Five tips to start offering employees health benefits

While salary forms a significant part of an employee's benefits, offering health insurance is equally important. When an organisation offers health insurance benefits to its employees, it sends a crucial message that the employees are valued.

It shows that the employer/organisation cares for the well-being of the workforce and is ready to ensure that their health is taken care of. Since the employees help the organisation in achieving its goals, a group mediclaim policy is a gesture to assure the employees that they hold a significant place in the organisation.

Organisations, whether big or small, considering offering health benefits may follow these five tips to help make the right decision:

Understanding the Health Needs of the Workforce

Employers must understand the health needs when offering health insurance to employees. Factors such as current health conditions, average age group of workers, health goals of individuals, etc., must be considered.

Conduct a small survey to understand what the employees are looking for in terms of health benefits. This will assist the employer in picking the right health insurance so the employees can derive maximum benefits and achieve their health goals.

** Carry Out an Analysis of the Risks and Costs**

Any benefit that the company wants to offer its employees comes with a cost. Therefore, when offering healthcare benefits for employees, organisations must consider the costs and risks that are associated with various health plans.

Some factors that must be considered include:

The overall cost- Organisations must consider the overall cost of the health insurance plan. Benefits such as group policies are cost-effective for the employer as the premium is lesser than individual insurance.

Administration- Health insurance benefits require administrative commitment. You have to dedicate resources to choosing a plan, determining the coverage amount, premium remittance, and so on. A health benefit plan will be successful only if the organisation allocates sufficient time and resources towards its administration.

Researching the Available Options

Organisations must closely research the various health benefit options available to them. One of the most beneficial health benefit options available is a group mediclaim policy. It allows the employer to cover all the employees under one insurance policy and grant them financial assistance in case of health emergencies.

Some of the notable features of group insurance are:

Comprehensive Coverage: Group insurance offers comprehensive coverage and does not require any pre-medical checkups. Group insurance also covers the family members of the employees and offers assistance for maternity, doctor consultations, etc.

Customisable: Group health policies can be customised according to an organisation's needs. For instance, an employer can choose the coverage amount based on the organisation's size and the health needs of its employees.

Cost-Effective: Group insurance costs less than individual insurance plans, so it fits most companies' budgets. The insurance plan spreads the company's risk over a large number of employees. It is especially beneficial for offering health insurance to employees of small businesses.

Consider the Regulations

Organisations must consider the regulations concerning group insurance policies. This will help them understand the implications of buying the policy for their employees, the benefits they can avail of, and so on.

Mandatory Requirement- Post-pandemic, group insurance is a mandatory requirement. As per the regulations, organisations must arrange for a group health policy for their employees and ensure that they get adequate health coverage.

Tax Benefits— Understanding the tax benefits is another crucial aspect when it comes to offering health benefits to employees. Employers who pay the premium for health policies can claim it as a business expenditure. This helps them reduce taxes and enjoy the benefits.

Choose Plans that Offer Relevant Health Benefits

Traditional health insurance plans are not popular anymore. Due to the changing times and lifestyles, employers must move towards plans that offer relevant health benefits to the employees. For instance, employees prefer insurance plans that meet their modern requirements.

A plan that offers comprehensive coverage and provides mental health benefits along with physical ailments can be an excellent choice. Employers must consider health plans that also cover the expenses related to dental and vision issues, nutritional needs, and so on.

How to Manage Employee Benefits?

Benefits are an important factor in employee engagement, retention and recruitment. They demonstrate that the organisation cares for the employees and creates a positive cascade. Here are some tips for managing employee benefits successfully:

• Identify the benefits that are important for your employees.

• Make sure that the employees have clarity on entitlement to benefits.

• Keep a check on the results and ensure that the benefits are working for the employees.

• Allow flexibility and change in the benefits.

• Streamline the benefit administration process.

The post-pandemic situation has made everyone realise the importance of health. Business organisations also realise that employees are a crucial asset and require care. Some benefits of offering health insurance to employees are mentioned below:

-Beneficial for the Employee- Employee insurance policy primarily benefits the employee as he gets financial assistance in times of medical emergencies. Many employees may not be able to buy individual health insurance for themselves. Therefore, health insurance from the employer shields them and their families.

-Excellent Medical Treatment- Organisations offering medical insurance have tie-ups with some of the top hospitals. Therefore, employees can receive superlative medical treatment when needed, which may not be affordable to them otherwise.

-Employee Commitment— Offering health care benefits to employees enhances their commitment to the organisation. When their well-being is looked after, the employees feel valued and are committed to working towards the organisation's goals.

