waiting period: Generally, retail health policies come with a waiting period—the period of time before you can get cashless hospitalization facility or even claim any hospitalization expenses for any PEDs or specific illnesses. Many insurers even impose a waiting period of two to four years in case of PEDs or specific illnesses. But, there is no such waiting period where it concerns a corporate health policy.
Rakesh Goyal, director of Probus Insurance Broker, said, “Typically, if any senior citizen wants to buy a retail health policy, they need to undergo a medical test. Moreover, there will be a waiting period too, but in a group insurance policy, parents get coverage from day one. Besides, the premiums are lower, and there is coverage against PEDs.”
Do note that the group policies have their own limitations.
Limited coverage: Employees usually do not get to choose the sum insured in a group medical policy. Many companies only offer a cover of ₹3-5 lakh, which might not be sufficient for the extended family, including your parents. There are chances that elderly parents are responsible for higher claims made under the group medical policy in a single year. In such a case, it can leave other family members with insufficient or no coverage if they get hospitalized in the same year. Hence, it is always better to have an additional retail health policy, without which an employee will have to bear the entire expenses when the group health coverage limit is exhausted.
Employer’s discretion: “Although the process of you and your family getting covered under the group policy is seamless, there is no guarantee that the benefits offered by your employer will always be the same,” said Vivek Chaturvedi, chief marketing officer at Digit Insurance. “The coverage opted for is at the employer’s sole discretion, and the company may choose to exclude your parents from the policy in future. They may also amend the medical benefits offered by decreasing the coverage or discontinuing the health insurance altogether. This could leave your parents without any health coverage. Hence, it is prudent not to completely depend on a group policy for your parent’s medical needs.”
Change of job: Companies offer the group health scheme to their current employees alone. The policy lapses if you shift jobs or are laid off.
Tax benefit: Employees who pay additional premium to get enhanced medical coverage for self or the immediate family or even extend the policy coverage to their parents can claim tax deduction of up to ₹1 lakh (under Section 80D of the Income Tax Act). “If an employee has enhanced medical coverage using a top-up policy or taken an additional cover for parents and is bearing the premium, one can avail tax benefits for the same,” said Chaturvedi.
Should you opt for the group health policy?
You must weigh the pros and the cons, and determine your answer to this question. Chaturvedi said, “If you do not have an individual retail health policy for your elderly parents or are struggling to find an adequate retail policy, then covering them under group policy would make sense.”