Employers play an essential part in a company's growth. Regardless of how advanced technology becomes, it can never replace the contribution of human resources to strategising, planning, and carrying out arduous tasks.
However, to keep your best talent with you for the long term, you must also give them a safe and secure workplace and health insurance coverage. That is where group health insurance policies come into play.
Group health insurance plans are the ones that employers provide to their employees, regardless of their hierarchical status. Employees do not have to go through medical tests, which is one of the plan's main benefits. It means that even someone with a pre-existing ailment can still be covered without any restrictions. They also do not have to wait for the waiting period to be completed before receiving policy benefits.
Group health medical insurance is of two types: one for small groups, and the other covers a large number of employees. Let's discuss the key distinctions between them.
group insurance refers to health coverage that suits SMEs with a maximum employee size of 50. Also, per the IRDAI guidelines, a company qualifies to purchase a group cover only if its minimum full-time staff count is 25.
On the other hand, any company that has an employee count of over 50 can purchase a plan meant for large groups.
As discussed, the first difference between both plans is employee count. Another distinction is in terms of cost. The average price of insuring a single person under a small group plan is slightly higher than that of a large group.
For example, if you pay a Rs 1,00,000 premium to secure 30 employees, the average cost per person is Rs 3,333. On the other hand, if you pay Rs 1,50,000 to secure the health of 55 employees, the average cost is Rs 2,727.
Furthermore, large group insurance gives you greater bargaining power regarding coverage scope and rate.
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Both plans have identical inclusions under the insurance agreement. Here's what they cover.
- Hospitalisation expenses
- Pre-hospitalisation expenses
- Ambulance service
- Preventive care
- Lab tests
- Post-hospitalisation expenses
- Prescribed medicines
- OPD charges
- ICU expenses
The factors influencing the cost of group health insurance are the same for both small and large groups. Here's how.
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Company Size
By now, you must be aware that the larger the company size in terms of employees, the higher the policy premium will be.
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Age Group
While many feel that age has little bearing on group insurance coverage, the higher the average age of the employees to be covered, the greater the premium burden on the company. The rationale is that older persons are more prone to illnesses, which raises the likelihood of filing a claim.
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Coverage Duration
By selecting a policy with a longer term, the insurer will get more premiums while assuming that the risk factor remains constant. As a result, longer-term policies are less expensive than shorter-term ones.
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Business Type
you run a white-collar business where most of the tasks are performed by employees sitting in cubicles, your group health coverage premium will be lower. However, suppose your company involves mining or dealing with chemicals or other harmful substances. In that case, your employees are more likely to become unwell in the near future and file a claim for treatment. Given this, such enterprises will face higher premiums.
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Add-ons
Add-ons augment insurance by providing additional benefits beyond what the regular plan provides. For example, if you buy hospital daily cash, your insurer will provide a predetermined sum of money to the hospitalised employee every day throughout their stay in the hospital to cover necessary expenses. The more add-ons you acquire, the higher your coverage premium will be.
Small and large group health insurance differs in the number of employees required to meet the insurer's eligibility requirements. They also vary regarding the average cost of securing a single employee. Regardless of the differences, a group health insurance policy is critical for ensuring that your employees always have the resources to deal with any medical uncertainty that may arise. By providing this coverage, you can ensure that your most skilled employees stay with you for the long term.