What to Do When Your Insurer Sets Caps on Group Health Plan

Preeti Kulkarni & Vidyalaxmi offer some solutions to employees when insurers and cos shrink their group cover benefits All good things, it is said, comes to an end. And the rule may hold true for group health policies, too. Soon, employees covered under these schemes could see their benefits shrink when their corporate policy comes up for renewal. For instance, there is talk about public sector insurers hiking premiums or bringing in a co-pay clause, where the policyholder has to share the burden with the company. This is due to the pressure from the finance ministry to stem losses in their group health portfolio. Industry-watchers say that the entire group space — including private sector insurers — is moving in this direction. Irrespective of whether your group cover is subjected to new terms or not, you would do well to treat the development as a wake-up call. "For instance, while deciding the sum insured, corporates normally offer same coverage for a certain scale or grade of employees as they try to limit their premium outgo per employee. As a result, the sum insured could be grossly insufficient," points out Divya Gandhi, head, general insurance and principal officer, Emkay Insurance Brokers. "Or, they could even have ailment-wise sub-limits or capping." Parental coverage is another key benefit that has taken a hit over the last couple of years. Many companies have withdrawn or scaled down the cover offered to employees' parents.  This means you need to proactively work towards ensuring comprehensive protection for yourself and your family.  BUY AN INDEPENDENT HEALTH COVER  The best remedy for lack of group cover or its inadequacy is, undoubtedly, buying a standalone health cover. In addition to acting as a back-up, this arrangement has other benefits too. For instance, most group schemes coverpre-existing diseases (PED) right from inception, whereas independent covers usually prescribe a waiting period of 1-4 years. Therefore, being simultaneously covered under group and standalone policies will ensure continuous coverage for pre-existing illnesses.  For your family's health expenses, family floaters can be considered, as they are cost-effective. However, in case your parents have crossed the age of 65 years and have adverse health history, it would be wise to buy a separate policy for them. You can also look at purchasing a fixed benefit policy – offered by life insurers – to supplement your group cover.  Fixed benefit policies undertake to disburse the pre-defined amount even if you have already made a claim under an indemnity-based policy (like group covers, or individual policies, where expenses actually incurred are reimbursed). "The key advantage of benefit policies is that policyholders do not have to worry about claim settlement as they know beforehand the amount that would be disbursed. Also, the documentation procedure is simpler," says Gaurav Garg, CEO and MD, Tata-AIG General Insurance. You can use the lump sum pay-out under defined benefit policies to take care of your recuperation expenses.  SETTLE FOR A TOP-UP COVER  The second-best option is to go for a top-up cover, as they are cheaper than individual policies. As the name suggests, it gets triggered when your base policy – in this case, your group cover – falls short of your requirement. "Some top-ups restrict their coverage to major ailments listed in the policy. Besides, they could specify that claims would be entertained only if the single claim is larger than your individual or family sum insured offered by the base policy," says Gandhi of Emkay Insurance Brokers. Therefore, read the policy brochure carefully while signing up for a top-up scheme.  SIGN UP FOR TOP-UP OPTIONS  WITHIN GROUP COVER  "Several organisations are teaming up with their group insurance providers to offer their employees the choice to opt for a higher sum insured (top-up) covers which addresses the need for higher medical costs. The arrangement requires the employee to bear the premium for the additional sum insured," informs Sanjay Kedia, CEO, Marsh India, an insurance broking firm. These add-ons score over independent top-ups in terms of the nature of benefits. Since group covers are customised offerings, their utility value tends to be higher. Don't forget to keep an eye on the terms and conditions, though. While some schemes cease to exist once the employee quits the organisation, others continue to be in force, regardless of the employment status.  PAY FOR PARENTS' PREMIUM IN GROUP POLICIES  Increasingly, companies are leaving out employees' parents from the group policy's scope of coverage. However, some employers extend the cover to parents, provided the employee shells out the relevant premium cost. If your employer falls in this category, you should not hesitate to opt for the cover even if it means dipping into your pocket to fund the premium. For, not only do corporate policies cover pre-existing illnesses even in the initial years, but also, usually, offer additional benefits as they are customised for the organisation. Besides, the claim settlement process is also likely to be smoother.  OPT FOR LINKED STANDALONE  COVER AFTER RETIREMENT  Some general insurers are promoting schemes where the insured employee can move to an individual policy upon retirement or job switch. The key benefit is that it eliminates the need to serve the waiting period for PED (pre-existing diseases) cover all over again. Remember, even if the insurer providing your group cover does not market the scheme actively, you can always enquire about the same. As per the portability guidelines released by the Insurance and Regulatory Development Authority (Irda), porting from group to individual policies is permissible. So, you can convert your group cover into an independent policy while retaining all the continuity benefits. However, at the time of making the initial switch, you will have to stick to the existing insurer. Thereafter, you will be at liberty to shift to any other insurer.