We rarely check the details of the benefits which we receive without paying anything from our pocket, especially because that comes as an add-on and we are happy to get something extra. The same thing goes for the employer based health insurance policy which comes as a perquisite with our salary. Getting a job in a good company makes you eligible to receive various benefits other than your salary and health insurance policy is also a part of it. But with advantages, there are also many limitations of employer provided health insurance policies which can keep you away from availing any benefit and thus it becomes necessary to check that whether your employer based health insurance policy is enough for you or not?
You must understand the various advantages and limitations of an employer’s health policy, so that you can decide according to your need and situation, that whether your employer’s health policy is enough for you or not.
An employer’s health policy covers pre-existing diseases like heart disease and diabetes from day one of the policy which is not available in individual health insurance policies. The amount of premium is also very low in case of employer’s health insurance policy and you don’t need to go for any medical check up before taking the policy. An employer’s health policy also offers inbuilt maternity benefits which is not available in all the individual health insurance policies.
Instead of these advantages, your employer’s health insurance policy may fall short in many circumstances because of its various limitations.
So now let us understand those limitations of an employer’s health policy which can keep you away from availing any benefit.
Amount of Sum Insured
Having the right amount of sum insured is very much necessary for availing the benefits of your health insurance policy and that’s why proper analysis is necessary to choose the right amount of sum insured. Different people have different needs and conditions, and that’s why the right amount of the sum insured is different for everyone. But in employer’s health policy, everybody gets the same amount of sum insured, regardless of their age and health condition. Most of the companies offer a sum insured of Rs.2-3 lakh for everyone and you don’t get the option to make any changes to it, while most of the experts recommend that an ideal sum insured should be five to eight times of your annual salary. So analyze the sum insured of your employer’s health policy on the basis of your medical need and health condition, to assess whether it is enough for you or not.
Coverage for Dependents
One of the most important aspects of having a health insurance policy in India is to cover your children, spouse and parents under the same plan. It helps you to minimize or pay nothing for the hospitalization expense of your family. But most of the employer’s health policy covers their employees only. So even after having a health insurance policy, hospitalization expense of your family has to be paid from your pocket. There are some employer’s health policies which provide cover for your children and spouse, or your parents. In any case, it will not cover your whole family.
Change in Terms and Condition
The terms and conditions of the employer’s health policy can be changed anytime during the policy and you can’t do anything about it. They may add new clauses which will increase your limitations, remove clauses which covered pre-existing diseases or even remove your dependents from the cover. Your employer controls your group health insurance policy and any change can be made without any notice which may prove to be a big drawback for you.
Cover for Critical Illness
Cover for critical illness is one of the biggest advantages of a health insurance policy, but an employer’s health insurance policy covers only few critical illnesses under their policy. The number of critical illnesses covered in an individual health insurance policy is relatively higher than employer’s health policy. So you cannot always ensure that the critical illness, you are diagnosed with or prone to, will be covered under your employer’s health insurance policy. So know the types of critical illnesses covered in your employer’s health insurance policy and if it falls short of your requirement, then it is better to go for an individual health insurance policy.
Coverage Linked to the Continuation of the Job
The life of your employer’s health policy is linked to your continuation of the job. Once you resign from your company or even quit the job, your employer’s health policy will be terminated. In such case you will be not be covered under any health insurance policy till your next job. It might also be possible that your next job will not be providing any health insurance policy or will have more limitations than your previous policy.
Post Retirement Coverage
A health insurance policy becomes more effective with the advancement in age because at such stage of life, need of medical attention becomes frequent. But as you retire from your company, your employer’s health insurance policy is taken away from you. You don’t even get the option to renew your employer’s health policy and buying an individual policy at an advanced age will become a very costly deal for you as the premium amount of health insurance policy is directly linked to your age.
Co-Payment and Room Rent
An employer’s health policy has a Co- pay clause, which makes you pay a part of the total expense incurred and the rest is paid by the company. This can be a big disadvantage if you need frequent medical attention. In such case, every medical expense will become a financial burden for you even after having a health insurance policy. An employer’s health policy has limits on room rent also which reduces the allowance for room rent to almost half of the original rent and the rest will have to be paid by you.
So, not getting an option to accept or reject your employer’s health insurance policy doesn’t mean that you shouldn’t analyze it. An employer’s health insurance policy comes with many benefits and limitations and deciding on whether it is enough for you or not is based on your need and condition.