One of the most important employment benefits is the health insurance. For employees, it makes them secured with regards to health associated cost. For employers, it provides tax deductions. As per various surveys, health insurance is one of the main reasons for better quality recruitment, employee satisfaction and employee retention.
If you are an employer, you must be spoiled for choices. There are innumerable insurance providers offering different insurance packages for corporates. So how do you choose the right one? In this article, we share with you few pointers which will help answer the question.
Type of Health Insurance to go for
So, the first thing is to know which type of health insurance is right for you. Small businesses usually have a budgetary constraint and hence traditional health insurance plans are the right ones for them. Traditional health insurance plans have flexibility through which they can visit any hospital or doctor.
If your budget is higher, go for managed care plans. They come with a ‘fee for service’ through which employees can take the benefit of traditional insurance. These are more professionally managed than traditional insurance plans but come with a higher cost. Before choosing a plan, first decide what your business needs and what are the benefits you want to offer to your employees. You should make a list which should include points like maternity coverage, mental health, dental facilities, etc. You also need to consider what facilities you want to offer to your employees and what facilities to your dependants.
Choosing the right policy
The next task in hand, and the biggest of course is to choose the right insurance policy. Here are a few things to consider while doing the same:
Coverage: Study the details of coverage completely. Read the fine print, especially terms and conditions. Most policies have a limited coverage for particular conditions. This is true mostly for long term illness and pre-existing conditions where such low limits exist.
One thing, you should be clear of as an employer is the indemnity policy and the dread disease policy. In the hospital indemnity policy, a certain sum is paid each day that the employee is in the hospital. However, the level may or may not meet the daily cost of a hospital stay. Dread disease policies, on the other hand cover certain illnesses, but they are usually more expensive.
Cost: The second most important thing to consider is cost – both to the company and employees. The things to consider within cost include the cost of the plan, deductibles, co-insurance costs, etc. Then you should consider how much can the company afford and what percentage of salaries does it contribute. In case the company is unable to bear the entire cost, if some of the amount can be contributed by employees. In case an employee has to contribute something, it should be in line with the employee’s salary.
Restrictions: Before making the final decision, check out if the policy has any restriction which does not go in line with your business operations. For example, in some cases, the medical coverage does not cover hospitals across the country. However, if some of your employees travel for work frequently, you will need a policy which covers maximum hospitals even in remote areas.
Reimbursements: Reimbursements are a very important aspect. The coverage should be commensurate with the average hospital cost or doctor charges. If your employees have to shell out a lump sum amount even after having a medical insurance, then the entire exercise becomes futile. The best way to find if the reimbursement amount is sufficient is to check, verify the amounts from a physician.
Your employees trust you, they depend on you for their salary and other benefits. At the end of the day, if you make an investment for your employees, and then your employees don’t get the requisite benefit, both you and your employees will be at a loss. Hence, it is your duty to conduct due diligence before purchasing insurance for your employees.