How can employers provide comprehensive yet affordable healthcare for their employees? It’s a question that many employers find themselves grappling with, especially since the pandemic outbreak. Rightly so, choosing a good group health insurance plan can get tricky as it is an important decision for a company of any size and structure. But with the right advisor, it need not be as complicated.
A group plan provides general health insurance for a set of people rather than an individual. The employer pays all or most of the premium fees. This typically results in lower costs for both the employer and the employee, since the risk to the medical insurance provider is distributed amongst the group. Individual insurance plans allow for greater control over the type of coverage, whereas group plans may not offer much in the way of choice.
Eligibility criteria for enrolment
For employers, the business/company must be legally registered under the rules and regulations of the country. Depending on the policy, there is also a minimum number of employees criteria to gain eligibility to procure a group plan. Typically, these plans are divided into tiers based on the minimum employee requirement (i.e., less than 50 employees vs more than 50 employees). The employee must be working full time, with a valid visa sponsored by the company if he/she is a foreign citizen. The employee must also be on the payroll of the company and the Ministry of Labor list.
The cost of care
For group medical insurance, premiums are calculated by determining an average requirement of each of the participating members and multiplying this amount with the number of participants. The employer then pays the sum total to the medical insurance provider.
Multiple factors go into the calculation of these premiums:
- Size and health of the group: Since the group healthcare premium is the sum of all of the employees’ individual premiums, the cost will increase as more employees are added to the plan. Additionally, pre-existing health conditions of the members of the group may influence the cost of a single premium. This is also largely dependent on the number of employees participating — the greater the number of participants, the higher the chances of incidence of pre-existing conditions. Some insurance providers are willing to waive the underwriting for pre-existing medical conditions if the number of employees is relatively low.
- The average age of the group: Group health insurance plans typically factor in the average age of the employees, rather than setting individual premiums for each participant. As older individuals tend to be at higher risk for medical issues, a greater average age will increase the premiums of the group plan.
- An employer’s claim history: When underwriting, insurance providers compare the premium amount paid by the company with the sum claimed against the policy. It is used to help assess the level of risk the insurance provider will take when issuing the policy.
- Type of occupation: Different occupations tend to carry varying degrees of risk to the health of employees. For example, manual, labour-intensive jobs are more likely to result in injury than office jobs. As a way to take this increased risk into account, health insurance providers may compare your company to other similarly-sized companies within the same industry. This allows for a fairer evaluation of the premium rates for both the company and insurer.
- Type of coverage and add-on benefits: There are many types of group health insurance plans, all with different coverage scopes. If an employer wishes, they can expand the coverage of the health insurance policy by paying a greater premium. Some group health insurance providers allow employers to give employees the option of buying add-ons and increasing the coverage.
What to consider when selecting a plan
Here are some important factors to consider when deciding which group insurance plan is right for your company:
- Maximum annual cover: There is a limit to the amount an employer may claim against their group insurance policy. This limit is the maximum annual cover. Any claims made exceeding this annual limit will be paid for by the employer, so it is important to select a plan with a maximum annual cover as per your organizational requirements.
- Critical care: Some group insurance plans may cover life-threatening illnesses. Critical care insurance plans provide a lump-sum payment to the insured upon diagnosis of an illness listed in the policy. For these critical illnesses, expenses can be extremely high and burdensome for the employee, impacting their ability to work productively. A group plan that covers critical illnesses is a great way to empower such employees and improve their prognosis.
- Flexibility: Since different organizations have different budgets and requirements, it is important to choose a plan that provides flexibility based on the type of coverage you need. Look for plans that give you options such as adding dental and ophthalmology coverage, or adding employees’ family members to the plan.
- Pre-existing conditions: It is not uncommon for employees to have pre-existing conditions such as diabetes, sleep apnea, and severe obesity. Some insurance plans will not cover these pre-existing conditions, or cover them subject to a six-month waiting period. Other plans will allow the option to add coverage of pre-existing conditions for an additional cost, or outright waive the additional cost completely if the number of participants is low enough. This can have a significant effect on costs for the business and should be considered carefully.
- App-based care: Many health insurance providers also have apps designed to help you manage and monitor your group policy. They provide features such as phone or video consultations with doctors, chronic conditions assistance, and personalized advice for improving health. Such providers often provide free access to their apps for members of the group health insurance plan.
- Private accommodation: For serious illnesses that require the patient to remain in the hospital for a period of time, hospitals provide different levels of accommodation for these patients. Consider the type of in-patient accommodation covered under the insurer’s policy, as these can become a deciding factor in the quality of care and outlook.
- Healthcare access: One of the most important factors to consider when selecting a health insurance plan is the ease of access. The number of healthcare providers listed under the insurance plan will determine how easy it is for your employees to find the right care in their proximity. The reputation of healthcare providers is also crucial in determining the value of a health insurance plan. Access to reputable healthcare providers is a benefit that is highly valued by employees and is a great incentive for attracting and retaining top talent.
- Home country coverage: Some group plans allow for international coverage for specific, pre-determined reasons. Sometimes, however, some regions/countries do not include the policies of others. This is why there are also plans that provide emergency coverage for specific periods of time when visiting your home country for business or leisure. It is important to assess your need for home country coverage when choosing a health insurance plan, especially if many of your employees’ are expats and their country of origin is often not included in the international insurance coverage.
Choosing a health insurance plan for your company is an important decision. But the decision making can get tedious as there are multiple considerations and options. If you want to find and choose the right plan tailored to your needs, schedule an appointment with one of our advisors for a free assessment. For more details, contact: us at Clientservice@cfsgroup.com