Should You Include Parents in Corporate Health Policies?

Such health policies, often given free of cost in the form of perks, may not extend to other relatives of employees, such as their parents and in-laws. But, some companies allow the employee to pay an additional premium and extend policy coverage to these relatives as well.

However, the moot question is whether it is beneficial to cover your parents under the employer’s group health insurance plan? The answer lies in understanding the implications of such a policy. Also, note that such policies are tailor-made and not standardized.

Here are some of the benefits of a corporate health insurance plan:

No pre-medical check-up: An individual or family health policy covers a pre-medical check-up along with other formalities. However, there is no requirement of such check-up under the group medical policy offered by the employer – either for the employee or for the members of his family, including his parents.

No Paperwork: For a retail health policy – ​​whether it is for an individual or a family – an insurer usually prepares a proposal form which details the health history of the individual and the family, any pre-existing diseases (PEDs), smoking or drinking There will be description of habits etc. before underwriting the policy. In case of a group medical policy, the employees are not required to do any paperwork. Also, they do not need to share medical history details to get coverage under the group policy.

Zero Waiting Period: Generally, retail health policies come with a waiting period – a period of time when you can avail cashless hospitalization facility or claim any hospitalization expenses for any PED or specific diseases . Many insurers also impose a waiting period of two to four years in case of PEDs or specific diseases. But, there is no such waiting period in case of corporate health policy.

Rakesh Goyal, director, Probus Insurance Brokers, said, “Normally if a senior citizen wants to buy a retail health policy, he has to go through a medical examination. Also, there will be a waiting period, but in a group insurance policy the parents get coverage from day one. Also, the premiums are low, and there is coverage against PEDs.”

Note that Group Policies have their limits.

Limited Coverage: Employees generally do not get the chance to choose the sum insured in a group medical policy. Many companies only cover 3-5 lakhs, which may not be sufficient for extended family including your parents. It is likely that elderly parents account for a higher number of claims made under a group medical policy in a single year. In such a case, it may leave inadequate or no coverage in case other family members are hospitalized in the same year. Hence, it is always better to have an additional retail health policy, without which the employee will have to bear the entire cost once the group health coverage limit is reached.

Employer’s Discretion: Vivek Chaturvedi, Chief Marketing Officer, Digit Insurance, said, “While the process of getting you and your family covered under a group policy is seamless, there is no guarantee that the benefits offered by your employer will always be the same. ” The selection is at the discretion of the employer, and the company may choose to exclude your parents from the policy in future. They may also modify the Medicare benefits offered by reducing coverage or discontinuing health insurance altogether. This could leave your parents without any health coverage. Therefore, it is prudent not to depend solely on the group policy for the medical needs of your parents.”

Job Change: Companies offer group health plans alone to their current employees. The policy lapses if you change jobs or are laid off.

tax benefit: Employees who pay extra premium to get better medical coverage for themselves or their family or even extend the policy coverage to their parents can claim tax deduction of up to Rs. . 1 lakh (under section 80D of the Income Tax Act). Chaturvedi said, “If an employee has enhanced medical coverage using a top-up policy or has taken additional cover for parents and is paying the premium, tax benefits can be availed for the same. ‘

Should you opt for a group health policy?

You should weigh the pros and cons and determine your own answer to this question. “If you do not have an individual retail health policy for your elderly parents or you are struggling to find an adequate retail policy, it makes sense to cover them under a group policy,” Chaturvedi said.