These days there is rarely any organization which does not provide health insurance benefit to its employees. This is more or less part of the CTC structure specified to the employees at the time of joining the organization. For most of us, it is just a simple deduction from our salary which provides benefit at the time of hospitalization. However, there is much more to it. Let’s see the merits and demerits of employer provided health insurance vis-à-vis individual health insurance.
What is employer provided health insurance?
An employer provided health insurance is usually a master policy which covers all the employees in the organization. It would be mandatory for all employees to opt for this. An amount will be deducted from the salary every month towards this policy. The benefits of this policy can be availed when the employee gets hospitalized. If not, nothing would be received by the employee.
Employer provided health insurance policies are usually cheaper than individual policies. The reason is that lot of employees are covered at once for the insurance company through the organization. The premium of the policy also depends on the size or number of employees in the company. If the organization has more employees, the master policy premium is divided among more people. Hence, premiums will be lesser for employees of those companies.
Make sure you get to know the benefits offered under the employer provided policy at the time of joining the organization. Sum assured will be specified to you. You will not be allowed to choose from a plethora of options. There will be a couple of options to choose from. What you need to know is the benefits and limits under the policy. The major benefit with these policies is that maternity costs and pre-existing diseases are covered from day one for most of these policies. However, in the case of individual policies from insurance companies, there will be a waiting period to cover such conditions.
As we know, the only thing constant is change. With changing economic conditions, the attitudes of companies have also changed. Cost cutting has also affected health insurance benefits. Companies are doing it in the form of reducing room rent limits, introducing a clause where employee has to pay a part of the hospitalization cost (co-pay), decreased sum assured and so on.
Private vs Government
Government as well as private organizations provide such policies. However, government provided schemes such as CGHS are more comprehensive and standard. There is no such limit on sum assured for them. Entire hospitalization would be covered and paid for. Network hospitals and cashless facility could vary from employer to employer, whether it is govt or private.
What should you do?
I assume that most of us will not work for the same organization till retirement. While shifting the employer, there is no guarantee that you will be provided all these benefits again. They could reduce your benefits depending upon the company size, guidelines and financial situation. Even if you stay with the same organization, the benefits are not guaranteed for life long.
You could consider two options in these cases. You can either buy a stand-alone policy with coverage for the entire family or a simple top up for the existing policy. By doing one of these things, you feel secure even if you exit your employer at some stage.
Health insurance is an important factor for a smooth financial life. It is even more important to have health insurance when you are young and healthy as lesser premiums will give you more benefits.