Group health policy cover, uncovered

Purchase your own personal health cover to supplement the one provided by your employer

Recently there was a news report about a Mumbai-based retiree who was part of his employer’s group health cover. He was given to understand his parents were covered under the policy. He even paid an extra premium for this. His company reimbursed him once for his mother’s treatment. When he asked for reimbursement for his father’s treatment, it refused and asked him to refund the payout made towards his mother’s treatment, saying parents were not covered. Thankfully, the District Consumer Disputes Redressal Forum came to the retiree’s rescue and asked the employer to compensate him.

This story underlines the need for everyone who is part of a group health policy to obtain clarity from the human resource department on which family members are covered, especially after retirement.

“Only a few public-sector companies offer health cover to employees after retirement,” says Mahavir Chopra, founder, Beshak.org.

Three scenarios are possible after retirement. “One, the health cover from the employer ceases. Two, it continues for the policy period. Three, your company may have created a group policy for retired employees which you may join,” says S Prakash, managing director,

Star Health and Allied Insurance. Whether your parents will be covered after retirement depends on the design of each company’s policy, he adds.

Easy-to-get cover

The entry barrier is lower in a group policy. “When you buy a retail health policy, the insurer does a health assessment,” says Subramanyam Brahmajosyula, head-underwriting and reinsurance, SBI General Insurance.

This is especially true for older people. This is waived in a group policy.

“The enrolment process is shorter and easier in a group policy,” says Prasun Sikdar, managing director and chief executive officer, Manipalcigna. Group policies do not have the twofour-year waiting period for pre-existing diseases that retail policies have.

Retail policies are uniform. “Group policies are always customised, according to the needs of the group,” says Prawal Kalita, employee health and benefits leader, Mercer Marsh Benefits India.

No cover once you exit

Their biggest shortcoming is that a person doesn’t have this cover once he ceases to be a member of the group. The sum insured, too, tends to be low.

The premium is re-negotiated every year. “If your organisation has budgetary constraints, the benefits of the policy could get curtailed,” says Chopra.

Exercise portability option

At the time of exiting, they can port to an individual cover from the same insurer. “With porting you get continuity benefits. If you have already spent three years in the group policy, then you will only have to serve a waiting period of one year for coverage of pre-existing disease in the individual policy,” says Kalita.

However, portability requests can be turned down. “Insurers may ask for medical tests and may deny portability in case of a major health declaration,” warns Chopra. Hence, buying a base cover of your own is a must.