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10 Reasons Why Companies Should Offer Employee Health Insurance

Team AckoJan 18, 2024

Over a period, companies have realised that their employees are integral to their success and one of their most important assets. And like every other asset, companies should look forward to insuring this asset as well. With the rise of the internet, the boom in the smartphone industry, and the emergence of digital-first insurers, companies have a good option in this regard—Employee Health Insurance. Read ahead for details.

Contents

Top 10 Reasons for Offering Employee Health Insurance
Challenges in Providing Group Health Insurance
Key Takeaways
Frequently Asked Questions

Top 10 Reasons for Offering Employee Health Insurance

Companies should consider buying a Group Health Insurance Plan for the following reasons.

1) Employee Benefit

An Employee Health Insurance Policy is a huge benefit, especially for those who cannot afford individual health insurance. The employees do not have to pay the premium for this plan. It is paid by the employer on behalf of the employee. This way, the employees receive health insurance coverage free of cost.

2) Basic Coverage

People might not opt for health insurance for several reasons. Some might not have the means to do so, some might be busy with their daily struggle, or some might be unaware of its benefits. With Employee Health Insurance, the employees will get the benefits of basic health insurance coverage. This can be of great help in case of emergency hospitalisation.

3) Superlative Medical Care

Insurance companies that offer Employee Health Insurance have tie-ups with top-tier hospitals that offer superlative medical care. Such hospitals are known as Network Hospitals. Thus, if the employee is covered under the policy and needs to be hospitalised, they can get admitted to these hospitals. Without such a policy, availing medical care might prove expensive.

4) Hiring and Retention

Nowadays, it is the norm for people-oriented companies to offer Employee Health Insurance. While the availability of such a benefit might not be the sole reason for an employee to join or stay with the company for a long time, it can certainly be a contributing factor. Thus, offering an Employee Health Insurance policy can also be another tick in front of the Hiring and Retention box.

Also, Read: 5 Important Things to Know About Employee Health Insurance Policy

5) Tax Benefits

Companies can be eligible for tax benefits by paying the premium for Employee Health Insurance. The benefit will depend upon the total premium paid and the provisions of The Income Tax Act.

6) No Waiting Period

Most of the Individual Health Insurance Plans come with pre-fixed Waiting Periods. This is the duration for which the policyholders must wait before raising a claim and manage the expenses on their own without the insurer’s help. However, such Waiting Periods are relaxed for Employee Health Insurance. A prominent example of it is the Maternity Cover in such policies. Usually, individual plans for such a cover have a Waiting Period of more than a year but that’s not the case in Employee Health Insurance.

7) Preventive Health Care

New-age health insurers are focusing on preventive health care initiatives. They are not restricted to conducting health check-ups. Such initiatives also include a fitness tracking app, rewarding healthy habits, discounts on gym memberships, etc. Some of these are also a part of the Employee Health Insurance Plans. Such preventive measures can help the employee to stay active and in turn, stay productive.

8) Hassle-free Claims

The role of Third-party Administrators (TPAs) in Employee Health Insurance makes sure that managing claims is not a hassle for the company/employer. Thanks to internet-centred technological advancements, the claims process has become a lot smoother to what it was a decade ago.

9) Mobile-friendly

Digital-first health insurance companies have responsive websites and mobile-friendly apps to help make the entire insurance experience convenient. For example, tech-savvy insurers offer Telemedicine facilities under the Employee Health Insurance Plans. Such services are of great help, especially during the COVID-19 period.

10) Company Culture

An extensive Employee Health Insurance Plan offered by a tech-enabled company can be perceived as a major benefit for employees. With such a policy, the employees can feel that the company cares for their wellbeing and does not treat them as just a resource. It can be one of the driving factors in creating a people-first company culture that is beneficial for both the employer and the employee.

Also, Read: Family health insurance plans

Challenges in Providing Group Health Insurance

Here are some of the challenges associated with Employer-provided Health Insurance

1) Cost Aspect

Providing such a type of insurance benefit can prove to be an expensive affair for smaller companies. However, they should consider the long-term benefits of such a policy and opt for an affordable plan to get things started.

2) Lack of Customisation

All employees have the same blanket cover under this policy. Thus, there is no scope for individual customisation. However, depending upon the insurance provider, you can customise the overall cover. And if the employee wants enhanced coverage, it can be bought by paying extra premium. The respective employee will be required to pay for such enhancements.

3) Lack of Awareness

Overall, employers need to understand more about such new-age Group Insurance Schemes so that they can benefit from them keeping their goals in mind.

Key Takeaways

Here are some vital points covered in the article.

Employee Health Insurance is a good way to cover basic insurance needs of the employees.
The company pays the premium for such a policy.
The cover is standard for all employees.
The policy is active only till the employee is a part of the company.
Partner with a tech-savvy insurance provider for a zero-trouble insurance experience.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions.

Frequently Asked Questions

Here’s a list of common doubts surrounding an Employee-offered Insurance Plan.

1. I own a small business with fifty employees. Should I opt for such a plan?

Employee Health Insurance is a good way to ensure financial assistance for employees in case of hospitalisation. You can opt for such a plan for a small business as well.

2. Can a company receive tax benefits for offering such a policy?

A company can receive tax benefits for offering Employee Health Insurance as per The Income Tax Act.

3. I have come across some companies that do not offer health insurance. What is the reason for it?

Prominent reasons for companies not choosing a group cover can be the cost factor, lack of awareness, and lack of customisation of the plan. However, new-age insurance companies offer enhanced benefits to overcome the challenges. You can have a look at these benefits by visiting ACKO’s Group Medical Coverage (GMC) Page.