Is your Workplace Medical Insurance Sufficient?

Deepak Yohannan myinsuranceclub.com

Rahul is a family man with a working spouse, two kids and dependent parents. Although he has not had to bear any major hospitalization costs yet, Rahul is confident that if the need arises, the corporate health insurance scheme provided by his employer will cover the expenses.

Nevertheless, Rahul is making a mistake in depending completely on his workplace insurance. His medical expenses may have been negligible thus far, but the years will take their toll on his family’s health. As Rahul and his wife enter their 40s and 50s, and as his parents grow older, more and more medical complications will crop up and require treatment. Chances are high that his workplace insurance will prove insufficient in the long run. Below are some reasons why:

1. Low Sum Insured – Rising medical inflation is resulting in increasingly higher hospitalization and treatment costs. The sum insured by your employer might prove insufficient, therefore, if multiple members of the family require hospitalization in the same year. Thus, one should ascertain the available coverage and check its sufficiency against potential medical costs. Moreover, there may be caps on things like the surgeon’s fee, which would limit the employee’s access to good medical care.

2. Out-of-pocket Expenses – Many workplace insurance policies have additional clauses like co-pay and deductibles that the employee would have to pay in case of a claim. Therefore, employees should ascertain the extent of these costs to ensure that they are not left foundering in times of medical emergency.

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Deepak Yohannan

CEO|MyInsuranceClub.com

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3. Switching Jobs – One problem with workplace insurance occurs while switching jobs. There is a chance that the new employer will not provide medical insurance. In this case, the employee will be left without coverage. On the other hand, even if the new employer provides insurance, it is likely that the employee will have to forego any pre-existing condition benefit earned on his previous workplace insurance.  

4. Going Independent – Depending wholly on one’s workplace insurance becomes an obstacle if one has plans to branch out and start something on one’s own. As soon as one leaves the workplace, one leaves the protective umbrella of the group insurance scheme, thereby necessitating the need for individual or family floater insurance.

5. Post-retirement Scenario – Retirees face a similar problem because most corporate insurance schemes discontinue their coverage once the employee crosses 60 years of age. Beyond this point, the person’s medical costs increase significantly. But unless he had the foresight to purchase an independent health insurance policy earlier, he will be left with no insurance at this stage. This is particularly concerning because the costs of new health policies are exorbitant for senior citizens, and there may be a waiting period or even outright exclusion for certain health conditions.

6. Family Members Not Covered – Corporate insurance plans may not always cover all the members in one’s family. In Rahul’s case, the coverage might extend to Rahul, his spouse and their kids, but not to his parents. This would leave a huge gap in his financial planning because the elderly usually incur greater expense on medical treatment.

7. Policy Changes at the Workplace – In these times of financial strife, be prepared for possible policy changes in the corporate insurance scheme. Employers looking at ways to reduce costs might very well slash the sum insured or place caps on the existing coverage.

So, if you still think that you are adequately covered under your company’s group health insurance policy, it is time to think twice especially since the medical inflation is soaring very high!

The author is the CEO of MyInsuranceClub.com, an online insurance price & features comparison portal.