-Improves Health— Health insurance helps employees improve their health as they receive good-quality medical attention. If they have a health issue, they can take advantage of the insurance coverage and receive appropriate medical treatment. Besides, they can also have regular doctor consultations, which leads to overall health improvement.

-Reduces Absenteeism— When employees receive good medical care, their health concerns are taken care of. They are in good health and can report to work regularly. This benefits the employer, as absenteeism is reduced and the workforce is available at all times, helping the organisation succeed.

-Regulatory Compliance- Most notably, offering health insurance benefits to the employees allows an organisation/employer to meet regulatory compliance and fulfil their responsibility towards the employee. Since offering health insurance is mandatory as per Indian law, organisations that provide health insurance to employees meet regulatory compliance.

-Tax Benefits to the Employer- The amount that an organisation spends towards the payment of premiums is an expense. It can be deducted from the profit that it earns at the end of the year, reducing the tax amount. Therefore, it provides tax benefits to the company.

-Hiring & Retention Strategy- Employee-oriented companies offer various benefits to their employees apart from salary, one of which is health insurance. It can be a significant factor affecting the employee's decision to stick with the company for longer.

Besides, a company that offers health insurance, is likely to attract more talent as compared to a company that does not offer insurance benefits.

-No Waiting Period- In a group mediclaim policy, there is no waiting period for pre-existing diseases as opposed to individual health insurance. Therefore, employees covered under such a plan can claim benefits for all pre-existing medical conditions from day 1.

For instance, an employee can get maternity coverage under group insurance beginning from the very first day. There is no need to wait for the waiting period to get over in order to claim the benefit.

When an organisation looks for group health insurance, it must ensure that it selects a plan that offers maximum benefits at a cost within the company’s budget. Here are some factors that must be considered while choosing a group insurance for your employees:

Flexibility- Flexibility is one of the most crucial features to look for when choosing group insurance. Since an organisation is a growing entity, it is essential to select a plan that allows modifications, additions, and removal conveniently.

For instance, a good plan allows the employer to modify the coverage if there is a requirement based on the employee's needs.

Easy Claim Settlement— When choosing insurance for an employee group, organisations must consider the insurance provider's claim settlement process. It is wiser to choose a provider who offers an easy claim settlement process and allows cashless claims.

High Sum Assured— Organisations must consider the inflation factor affecting medical costs and opt for a plan that offers a high sum assured. If the sum assured is not sufficient, employees may have to spend money from their pockets for medical treatments that have a higher cost.

Premium and Coverage— Another essential factor that employers must consider is the premium and coverage that a plan offers. If a plan has a lower premium but offers less coverage, it will not adequately fulfil the medical requirements of the employees.

Therefore, a comparative analysis must be done to determine a plan that strikes a good balance between the premium and coverage.

Tailor-Made Policies- Unlike individual health insurance plans, group insurance can be customised to suit the needs of the employees. Beneficial group insurance offers a high sum assured, greater coverage, flexibility, no waiting period, and other benefits.

Therefore, organisations must opt for insurance providers that can provide customised plans to cover the employees' needs.

Room Rent Limit— A room rent limit is the cost of the hospital room that the insurer covers when an employee is admitted to a hospital. When choosing a group health plan, organisations must ensure that the room rent limit is not too low, as it can cause the employee to bear the difference in the room rent as well as the associated medical costs.

Group insurance is a critical part of business insurance. It assures employees that they are valued and that their well-being is of the utmost importance to the employer. When looking for a group mediclaim policy, employers must consider the above-mentioned tips so they can provide maximum benefits to their workforce.

Tata AIG offers affordable and customisable group medical insurance. Our policies protect the employees in case of accidents, illnesses and other types of medical situations.

With Tata AIG group medical insurance, the policy benefits include pre- and post-hospitalisation expenses, daycare procedures, maternity cover, baby cover from day 1, ambulance cover, a 96.70% claim settlement ratio and much more.

Does an employee require to pay a premium in group health insurance?

No, in group health policies, the employer pays the premium. Therefore, the plan is offered as a benefit to the employee, and he does not have to pay the premium.

What is the benefit utilisation rate?

The benefit utilisation rate is the parametre that allows the employer to study the effectiveness of its benefits program. It is a percentage of employees who are using a particular benefit provided by the employer.

Is group health insurance beneficial for a small organisation?

Yes, group insurance plans are beneficial for small organisations as they provide plenty of benefits to the employees. They foster a positive relationship between the employer and employee and bring many benefits to the organisation as well as the employees.