A company’s value today is determined by how much it invests in its employees. In addition to salaries, employees also consider benefits when choosing between two jobs. These may include flexible work schedules, mental health programs, voluntary leaves, and health insurance.
Medical costs can put a huge dent in one’s wallet. According to the National Family Health Survey-5 (2019-21), approximately 41% of Indian households have a minimum of one member covered by a health insurance plan. The other members, however, are still at risk. Offering them health insurance for themselves and their dependents can alleviate the stress. As per the Government, post the lockdown, a health insurance policy is mandatory for all companies resuming operations.
Instead of taking individual insurance for each employee, you can cover all your employees in a single policy, a Group Insurance scheme. Employers take out Group Health Insurance schemes as a benefit for their employees. In this article, you will understand it in detail.
Group Insurance Scheme: What Is It?
As the name implies, a Group Insurance policy is an insurance policy taken out for a group of people. These groups can be associations, clubs, or societies, but most often are employee groups. Thus, this policy is also known as Corporate insurance. It covers all employees irrespective of age, job role, caste, economic condition, or health status. However, the employee will only qualify for the benefit if he remains an active employee. As the employee leaves, the benefits end.
This policy offers a voluntary insurance benefit to employees. Hence, the employer pays the premium. However, the insured will be the employee and their dependents, like spouse, children and parents. Thus, we can say that in a Group Insurance plan, the policyholder is the employer, and the beneficiary is the employee and their dependent family members.
Yet, it is beneficial for both employers and employees. Let’s explain that in detail.
Benefits for Employers
Opportunities, communication, and a positive work environment contribute to employee motivation. By offering employee benefits like insurance, you demonstrate your care for the employees. The more employees feel valued, the higher the motivation to work and succeed.
The world is experiencing a period of the Great Recession. Employee attrition can be due to a lack of growth opportunities, unfavourable working conditions, or simply a lack of employee benefits. If you want to increase employee loyalty, you can’t rely solely on salaries – you need to offer them additional perks, like insurance. For example, a Group Term Life Insurance provides a guaranteed sum assured to the nominees if anything unfortunate happens to the employee.
Attracting new Talent
In a survey, 46% of employees said that health insurance was a deciding factor and positive influence in choosing their current jobs. Employees want to feel valued by their organisation. The more employee-centric a company is, the higher the chances of recruiting better talent.
Under the Group Insurance scheme, the employer pays the premium. The premium payment for employee benefits is a business expense or a fringe benefit. You can take a deduction for the same under Section 17 of the Income Tax Act.
Taking individual health insurance for each employee is neither practical nor cheap. When you take insurance for a group, the risk gets divided. Thus, the premiums become economical. Many insurance companies also offer a corporate discount.
An organisation’s value is affected by its goodwill in the market. A happy and satisfied workforce contributes to a company’s image building.
Benefits for Employees
From pre-and post-hospitalisation expenses to room rents, employees get a lot of health benefits in a Group Insurance plan. Under a cashless facility, the employees don’t even have to pay their bills. The hospitals settle it directly with the insurance company.
Peace of Mind
As said before, medical costs can be financially draining, which can increase your employee’s stress. In addition, it will hamper their productivity at the workplace. By taking care of the medical costs through insurance, you relieve them from this financial burden. It prepares them for unforeseen events, and they can concentrate on their work with peace of mind.
Inclusions of Dependents
With the pandemic, we have realised the importance of investing in insurance. Now, employees can take individual insurance. However, for their family, they will need to invest in a family plan. The employee may not have the resources. Group Insurance takes care of all medical expenses, whether it is for the employee or their dependents. Further, the employer pays the premiums.
Easy claim Settlements
Settling claims can be a cumbersome and complicated process. Insurance companies may ask for multiple documentation. However, with Group Insurance, the company takes care of all that. At Plum Insurance, you can even apply for claims through WhatsApp.
No medical check-ups
Every insurance company requires the insured to undergo a medical check-up before approval of the policy. The premiums go higher in cases of high-risk illness. However, in group health plans, there are no pre-medical check-ups of the employees. All employees are eligible, regardless of any medical condition.
Option of add-ons
Different insurance plans cater to specific coverage. Group Personal Accident Insurance covers employees from accidental death and disabilities. Similarly, a group medical plan may include other coverage, excluding accidental ones. Employees who want additional coverage not covered under the basic group medical plan can always purchase add-ons. However, they will have to pay premiums. There is even an option to convert individual plans into group plans and vice versa.
Investing in employee benefits plays a crucial role in an organisation’s success. Thus, companies must invest dedicated resources to design a Group Insurance scheme. You can always take the assistance of experts like Plum Insurance to design a customised, economical plan suited to your employees’ needs.