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Startup Health Insurance: Group Health Insurance for Startups

Team AckoNov 8, 2024

As a new startup, you may have questions about whether you should offer Group Health Insurance to your employees. Health insurance is no longer just for big corporates, it is crucial for startups and small businesses to attract and retain top talent to keep the company’s momentum going. There are great perks to opt for employee health insurance for your startup. Read ahead to understand and learn about Group Health Insurance for startups and how new-age digital insurers such as ACKO are redefining health insurance for small businesses and startups.

Contents

Startup Health Insurance: Group Health Insurance for Startup Business
Why Should Startups Offer Group Health Insurance?
Importance of Group Health Plan for Startups
Cost of Health Insurance for Startup
What Kind of Health Insurance to Choose for a Startup?
Cost Sharing in Health Insurance for Startups
What are the Financial Implications of Health Insurance for Startup Companies?
Frequently Asked Questions
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Startup Health Insurance: Group Health Insurance for Startup Business

Group Health Insurance for startups is a group insurance scheme for your employees. Like all medical insurance policies in the country, the purpose of GMC is to cover the cost of your employee's healthcare in case of planned or unplanned hospitalization. The group insurance policy typically covers inpatient treatment and diagnosis of illnesses along with charges for hospital accommodation and nursing.

New-age digital health insurance companies such as ACKO have revolutionized health insurance to offer a hassle-free and paperless experience. We offer group mediclaim policy with additional benefits such as OPD cover, paperless claims, flexible premium payment cycles, faster and paperless claims, and guidance from insurance experts. Since our transactions are 100% digital, you can avail health insurance services online for primary care such as teleconsultations, OPD, lab tests, pharmacy, fitness and health tracker along with digital health card for the employee and his/her family.

Why Should Startups Offer Group Health Insurance?

Since a vibrant office culture is at the core of any startup business’ vision, it is essential you do all you can to try to maintain a ‘happy-at-work’ atmosphere. By offering group health insurance policy benefits for your employees, you can provide health insurance at a reduced cost and help improve their morale and productivity. Here are some of the reasons why a startup health insurance is important for a small company and its employees.

Access

Employees and their family members will have access to different levels of medical care as per your needs and the budget.

Speed

Quicker access to healthcare for employees gets you back in business faster.

Wellbeing

Providing health insurance for your employees helps you attract new talent as well as retain good employees.

Importance of Group Health Plan for Startups

Be it large corporates, small and medium industries or startups, the well-being of the employees is essential to keep the morale of the employees high so that there is business continuity. Mentioned below are the reasons why startups should start offering Group Health Insurance for their employees.

Acts as a Security for Employees

As a startup with fewer employees, you can build a trust factor through the GMC, which is at par with the corporate health insurance plans for large organisations. Health Insurance for employees helps startups retain talent or recruit new talent, which is really crucial for any startup. This will in turn reduce hiring costs for the company.

Cost-Beneficial Plan

There is a high possibility that most of the workforce is young. A cost-effective health insurance plan can be offered to the youth population in the company. There is also the option to include their parents under the same plan for an additional premium if not offered as part of the package.

Also, read: Top 7 Pros and Cons of Group Health Insurance

Comprehensive Plan

Irrespective of the industry the startup belongs to, GMC can be bought by most startups. Whether you have an employee strength of 10 or 50 employees, GMC is an ideal choice instead of the Individual Health Insurance Plan.

Acts as a Long-Term Investment

GMC offers a sense of financial stability and assures employees that they and their families are financially covered in case of medical care. This cultivates productivity in the company. It also motivates employees since it offers financial protection in case of medical emergencies.

Tax Benefits

As a startup that provides group health insurance for your employees, you can avail tax benefits, thereby reducing your financial implications.

Excellent Reputation in the Industry

To establish your startup as one of the best in the industry, word of mouth is an important part of communication. A well-designed group health insurance plan for your employees not only helps you to be valued inside the company but also outside the company.

Cost of Health Insurance for Startup

The cost of health insurance for a startup depends on the type of plan you select. Additionally, it depends on your business location, age of employees, along with the coverage and benefits that you have opted for. Usually, a plan which has low monthly premiums and high annual deductibles is ideal for startups since employees are young and comparatively healthier. Furthermore, being a startup, you need to offer new-age health insurance plans which offer a digital mode of transactions and communications.

Also, read: How Group Health Insurance (GMC) Plans Help Small Businesses?

What Kind of Health Insurance to Choose for a Startup?

After understanding your startup’s cost preference for group health insurance cover, you should consider the right health insurance plan. Providing group health insurance to your employees should offer wide coverage at a nominal cost. Consider the following factors while choosing the right of health insurance for startups.

Provides Upfront Cost Savings

Choose a group health insurance plan which optimizes coverages to save costs. An ideal plan should eliminate low-utilised benefits, which results in lowering the premium for the employee health scheme. Additionally, it should offer flexible premium payment cycles such as monthly/quarterly/half-yearly/yearly, making it easy to pay the premium.

Offers Access to Primary Care

Better primary healthcare results in eliminating unwanted expenses in the future. A plan should focus on health outcomes to reduce costs. This is possible through easy access to high-quality primary care and wellness programmes such as teleconsultations, OPD, lab tests, pharmacy, fitness and rewards, emotional assistance, chronic care management, etc.

