A claim buffer provides an additional layer of financial security for your employees during medical emergencies. Organisations offer health insurance under their employee benefit programs to attract and retain top talent. They select a group health insurance based on their financial capacity and requirements to secure their workers. However, many employers now go beyond traditional insurance coverage by offering claim or corporate buffer insurance. If you wonder what a corporate buffer is in insurance, you are not alone. In this article, we will explain the corporate buffer's meaning in insurance and how it works so you can choose the correct policy for your needs.
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What is a Claim Buffer in Group Health Insurance? Meaning, Benefits & Limitations
Corporate buffer insurance is an additional pool of funds set aside by an employer or an insurer. The objective here is to assist employees after they have used up their family floater benefits.
Whenever an employee's individual or family floater coverage sum insured is exhausted, the employer allocates funds from this buffer. Put simply, it is an approval-based benefit that acts as an extension of the traditional group health insurance.
Besides understanding the meaning of corporate buffer in health insurance, it is also essential to know how it works. Here's a breakdown of the process.
Employee first uses their individual or family floater policy's sum insured limit.
A company may decide whether to approve a corporate buffer based on the eligibility criteria it has set.
Employers will determine the funds allocated from the buffer. They must monitor buffer usage because once it is depleted, other employees must wait until the policy renewal.
Some companies replenish the buffer immediately, while others wait for the policy renewal.
Claim buffers or corporate buffer insurance do not apply to every employee or medical condition. Employers can set their own rules for eligibility and allocation. They can decide.
Corporate buffer in group health insurance offers the following benefits.
In today's talent wars, where there is a shortage of skilled workers, the corporate benefits package can help attract top talent.
Employees receive an additional layer of protection, ensuring reduced out-of-pocket expenses, even if their health insurance's sum insured is exhausted.
Raising the sum insured for individual employees can be costly for organisations. A corporate buffer allows for creating a pool of funds that can be accessed when required.
Companies can set their own criteria for the buffer amount, eligibility, and which illnesses are covered, among other factors.
Claim buffers in group health insurance are designed to cover the costs of critical illnesses and other unexpected medical expenses. Treatment for these conditions can be more expensive than standard medical expenses, making a corporate buffer an ideal option. Moreover, most health insurance policies don't cover critical illnesses.
Despite all the benefits, corporate buffers come with certain limitations, including.
Here's how employers can structure corporate buffers in insurance.
Now that you understand what a claim buffer or corporate buffer means, it's time to offer one to your employees if you haven't already done so. Create a corporate buffer structure and integrate it into your employee benefits program to attract and retain top talent.
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Reviewed by Dr. Harshita Dahiya 
Acko Technology & Services Private Limited
#36/5, Hustlehub One East, Somasandrapalya, 27th Main Rd, Sector 2, HSR Layout, Bengaluru, Karnataka 560102
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