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Importance of Group Health Insurance for Employees and Employers

Team AckoJan 18, 2024

Due to the recent pandemic, health insurance has gained the right popularity it has always deserved. Now people are beginning to realise the importance of creating a strong health insurance portfolio with different types of plans and how helpful these can be at the time of a medical emergency. One of such types is the Group Health Insurance for employees. This plan is provided by the employer, mostly free of cost as an added advantage of employment. Let's take a look at why this plan is important for both - employees and their employers.




Why is Group Health Insurance Important for an Employee?

Group Health Insurance policies are health insurance plans for employees that provide a financial back-up to the employee and his/her family members. A good health policy full of useful features provides a helping hand when a medical issue is faced. Here are the reasons why every employee should have a Group Health Insurance plan:

  1. Waiting period on pre-existing diseases is zero days: Usually, the treatment for pre-existing diseases like diabetes, high blood pressure, hypertension, etc. cannot be claimed under a usual health insurance policy without waiting for a certain amount of time. However, these ailments are covered from day one under a Group Health insurance plan. Thus, an employee does not have to bear the expenses of getting treatment for pre-existing diseases if he/she is covered under the employer’s health insurance plan. This is one of the major benefits of Group Health Insurance.

  2. Quick claims without much hassle: Since, a Group Health Insurance Plan for Employees is a benefit for the employee, their claims are handled on priority and the employee does not have to face much hassle during the process. It is mostly looked after by the Third Party Administrator and the insurance company.

  3. Maternity coverage without additional costs: Maternity and childbirth are usually covered under a health insurance policy as an add-on, i.e. the policyholder needs to pay an additional premium to buy this coverage. But if a person is covered under Group Health Insurance for Employees, he/she does not have to pay any premium. The major part of the hospital bill will be borne by the employer's insurance company. Moreover, the newborn baby is also covered under insurance for 90 days after birth. After 90 days, the baby can be covered as a dependent in the base plan.

  4. Up to 5 dependents covered: The policyholder needs to pay more premium for each member insured under the plan in a normal health insurance policy. In a Group Health Insurance policy for employees, up to 5 dependents are usually covered without any additional premium. 

  5. No need for a medical check-up: Most employee health insurance companies do not require the employees of an organisation to undergo a health check-up for getting enrolled under the plan. In a normal scenario, a health insurance policy is usually not issued without a medical check-up.

Why is Group Health Insurance Important for Employers?

The equation of the employee-employer relationship is changing in modern times. Most companies now recognize the importance of their workforce and take actions to retain hard-working employees. Various employee-benefit schemes are the result of these actions apart from offering a decent pay scale. One of such benefits is an adequate health insurance plan. Let's take a look at why it is important for an employer:

  1. Tax benefits: Buying health insurance for employees gives the company tax benefits.

  2. One of the factors for being employee-centric: Many organisations are now shifting their focus from being company-centric to becoming employee-centric. This allows a sense of motivation among the employees and helps the company retain a hard-working group of employees.

  3. Employees get a sense of security: Financial security in the time of need makes an employee feel secured. It also allows them to get the best possible medical treatment for an ailment.

Also, Read: 5 Reasons Why Group Medical Insurance is Beneficial for Employees

Importance of Buying Add-on:

Add-ons increase the scope of a health insurance policy. These provide additional coverage in exchange for additional premium. In a Group Health Insurance Policy, the option to buy add-ons lies with the employer. The employee does not have much control over the coverage of the health insurance policy. Some of the insurance add-ons in health insurance are Maternity Benefit, Room Rent Waiver, Critical Illness Cover, Hospital Cash, etc. 

Wrapping Up

A Group Health insurance plan for employees is beneficial until the employee is associated with the employer. Such plans get terminated with the end of employment with that particular company. These also end upon retirement and the employee needs to buy a new health insurance plan. This can pose a slight problem in terms of medical check-ups and higher amount of premium. Thus, it is highly advisable that a person should create a health insurance portfolio that includes plans like Individual, Group, Family-Floater, and Critical Illness Health insurance plans to secure finances during a medical issue.

Also, Read: COVID-19 and mental health

Frequently Asked Questions

Is a Group Health insurance plan sufficient for the entire family?


This depends upon the coverage of the Group Health Insurance plan. You can take a look at the coverage provided by your employer by requesting for the copy of your health insurance plan. Usually, hospitalization, day care procedures, maternity benefits, etc. are covered under a Group Health Plan for employees.

Is there a waiting period on availing maternity benefits under a Group health insurance plan for employees?


No, usually most insurance companies do not enforce a waiting period on employee insurance plans. This is one of the biggest benefits of such health plans.

Can I avail cashless claims under a Group Health insurance plan?


Yes, it is possible to avail a cashless claim under a Group Health insurance plan however, the insured needs to get treated in a network hospital.

How can I raise a claim against an employee insurance plan?


You can get in touch with your HR and ask for the exact process of raising a claim. Usually, you need to fill the claim form and attach the required documents to raise a claim. Note that, you need to inform your employer and the insurance company about the claim when you or the insured person gets hospitalized.

Do I need to intimate the insurance company even when I am paying the hospital bill and intend to raise a claim later?


Yes, you need to intimate the insurance company about the treatment and a possible claim at the time of getting an admission in the hospital irrespective of the type of claim you intend to raise.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions.

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