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What Is Group Health Insurance Plan And How Does It Work?

Team AckoNov 8, 2021

One would be familiar with the logic that buying a product in bulk provides benefits as compared to buying a single item. If one enforces this logic with respect to health insurance, the resulting product would be called Group Health Insurance. In this article, let’s shed some light on what exactly is a Group health insurance policy and how does it work.

What Is Group Health Insurance Plan And How Does It Work

As the same suggests, a Group Health Insurance policy also called as Group Mediclaim policy is a health insurance policy that covers a group of people. These people in one “group” can be related in any manner. They can either be employees working in the same organization, people living in one area, relatives, friends, etc. However, Group Mediclaim policy is usually bought by employers to financially secure their employees in case of a medical emergency.

Features and Benefits of the Group Insurance Policy:

Group health insurance plans are beneficial for both – employers and employees. These plans provide a financial backup that can be used in case of hospitalization. Here are some of the features and benefits of the plan:

  • Pre- and post-hospitalization: The coverage depends upon the illness suffered by the insured. Pre-hospitalization expenses for 30 days are covered, i.e. expenses of treatment before getting hospitalized are covered. Also, Post-hospitalization is covered for 60 days after the date of discharge may be covered under the plan.

  • Hospitalization: Depending on the terms of your health insurance company, the group health insurance plan may provide coverage for hospital accommodation i.e. room charges, doctor visits, specialists fees, nursing charges, etc.

  • Nominees: The scope of a Group Health insurance plan extends not only to a group of individuals but also upon the dependents of that individual. Thus, instead of buying a separate cover for each member of a family, they are covered under the plan offered by an employer of one member of the family.

  • Domiciliary Hospitalization: Sometimes, an insured person is unable to get admitted to a hospital and instead opts for medical treatment at home. This is called Domiciliary Hospitalization. This may be covered under Group Health insurance.

  • Day Care Procedures: To avail the coverage of a health insurance plan, it is usually necessary to be hospitalized for at least 24 hours. Your insurer may cover you for daycare procedures that do not require 24-hour hospitalization.

  • Cashless Hospitalization: Some insurers have a wide network of hospitals. If you are hospitalized in one of such network hospitals, you can avail of cashless treatments. Here you do not have to keep a track of the medical bills and other documents to claim insurance. In fact, apart from the amount not covered, all other bills are settled directly between the insurance company and the hospital.

Also, Read: Importance of Group Health Insurance for Employees and Employers

Group Plan Vs. Individual Plan

Here are some key differences between Individual and Group Health Insurance:

Group Health Insurance Individual Health Insurance
Usually bought by an employer Bought by an individual
Medical Checkup may not be required Medical checkups may be required
Costs less as compared to individual health insurance plans Costs more as compared to group health insurance plans
Coverage cannot be customized as per specific needs Coverage can be customized as per specific needs

Also, check: Arogya Sanjeevani Policy

Exclusions of Group Health Plan

Below are the conditions under which your health insurance company will not accept a claim. Usually, the exclusions of a group health insurance plan are as follows:

  • Pre-existing Disease: A medical condition that the policyholder suffers from, before buying the health insurance plan is usually not covered. Some plans offer a cover for pre-existing medical conditions after the completion of a waiting period.

  • Dental treatment: These are usually not covered under a group health insurance plan.

  • Self-inflicted injuries: Any expenses incurred for the medical treatment for self-inflicted injuries are not included in these plans.

  • Replacement Surgeries: Surgeries like joint replacement, cosmetic surgery, etc. are not covered.

  • Vaccination charges: Vaccination/inoculation/cosmetic treatment is not covered.

    • Treatment for Parkinson’s and Alzheimer’s disease.

    • Expenses on vitamins and tonics irrelevant to treatment.

    • Injuries due to war, HIV, congenital diseases, etc. may also not be covered under group health insurance.

Also, read: Who is Eligible for Group Health Insurance?

The Bottom Line:

In today’s times, buying a health insurance cover is a good deal as you will be financially covered against expenses arising from hospitalization. These expenses have skyrocketed and can burn a hole in your pocket if you don’t plan in advance. You can save only a portion of your income but with a health insurance plan, you don’t have to worry about any mandatory savings just for the sake of medical expenses.


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