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Is Group Health Insurance or Employer Sponsored Health Insurance Sufficient?

Published On Mar 17, 2019, Updated On Dec 04, 2020

Everyone wishes to get a job in a good company for the reason that there are a bunch of benefits offered to the employees in addition to the salary. One of the most important perks which a company provides to its employees is a group health insurance plan. This is generally provided at no cost to the employees. Many salaried employees are lured with employer-provided insurance plans.

Benefits of Group Health Insurance

Group insurance plans generally provide coverage for pre-existing condition. The policy is not denied irrespective of higher age or any familial history. Planned health expenses coverage, such as pregnancy and laser eye surgery after a predefined “waiting period” are provided. There is also a benefit of an outpatient expense coverage. Premiums are usually low in relation to the sum assured as compared to the individual insurance plans.

There is no denying fact that the group health insurance comes with some great benefits. But even with these benefits group plans are not enough to cover all your health-related expenses. Here’s an answer

Disadvantages of Group Health Insurance

1. No Guarantee on Continuity of Plan

Group insurance is valid only for the period of employment with a particular organization. Quitting the job means termination of the policy. Even during the intervening period or between jobs, the employees or their families are not covered. There is also a possibility that your new company may not have the benefit of employer sponsored health insurance benefits. Whereas, individual health insurance plans are not linked to one’s continuation in the job. It can be renewed or extended as long as insured wants. The continuity of the policy does not depend on the organization for which the insured is employed.

2. Customized Options Not Available

There are no customized options available in employer-provided health insurance plans. Many companies are even excluding elderly parents from the policy provided to their employees. There may be various expenses, which may not be covered under these policies. In individual plans, there is no limitation on the minimum, and maximum sum assured. Both the pre and post hospitalisation expenses such as doctor's fees, ambulance charges, nursing charges, admission fees, diagnostic costs, etc. are covered under individual plans.

3. No Certainty of Coverage for Immediate Family Members

Group health insurance plan comes with the medical coverage for the employees as well as coverage for the immediate family members. But once you voluntarily or involuntarily leave the employment, you are financially vulnerable not only your health but also of your loved ones. There is no certainty of the continuation of the plan. You are always at the risk of incurring heavy costs of any unplanned medical expense.

4. No Coverage for Critical Illnesses

Group insurance policies may negotiate on various factors when it comes to coverage for illnesses. Critical illnesses such as stroke, cancer, heart surgery, organ transplant, etc. are costly to treat and are generally not covered under group policies.

5. Waiting Period Clause

For planned health expenses coverage such as pregnancy and laser eye surgery, there is a pre-defined “waiting period.” The time you exit your group insurance, your waiting periods start again. Whereas, in individual health insurance plans once the waiting period is over, you can receive benefits under your health policy.

6. Termination of Plan on Retirement

Unlike an individual plan which can be renewed lifelong, the coverage for group insurance plan gets terminated once the policyholder retires from his job with a particular organization. It is dependent on the employee’s association with the employer. At the age of retirement, it is really difficult to get new health insurance. Even if you manage to get health insurance, the premium could be very high. You are also at the medical risk while you are under your new policy’s waiting period.

Group health insurance plans are focused on providing medical coverage to their employees at the lowest cost. In the quest of minimizing the cost, the employers and the insurers seek to provide bare-minimum coverage. These plans are limited in terms of the continuity of coverage, the inclusion of dependents, coverage for critical illnesses and surgeries, etc. A person depending only on his employer's health insurance should know that he and his family may not be fully covered. These plans are meant for ordinary and routine health expenses. To secure yours and your loved one's future, you need a plan with assured lump sum benefits. The plan that reimburses for most of your pre and post medical expenses. Have a look at the list of the best insurance plans that you can choose from with adequate coverage and features as per your needs.

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