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Why is Health Insurance Offered by Employers not Enough?

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A good job with a reputed firm that gives you access to many perks including health insurance coverage by employers is a great boost for employees. However, do you think the coverage received as part of an organization is enough for you and your entire family to sustain health emergencies?

There are many companies who offer health coverage to employees as part of their employment incentive. Some firms even extend the insurance benefits to the families of the employees. Now, the question is if you are getting health coverage from your employer for you and your family, why would you require additional coverage?

Despite the fact that the coverage offered by employers is good for catering to your health emergencies. However, in many cases they do not offer exclusive protection. Hence, these policies are not broad enough to fulfil your complete Mediclaim needs. Let's analyse why medical insurance offered by employers may not be enough.

Why is corporate/employer health insurance not enough?

To understand why corporate insurance may not be enough, you should know why we need insurance in the first place. The sole purpose of procuring a health insurance policy is to save expenses during health emergencies by raising claims for hospitalization and making sure that they are settled by your insurer well.

However, it is often seen that getting insurance claims settled from an employer group policy becomes hard as most of the things may not be covered under the plan. There are many illnesses that might be excluded as well as many clauses that need to be fulfilled before your claims are settled through an employer insurance policy. Moreover, sometimes the employer and the insurer might together play a role to minimize coverage and limit their expenses.

Also, many companies just allow the bare minimum insurance benefit to attract and retain employees. These policies are attached with the clauses of co-pay and room-rent limits. Hence, loopholes in employer paid health insurance make it difficult to avail exclusive benefits from the policies.

Below are some such loopholes that you may have overlooked in your employer's insurance policy, which proves why you need additional cover.

Clauses of room rent

The room rent clause implies that your per day room rent during your hospital stay will only be covered up to a particular amount. It could be as low as half the total rent that is charged per day. Also, the hospital room rent clause implies that the cover extends only to the room rent and does not include things like doctor visits and nurse expenses, which are actually huge expenses.

Clauses of co-pay

Co-pay means that the total bill of the treatment will be shared by the insurer and the insured. Here, the insurance company pays a part of the total expenses, while the remaining is paid by the policyholder. This lowers the benefit received by the policyholder and the policy couldn’t eliminate the financial burden of the person. On the other hand, regular health plans that you buy may not have the co-pay clause and they also offer greater financial coverage.

Policy document clauses

The policy document clauses are the ones which are present in the policy papers but may not be obvious to you. In many cases, under corporate health plans both insurer and the employers use ways to limit the total liability by means of this document. Check them below:

Family members covered under the plan

It is not necessary that the corporate health plan offered by your employer would cover all your dependants. Generally, in India when people buy a health insurance policy, they include their dependent parents as well as children under the plan. In fact, the aim of owning an insurance plan is to eliminate or reduce the hospitalization expenses of your own or your dependants. But most employer insurance plans only cover the employee and not the dependents of the employee.

Coverage till you have employment

If you are dependent on your employer's insurance coverage, you must remember that you get protection till the time you are an employee of the company. The moment you leave the job or you get retired/terminated etc., your insurance cover ceases to exist. So, in that case you will be without coverage until you get employed with another company or you buy a new plan. In such a situation, your individual health cover helps you despite your job status.

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Corporate insurance is a perk to attract employees

As already stated, companies use insurance cover as a perk to lure employees and to retain them. So, even if the employer pulls back the cover any time during your tenure there is no legal ramifications on them of any kind. Thus, there is always a possibility of getting stuck in case your employer decides to pull the policy back when you actually require it.

Post-retirement coverage

As stated earlier, the corporate insurance plan would cover you only till the time you are an employee of the company. Hence, after you are retired at the age of 60 or so, you will be without a cover. Moreover, this is the time when you need health insurance the most.

You may also note that getting health policies after 50 years of age is extremely difficult as you are likely to be surrounded by diseases and you are more prone to being sick and hospitalized. Even if you get a medical policy at that age, it will be too pricey in terms of premium and you will have to go through the pre-existing disease waiting period.

Terms and conditions of corporate policies

In many cases, under the corporate policies the employer and the insurer join hands to save money by limiting liabilities of the policy. Hence, they keep changing the terms and conditions of the plan as per their need and benefit rather than the benefit of the employee. They might remove certain coverage while adding certain clauses and conditions as per their will. They can even remove the dependents from your policy any time they want.

Total effective cover

Generally, group policies offered by employers to their employees don't allow a huge sum as coverage to financially cover you and your family. So, you may raise a total coverage of INR 1.5 to INR 2 lakh if all the terms and conditions are met. This amount is not enough to suffice your need if it is a serious illness or for a long duration of hospitalization.

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To Sum Up

Overall, it can be said that having an insurance cover from your employer is definitely a huge benefit and depending on the insurer and the company you work for, the policies and their coverage would differ. If lucky, you may have an excellent policy or may have a really pathetic one. So, all you can do is to analyse your policy document to understand the amount of coverage you have and if it is good enough to manage all your needs. You are not required to cancel employer health insurance, rather you must seek for an additional cover to enhance your health plan.

It is good to consider your corporate plan of health insurance as an alternative cover and seek coverage in the form of an individual/family floater plan to cover your primary family healthcare needs.

* Rs. 245/month is the starting price for a 5 lac health insurance for an 25-year-old male, with no pre-existing diseases.
*! Rs. 334/month is the starting price for a 10 lac health insurance for an 25-year-old male, with no pre-existing diseases.
*@ Rs. 12/day is the starting price for a 5 lac family health insurance for an 25-year-old male and 22-year-old female, with no pre-existing diseases.
*# Rs. 12/day is the starting price for a 5 lac health insurance for an 25-year-old male, with no pre-existing diseases.
*$ Rs. 600/month is the starting price for a 20 lac health insurance for an 25-year-old male, with no pre-existing diseases.
*^ Rs. 12/day is the starting price for a health insurance that covers coronavirus for an 25-year-old male, with no pre-existing diseases.