Most salaried employees these days are fortunate to have access to employer-provided health cover. This employer-provided coverage is a group health policy. Under it, your employer can cover his employee base at a low premium. Other benefits of group plans like these include shorter waiting periods and limited restrictions pertaining to pre-existing diseases.
There are indeed many benefits of this coverage, as the employee is availing it, often without paying for it. Not just employees, family members are also part of the employer-provided health coverage. However, there are limitations to this coverage.
You may think that this insurance is all you need for your healthcare needs, but you are mistaken. Relying only on the employer-provided cover is not advisable. This cover does not take care of your personalized healthcare requirements, and it will be a limited plan.
Let’s take a look at some reasons why you need your own personal health plan.
Group plans cover current employees and their immediate family members. The cover functions till the point the employee remains a part of the organization. The moment he leaves, the coverage ends. Job volatility is a very real phenomenon, especially in the private sector. If your employment is terminated abruptly, you and your family members will be at risk without your personal health cover. If there was a need for hospitalisation while you’re outside a group plan, you would end up spending a large amount of money on your medical expenses. Hence it is advisable to have another health policy, independent of what your employers are providing you, to ensure continuity of medical insurance.
2. The longer you take to buy another insurance, the more it will cost
Often, employees are reliant on the employer-coverage for long periods of time, and they do not buy their personal cover. Often, this is detrimental to the employee as the independent cover will cost you more if they realize this at an advanced age. The insurance premium amount increases steadily as you age. There is also a possibility of a serious disease occurring at a later age, and this will ensure that you face complications while getting a new independent health plan. Invest in an independent health plan at an early stage in life in order to have a low premium fee.
3. Restricted cover
Limits on the medical coverage is a serious issue with employer-provided coverage. The employer-provided plan is essentially basic in nature. The truth is that if a plan has multiple features and great benefits, it will cost your employer quite a bit. That would not be viable to the employer as he may be looking to optimize his costs. The coverage may not be enough to carry you through a serious disease such as cancer, whose treatment costs could run in tens of lakhs of rupees. Which is why, it’s important to have a personal cover on standby.
4. Credits lapse
With most health insurance plans, waiting periods and exclusions are removed typically in a span of three to five years of uninterrupted coverage. Even the employer-provided coverage may have such exclusions and waiting periods. Credits towards these exclusions and waiting periods lapse once you exit your group plan. And when you go in for a new plan, the waiting periods start afresh. This is not in your interests, especially if you are at an advanced age, or if you have a pre-existing condition.
Even though an employer-provided health plan can be a great boon to you, it does not take care of all your health needs. You need an independent plan to have wholesome coverage, and also for peace of mind. Remember that when you quit your job you can convert your group plan into an independent health plan with your employer’s consent.
(The writer is CEO, BankBazaar.com)