Insurance companies have begun cutting corners on group health policies following a high claims rate. That means that it might make sense for you to go for your own individual policy to ensure that you get the benefits you are looking for.
Group health insurance policies are bought by companies to cover an employee and his family’s hospitalisation expenses. These provide cover of pre-existing diseases and maternity benefits that are not provided in individual health policies.
The claims ratio — the share of claims payable as a percentage of premiums received —is in excess of 180 per cent for group health policies, forcing the four public sector insurers who control 65 per cent of the market to cut back on benefits after raising premium rates.
New India Assurance, Oriental Insurance, United India Insurance and National Insurance have unanimously decided that effective this week, family mediclaim (health insurance) rates and coverage will apply for new group policies issued for corporates having less than 1,000 employees.
“This means that corporates will shell out at least 100 per cent more than what they are paying today while not getting coverage like pre-existing diseases and maternity. Additionally, new employees will have to wait for a month for their cover to get activated,” said Rahul Aggarwal, CEO, Optima Insurance Brokers.
Also, corporate buffers, a reference to collective health cover for employees used when an individual cover gets exhausted, now cover only a few major illnesses.
“By the end of the year, we hope to reduce our company’s claims ratio to 90 per cent and make the business viable by next year,” said G. Srinivasan, chairman-cum-managing director of United India.
Pavanjit Singh Dhingra, vice-president at Prudent Insurance Brokers, said most companies have headcounts of below 1,000.
“India does not have social security system and for many people their company provided health insurance cover is the only source,” he said.