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Why you should think beyond your office Mediclaim?

Group Mediclaim policies provided by employers are a big source of relief to millions of employees of organized sector. This is all the more useful to cover elderly parents, because the scope of covering them in other policies is limited and the cost is very high. Of late lots of changes are happening in the corporate health cover which will affect the scope of cover.

What has changed?

For most of the companies, Health Insurance was a loss making portfolio and now they started changing the conditions. Some companies are introducing a Co-pay clause, where you have to pay a pre fixed part of the claim. The Co -pay ratio is generally between 10% and 25%. So for every claim of say Rs. 100/- made, you have to pay Rs. 25/- and the balance Rs. 75/- will be paid by the insurance company (if the co-pay ratio is 25%). Some organizations completely excluded the cover for parents and some transferred the cost of cover of parents to the employees. Restrictions such as those on room rent and sub limit on claims, which were a part of individual mediclaim policies so far are slowly being added to group insurance covers also.

The employers are reducing the benefits because the insurance companies have increased the premium substantially because of the high claim ratios. This has forced the employers to negotiate for health cover with low premium by reducing the scope of the cover.

Restrictions in Parental coverage

Most of the employers are now offering cover for parents with some restrictions.

If the employer is offering cover with Co-pay option, you have to consider it carefully. If the benefits under such policy are coming with offers like pre existing disease cover, which is not offered by individual health policies in the market, you can go for it. You can also think of buying benefit policies offered by Life Insurance companies to boost the cover. You can claim under such policies, even if you have been reimbursed by the corporate cover.

If your employer is charging the entire premium for parental cover from you, the decision to go for it or not has to be taken after a cost benefit analysis. The terms of the group cover is also important here. Often health insurers are more generous while dealing with corporate mediclaim policy holders. Most group policies cover the pre-existing diseases, while personal health cover will exclude them during the first 1-4 years. But, if you are leaving the employer, the premium paid will be a loss because in most cases, you cannot transfer this cover to an individual policy, which you want to take at that time. Investing in an independent personal policy will be always worth because, you need not worry about so many complications in future.

Changes in Hospital Network

Most insurance companies are now restricting the network of hospitals, you can access in corporate mediclaim. If you are opting for other hospitals, then there will be co-pay applicable. Another way the employers are considering is replacing the expensive hospitals in the network with comparatively cheaper ones. There are hospitals which are charging higher rates to insured patients and this has resulted in all these mess.

Disease wise restrictions

Don’t expect your entire hospital will be reimbursed in corporate mediclaim in future. Some of the companies are fixing sub limits for certain diseases. For common procedures like angiography, angioplasty, cataract, knee replacement etc. the company will allow a fixed amount proportional to the sum assured. The shortfall has to be paid by you.

Claim settlement

Insurance companies are getting strict about the submission of claim documents. Some are insisting that the claim documents for reimbursement claims should be submitted within 30 days of discharge from the hospital. So study your policy conditions carefully, so that you will not miss out the valuable benefits.

Why you should go for an extra health insurance policy?

Most employees are not interested in taking an additional health cover because the entire family is covered under the corporate group cover. In the present job market, switching jobs are very common for employees. What will happen, when you are changing the jobs? Whether the cover continues during the notice period? Will your new employer have a medical cover for family also? What about the health cover after your retirement?

Answer to all the above questions will point towards the need for going for an extra health cover in addition to the corporate health cover. With lot of life style diseases and increasing corporate pressure and resultant health issues, we cannot afford to be without a health cover even for a day! When we are changing the jobs, normally there will be a notice period of 3 months, where the corporate health cover is not available in most cases. Similarly, the new organization, where you are joining may have some restrictions in claims for some time. All these will expose you without a cover for sometime, which is dangerous.

As we nearer retirement, most companies are reluctant to cover us even with high premium. If at all it is available, there will be lot of restrictions and limitations.

Health insurance premium paid for self and parents will qualify for tax benefit even after the Direct Tax Code (DTC). It is also advisable to create medical contingency fund by way of monthly savings in goodMutual Fund.

General insurers have started offering continuity of features of group mediclaim policies to employees even after retirement. The only catch is that it no longer remains a group policy and the premium will be higher than what the former employer paid for the individual. But, features like inclusion of pre-existing diseases and continuity clauses remain with the policy while waiting periods for covering certain ailments are waived.  But these policies are yet to catch up. But if your employer is not providing this, it will be difficult to get a policy, when you nearer your retirement.

It is better to go for an extra health cover with lifetime renewal facility, when health is on your side.

7 Comments

  • vijay Posted August 1, 2011 12:25 pm

    This is good article for investors. must read.

  • Rahul Posted August 3, 2011 12:15 pm

    Good informative article. Could you pl explain the term lifetime renewal facility for mediclaim poilcy ?

    • Finvin Posted August 3, 2011 1:11 pm

      Most health insurance companies allows the policy holders to renew their policies up to age 70 or 75. But Max Bupa and Apollo Munich allows the policy holders to renew their policies till death, even though the premium will increase with age and health conditions. This is Life time renewal.

  • Suresh Sreedharan Posted August 7, 2011 1:53 pm

    Excellent informative article giving common-sense advice…

  • lrkumar Posted March 25, 2012 7:17 pm

    wholly new perspective for an employee like me who rarely considered anything outside the employer provided benefits, savings, insurance etc. is definitely thought provoking and action initiating article. thanks

  • Rahul Gawande Posted July 30, 2013 1:41 pm

    Please be confirms is there any compulsion that employer needs to give mediclaim to each employee those who are not covered under ESI.

    • Melvin Joseph Posted August 6, 2013 6:17 pm

      Nothing like that.

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