Look Beyond Your Group

     Print Edition: July 2012

While providing health cover to employees is not compulsory, companies do so to retain talent and increase productivity. However, with changing economic conditions, firms are likely to reduce benefits.

Some planning can help you avoid unpleasant surprises. Medical expenses can deplete your savings and so necessitate the need to buy a cover over and above the employer's group policy.

Learn the ins and outs of your employer's plan. Health insurance is an annual contract and can be changed according to the company's requirement at the time of renewal. So, review all inclusions and exclusions every year. The employer can opt out of benefits like maternity and parental coverage. The following points will help you understand whether your group health policy is sufficient or you need an additional cover.


1. Not All Your Family Members Are Covered
Generally, group policies cover employee, spouse and two children. Some also cover dependent parents. But there has been a steep decline in parental coverage of late. If your parents are not included, it is advisable to buy a separate policy for them as against including them in the family floater. This is because the elderly fall ill more frequently. Moreover, a separate plan for them will get you a tax rebate up to Rs 25,000.

2. Cover Size Is Inadequate
Keep in mind medical costs in your city. In critical illness, expenses may be higher than the cover or the patient may require multiple hospitalisation, which may make the cover insufficient. In such a scenario, there are two ways to increase your cover-buy an additional policy, possibly a floater one, for the entire family, or a top-up plan which provides cover over and above the existing policy.

A point to be noted here is that top-up plans have huge deductibles, that is, thresholds. These are initiated only after the claim amount exceeds the deductible.

Assume that your employer's Rs 2 lakh cover is exhausted. Now, if you have enrolled under, say, Royal Sundarams Super Health XS Plan (a top-up plan), with a deductible of Rs 2 lakh and a cover of Rs 2 lakh, only the amount paid over and above your group policy will be reimbursed.

3. Claim Settlement Requires Co-Payment
Your employer's group health cover may have a co-payment option with a lower premium. Co-payment is generally 10-20% of the claim amount. Hence, large claims can hit your finances.

If your employer's cover imposes a 20% co-payment, it means if the hospital bill is Rs 2 lakh, you will have to pay Rs 40,000 from your pocket. Depending on expenses or requirement, you can use both your employer's and own covers.

4. Cap On Surgeon's Fee
You would definitely want to consult and get operated by a top expert in the field. However, in such a case, consultation or surgery fee may be a major part of the total expense. Generally, group policies have sub-limits on ailments and medical aspects, including the surgeon's fee. This means you may have to shell out money from your pocket. The market offers individual health insurance policies with full coverage without caps.

One should not be relaxed that he/she is covered by a group health policy. In the worst-case scenario, like downsizing, a person without individual health insurance policy can be exposed to risks till the time he is covered again. Buying a separate cover for self and family will help you prevent a dent in your savings.

Managing Director, Royal Sundaram Alliance Insurance

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