People working in organizations, institutions, and private firms usually aver that they do not need a separate health insurance policy as their firm already covers their health insurance needs as part of a group health insurance plan. While employers do provide health insurance to sweeten the overall package offered to an employee, a pertinent question is whether the company provided health insurance is sufficient to meet expenses adequately during medical emergencies. There is no denying that some employer-provided health plans are comprehensive in their coverage and extend coverage to dependents – including parents and children. On the other hand, there are other policies that restrict dependent coverage only to four members – in this case, you will have to forgo coverage for either your aged parents or your children.

A report by ICICI Lombard revealed that as many as 76% of insurance policies offered by employers have co-pay and room-rent limiting clauses. Here’s some additional context around what these clauses entail:

Co-payment:

If your employer provided insurance policy stipulates a co-payment clause, this means that you agree to pay a part of the overall expenses incurred towards your medical treatment. The percentage, of course, may vary depending on the insurer and their agreement with your employer.

Room-Rent:

Insurance companies usually cap room-rent as a percentage of the overall sum assured – it is usually set at 1%. So if your employer provided plan has a sum assured of Rs.1,50,000, then your room rent per day will be capped at Rs.1,500 per day – assuming a 1% upper limit. Now, you will have to do a bit of a homework to understand if the room-rent is adequate, especially if you prefer to put yourself up in a single occupancy standard room. If you live in a metropolis, it is unlikely that the room rent can be covered for a smaller amount.

Here are six compelling reasons why going for a non-company provided health cover will keep you in good stead:

  • a. Employment status:

    Your employer provided insurance is valid only as long as your employment with the firm continues. The insurance cover ceases as soon as your employment terminates regardless of the reason for the same. Now, in the event you are faced with a medical emergency during the interim period if you have switched jobs, you will end-up having to pay from your pocket.
     
  • b. Coverage for Dependents:

    As mentioned earlier, some employer provided health plans only cover four family members which will take care of self, spouse, and children. If you have dependent parents, then you are at a disadvantage with regards to the policy, since older people are the ones who need health cover the most.
     
  • c. Employer Insurance a Perk:

    Please remember, an employer provided insurance is a perk. The extent of cover – including the amount and dependent coverage may be lowered at any time at the discretion of your employer. An employer is not obliged to extend insurance cover to one’s family members by law. Given today’s spiraling cost of medical treatment, health insurance is a serious protection cover one should opt for – even though it is not mandated as per the law. Depending solely on a cover which is no more than a perk is ill-advised.
     
  • d. Not Portable:

    If you go for an independent health cover, the bonus accrued can be ported if you decide to switch. However, in the case of an employer provided plan, the same is not portable.
     
  • e. Post-Retirement Coverage:

    Generally, people tend to need medical assistance post 50 years of age. If suppose, you decide to retire early, then your heath cover also ceases post retirement. Also, if you have to go for a health plan at a later stage, the premium outgo will be significantly higher. Also, most insurers will not cover pre-existing diseases. Further, the health insurance plan will be issued only after thorough medical examination of the proposer.
     
  • f. Changes to Terms & Conditions:

    If your employer decides to reduce the expenses incurred towards group health insurance and thereby alters the terms and conditions of the group health plan, it might catch you unawares. And if these changes come at an inopportune time when you or a family member is undergoing medical treatment, then this could leave a big dent in your pocket.
     

Besides the points discussed above, it is important to know how strong your insurer’s network hospitals’ list is – i.e. the hospitals with whom the insurer has tie-ups with. The very premise of going for a health cover is to minimize out-of-pocket expenses to the bare minimum. Therefore, on closer scrutiny of your employer provided policy, if you find that the policy does not meet your objective of conserving your capital, it is a good reason for you to start looking for an individual cover or family floater plan. Compare online to get the best deal.