Most companies offer group health insurance coverage of Rs 5 lakh, maternity benefits of Rs 50,000: study

Employees in India and their families, including elderly parents, typically get health insurance coverage of Rs 5 lakh under their employers' policies, a study has found

The most common insurance coverage employees and their families in India get access to is a group health insurance coverage of Rs 5 lakh and maternity benefits worth Rs 50,000, as part of their employer-funded corporate health policies, an annual study conducted by Prudent Insurance Brokers has found.

Less than 40 percent of the organisations offer family floater sums insured of under Rs 4 lakh. Companies in the top tenth percentile offer coverage beyond Rs 5 lakh too, with the maximum sum insured going up to Rs 10 lakh. “From 2023, we have seen close to 5-7 percent in the count of organisations moving to the uppermost percentile to manage severity better,” said Surinder Bhagat, Vice-president, Special Lines – Employee Benefits, Prudent Insurance Brokers. According to the company, the study covered over 10 lakh employees and 3,100 organisations across 14 sectors.

A large number of organisations – 57 percent – offer coverage to parents either under base policy or as part of voluntary benefits package. “Two other trends in family definition that are gaining traction are coverage for disabled siblings as also LGBT+ partners  to address inclusivity in the workplace,” he said.

Also read: Why individual health cover along with corporate health cover is more beneficial

Only outliers offer maternity cover of over Rs 80,000

More than 95 percent of the organisations offer maternity benefits to employees and spouses in India. According to the study, the median level for maternity coverage is capped at Rs 50,000 for both normal as well as C-section deliveries. “What is interesting is that there are a few specific industry categories like BFSI, e-commerce, edtech, retail and engineering, power and renewable energy where the C-section median is Rs 70,000. The top tenth percentile offers normal maternity care for Rs 80,000 and Rs 1 lakh for a  C-section,” Bhagat noted.

Older insured contribute to 60 percent claims

On an average, companies continue to include parents/ parents-in-law under the family definition, despite pressures of rising medical costs and higher claim frequency for this cohort. “As per our data, market median for family definition includes the employee, spouse, children and parents in the base plan,” Bhagat said. However, certain sectors such as e-commerce, manufacturing, infrastructure, facility management as also travel and tourism tend not to offer coverage to parents in the base plans.

Not surprisingly, the parental population accounts for close to 60 percent of overall claims, prompting employers to explore options to make the group schemes more sustainable. “The most common strategies deployed are capping the sum insured for parents within the overall sum insured, taking fixed contribution as a percentage of the overall premium, co-pay on parental claims, stricter room rent restrictions for parents etc,” Bhagat said.

For example, the fixed contribution could be 5-15 percent of the family floater sum insured or ad-hoc amounts ranging from Rs 2,500-10,000.

Also read: For senior citizens, a regular health cover works better than a dedicated policy

Room rent as a cost-containment measure

Most companies impose room rent sub-limits within the overall sums insured offered to employees and their families. This is applicable even to top management officials in the case of many companies. “Close to 95 percent of organisations have room rent restrictions in some form. Only 5 percent of organisations in the top percentile have no such limits,” Bhagat said.

Typically, this room rent capping is 2 percent of the overall sum insured. Alternatively, the type of rooms employees are eligible for is defined – for instance, a single private air-conditioned room or a flat cap of Rs 7,500-8,000 per day.

OPD benefit category grows in popularity

Post-Covid-19, there is a significant uptake of OPD programmes, with around 30-40 percent of employers offering such features as part of their policies. The market median for the OPD programmes is Rs 10,000 for a family comprising employee, spouse, and children, with only a handful of employers extending it to parents, the survey found. Common offerings in this segment include health check-ups, consultations, pharmacy, dental and vision services.

Independent health insurance covers a must

Many employees make the mistake of solely relying on their corporate group health insurance covers.It is, in fact, best to have an independent cover in place for yourself and a separate one for your parents.

This is because the employer-provided cover is not forever – once you resign or retire, the cover will cease to exist (unless you can convert it into an individual policy via porting request to the insurer, which is not always a simple affair. Your future employer may not offer adequate sum insured or may exclude parents from coverage.

Moreover, as you grow older, health insurance premiums will rise and worse, you might not even be issued a policy if you have developed multiple lifestyle conditions over the years. Therefore, it is crucial to buy an individual cover when you are younger.