Optional Add-ons

Having access to group health insurance add-ons that enhance the coverage enables employees to expand the scope of the policy. Add-ons such as top-up, consumables cover, financial protection, etc. are useful add-ons to the basic group health insurance policy.

Offers App-based Paperless Claims

Digital health insurance companies such as ACKO offer paperless claims. The process does not require employees to submit a hard copy or courier the documents to file a claim. Claims are processed on soft copies through a mobile app, making the entire claim process stress-free.

Provides Seamless Onboarding and Endorsements

To reduce overhead costs and to eliminate monthly Excel files to onboard an employee or to endorse the policy, opt for plans which offer a smooth, hassle-free and paperless Human Resources Management System (HRMS) integration.

Matches the Coverage in the Market

After analysing the market to learn about the average coverage being offered, you can decide the sum insured. The cost of quality healthcare is on the rise, and it can cause a dent on the middle-class family’s monthly budget. Ensure that you provide sufficient coverage for your employees. You can increase the coverage as your organization increases in employee size.

Reduces Employee Expenses

Charges towards room rent, co-pay and treatment-specific limits can put a strain on the employee's out-of-pocket expenses. Hence, plans which offer these features within certain limits will reduce employee expenses during medical emergencies and get maximum value from their policy during a claim.

Includes Parents as Beneficiaries

Most small businesses provide group coverage for employees, their spouse and children. Being a new-age startup, you can consider covering their parents as well. Parents are probably considered the likely beneficiaries of the group or corporate health insurance, and it will help reduce the financial burden of the employee. As a company, you can win their trust and attract top talent in the industry.

Offers Coverage From Day One

Several small businesses provide group health insurance to employees only after a certain period. As a startup, you can change that, and provide the coverage from day one. This will encourage new employees to feel secure and a sense of belonging, thereby, forming a great long-term employee-organisation relationship.

As an employer, you are the sponsor of the group health insurance plan for the employees. Hence, you are also responsible for deciding how much you want to pay for group health insurance or if you want to share the cost with the employees. You have the option to pay a certain percentage of the premium and the rest can be borne by the employee.

Furthermore, as a startup and employer, you have the option to include employee dependents. Whether you choose to bear the cost partially or in full, employees should also have the option to add dependents to the policy.

What are the Financial Implications of Health Insurance for Startup Companies?

The cost of group health insurance for your startup is based on the plan that you choose. Additionally, the business location, coverage and benefits of the plan, and age of employees are the main factors that determine the cost of the insurance and the financial implications of health insurance for your startup.

You and your HR team should work together to find a plan, which is a combination of wider coverage and lower premium based on your budget and healthcare needs.

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

Mentioned below are the answers to frequently asked questions about Group Health Insurance Policy for startups.

What type of health insurance plan is needed for a startup?

In keeping with the focus on a vibrant and dynamic culture, startups need a group health insurance plan, which is hassle-free and offers simple procedures to raise a claim. Opt for new-age digital health insurers such as ACKO, which offers digital or online group health insurance plans. Some of the main benefits are easy access to primary healthcare such as teleconsultations, pharmacy, lab tests, OPD along with paperless claims through the ease of a mobile app. Features such as this help reduce problematic areas and help provide more power to employees in following a healthy lifestyle.

Is it mandatory for organisations with less than 10 employees to provide group health insurance?

It is not mandatory to provide health insurance policy if your company has less than 10 employees. However, it is considered as a confidence measure for employees as well as retain talented employees in the company. It is the company’s decision to offer health insurance for employees.

What does primary care mean in group health insurance?

Primary care is services provided by healthcare providers on a day-to-day basis. Primary care services such as OPD, wellness programmes, access to diagnostics help reduce the cost of health care in the future. A group health insurance for startups should provide access to primary care that will help improve the overall health of employees.

How to choose the right health insurance plan for a startup?

As a startup, one of the biggest challenges is to maintain a lean budget as the company is trying to grow in the market. It is important to set a budget to pay the premiums. Contact our support team if you need clarity on the terms and conditions.

How many employees can be covered under the employee health scheme?

There are no restrictions on the number of employees the organisation can offer the health insurance benefit. Usually, organisations with more than 10 employees can choose to offer a group health insurance policy.

What are some of the disadvantages of the employee health insurance scheme?

The employee health insurance scheme has a lot of advantages to both the employee and the employer; however, it does not provide access to exclusive health care. These can include additional coverage for critical illnesses or treatment/surgery for cancer or such specific illnesses. Employees should consider buying personal health insurance in such instances.

What are the primary factors which influence the premium of the group health insurance plan?

The primary factors which affect the premium of the group health scheme are the average age, the size of the group, and the financial health of the organisation.

What is the full form of the abbreviation ‘GMC’?

The full form of GMC is ‘Group Medical Cover’. The term is used in health insurance, which covers a group of persons or employees.

Does the employee health insurance cover COVID-19?

Yes. Medical treatment of COVID-19 is covered by the employee health insurance plan. Ensure that you check with your insurer the terms and conditions of the coverage.

What does a new-age digital health insurance company provide with the group health insurance for a startup?

New-age digital insurance companies such as ACKO provide more than standard group health insurance plan. It offers additional benefits such as OPD cover, paperless claims and onboarding, digital claim settlement, flexible payment cycles, guidance for insurance professionals, mobile app-based transactions, teleconsultations, pharmacy, among others.

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