Why Do I Need To Get Health Insurance For My Employees When Most Of Them Have A Personal Health Policy Already?

Saransh Garg

It might look like your employees are covered well with their personal health policies, but are they?

A founder recently asked me, "Why do I need health insurance for my employees when most of them already have a personal health policy?"

This question is actually more often asked than we assume. And here's to all the readers, you will be surprised to learn certain things about your personal health insurance policy document when you read it in detail.

Before I explain further, let’s look at the broad definitions of Company Sponsored Health Insurance and Individual Health Insurance.

What is Group Health Insurance or Company-Sponsored Health Insurance?

Group health insurance or company-sponsored health insurance is a collective health insurance policy offered to a group of individuals. This plan allows companies, organisations, banks, and even housing societies to procure health insurance for their entire staff or members.

If you’re worried about hidden clauses in your GHI policy, here’s what you need to know before you sign up.

What is Individual Health Insurance?

Individual health insurance is an insurance plan that offers medical coverage to a person on an individual sum insured basis. It refers to the type of health insurance plan that needs to be purchased separately for each family member.

Did you know individual health insurance:

Doesn’t cover all pre-existing diseases for up to 4 years. You cannot claim them in this time duration
Several common diseases have waiting periods of 1-4 years (like diabetes, hypertension, hernia, piles, gout) and can cause financial complications in case of a health emergency

Whereas, company-sponsored health insurance:

Pre-existing diseases are covered from day one instead of 2-4 year waiting periods 
Extremely affordable and accessible premiums

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You cannot get a personal health policy that waives these individual health insurance policy conditions off, or it is often heavy on the pocket and savings budget if you do

Company-sponsored health insurance covers all diseases from day 1, and the premium is reasonable, automatically becoming the more preferred option.

And guess what, this isn't the only reason employers get it, and it has added benefits for the employers too.

To an employer, company-sponsored health insurance means:

Attracting better talent

Perks like employer-paid health insurance make your business more competitive. The best talent wants to work for employers that will care for their well-being.

A more productive workforce

With employee productivity impacted heavily by personal health and well-being, offering healthcare coverage could make your workforce more productive.

Tax-deductible premiums

Employer health insurance premiums are tax deductible. This can reduce the amount of tax you pay by thousands of rupees.

Lower insurance costs

The more employees enrolled in a healthcare plan, the more the risk spreads. Health insurers offer lower insurance costs when more people are enrolled in a healthcare scheme.

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While it's all heads-up for employers, employees have equal if not more reasons to prefer company-sponsored health insurance.

To an employee, company-sponsored health insurance means:

Affordable healthcare

Employees gain access to affordable healthcare that they may otherwise have been unable to access.

Treatment for chronic disease

Many plans offer access to mental health treatments and chiropractic services, often unavailable through the cheapest individual plans.

Improved morale

Studies have shown that employees with access to healthcare have higher morale and improved productivity.

No research required

With group plans, the employer takes care of choosing the plan and the provider. This saves employees time and effort in selecting the right plan for them.

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