If you feel relaxed, thinking corporate health insurance has got you fully covered. Stop! You may be inviting a bill of lakhs of rupees for which you are unprepared. What if your employer provides coverage of ₹2 lakh, and your medical bill is beyond it? What if it does not cover the room rent up to the actuals? What if there are limitations to coverage that you never knew of? Have you ever thought of it?
These questions come from a personal experience, which was an eye-opener as to why having a personal health insurance policy is not an option, but a necessity in today’s times.
Understanding Corporate Health Insurance
First, let us understand the basic coverage provided under employer insurance. Corporate health insurance is a medical insurance policy provided to employees by their employer as part of the company benefits package. It most often covers basic medical expenses like in-patient hospitalization, pre- and post-hospitalization, daycare procedures and ambulance charges.
Also known as group health insurance, it covers all employees under one policy. The premium is usually paid by the employer. If you extend coverage or customize the plan, you may have to pay a partial premium. The coverage starts as soon as you become a part of the company, and ends immediately as you leave your job.
Limitations of Corporate Health Policy
While employer health insurance provides coverage benefits and may seem enough, it has many limitations. Without realizing this gap, you won’t be able to understand how and where a corporate policy falls short and build a false sense of security.
● Low Coverage: Most policies have a limited sum insured, usually ranging from ₹2 lakh to ₹5 lakh. This amount is usually not enough to cover advanced surgeries or longer hospitalizations.
● Coverage Ends when Job Ends: Another critical problem is that corporate insurance ends when you switch jobs. If you decide to take a career break or get laid off, your insurance coverage immediately ceases, leaving you financially exposed to medical uncertainties.
● More Limitations on Coverage: Corporate health policy does not provide full coverage and usually has restrictions on some diseases, specific medical treatments or procedures, room rent, hospital networks and add-ons.
● No Value-added Services: It may not offer additional features like restoration benefits, OPD benefits, no claim bonus, global coverage, premium lock-in at a younger age, etc.
● Continuity Gap: Corporate insurance often covers pre-existing diseases (PEDs) from day 1. While this may look like a big advantage, this benefit ends with the policy. And if you buy an individual health insurance policy when corporate cover ends, you may have to serve the PED waiting period. It means that if a pre-existing condition was previously covered under employer insurance, it will now not be covered until you serve the waiting periods.
● Limited Coverage for Family Members: It often provides no or low coverage for family members. Hence, if a family member gets hospitalized, your group employer health insurance will not adequately cover their medical expenses. Most corporate health insurance plans provide coverage for parents only at an additional premium.
● No Customization: Usually, benefits like sum insured, inclusions, add-ons, cashless hospitals, etc., are fixed by the employer. Corporate insurance provides no control or flexibility over policy coverage, i.e., you cannot customize it based on your or your family’s specific needs.
Real-Life Example of How Only Corporate Insurance Left us Financially Exposed?
A few days ago, my colleague, who is just 24 years old, fainted and was not regaining consciousness even after half an hour. We took him to a nearby, reputed hospital. On enquiry, we got to know that he just has a corporate group health insurance policy (which was of ₹2 lakh) and does not have individual health insurance.
He was admitted to the ICU. Though he had employer health insurance, it covered medical expenses only on a reimbursement basis. The cost had to be paid out of pocket first. We were asked to deposit around ₹1.5 lakh upfront before any treatment. His parents had to arrange funds immediately. They took out money from their retirement savings.
He was in hospital for 3 days, and the total bill, including ICU charges, room rent, doctor’s fees, medicines and diagnostic tests, was around ₹3.5 lakhs. The family had to dig into their savings and investments to arrange funds in such a short period of time.
The incident shook each one of us. It was not just emotionally stressful, but it also gave us a reality check of how one unpredictable medical situation can burn a hole in our pockets. It unveiled the gaps in corporate insurance, making us realize why having personal health insurance is crucial.
How Individual Health Insurance Completes Your Coverage?
Whether or not you have a corporate policy, you must buy individual health insurance. An employer policy can serve as a support system alongside personal health insurance, but completely relying on it to handle medical crises can be risky.
Personal health insurance provides basic benefits offered in a group health insurance policy with better coverage, flexibility and value-added services. Since there are multiple insurers offering a wide range of health insurance plans, you get more options to choose what suits you the best.
With individual health insurance, you get:
● Continuity benefits, as your coverage is not dependent on your job. Even if you switch jobs or retire, your health insurance benefits will continue until you stop paying the premium.
● Option to choose a sum insured as high as ₹1 crore.
● Unlimited restoration benefits, meaning once you partially or fully exhaust your sum insured, it will be restored to the base amount. It can be refilled once or unlimited times a policy year, depending on the policy’s terms and conditions.
● No claim bonus (NCB) benefit if you do not make any claim during a policy year. Some health insurance plans allow you to get the NCB benefit irrespective of claims made, and some policies allow the bonus amount to accumulate up to a specific percentage.
● Continuity for PED waiting periods. If you have served a PED waiting period under one policy, you are not required to serve it again if you change the policy or insurer.
● A wider network of hospitals, letting you choose a better hospital per your preference.
● The flexibility to customize the plan based on your specific coverage requirements. For instance, if you feel at risk or your family has a history of heart diseases, you can buy a disease-specific plan to ensure comprehensive coverage or if you travel abroad a lot, you can choose a plan that offers global coverage.
● OPD benefits, annual health check-ups, maternity coverage and non-medical expenses coverage. These may be provided as an in-built benefit in some policies, while others may offer them as riders.
● More choices for optional covers like reducing PED and other waiting periods, critical illness cover, daily cash benefit, compassionate visit, co-payment options and room rent modification, among others.
● Unlimited sum insured, implying that medical hospitalization and treatments shall be covered up to the actuals.
● Freedom to choose from multiple plans and different insurers.
● Option to port policy and change your insurer if you are not satisfied with their plan benefits and services.
● Option to enhance coverage through top-up health insurance plans.
You should choose an individual health insurance plan that matches your medical needs, health history, and budget. To make the right choice, it’s wise to explore health insurance comparison portals like Policybazaar, where you can evaluate plans based on coverage, network hospitals, co-payments, and additional benefits.
Final Verdict
While employer health insurance provides coverage to help you manage finances in a medical emergency, it alone is usually not enough to cover medical bills. There are many limitations associated with it, such as it covers you only till the time you are employed by the company, has sub-limits on medical procedures, does not always automatically cover family members and does not offer continuity benefits. Hence, individual health insurance is needed to fill the gaps and get maximum coverage benefits.
Corporate insurance is not designed to meet large healthcare needs. It can be treated as a short-term benefit, but it cannot act as a long-term safety net. It is good to have, but it cannot replace the need for a personal health insurance plan.
Disclaimer: This article is published in association with PolicyBazaar and not created by TNM Editorial.