Factors Affecting the Cost of a Group Health Insurance Policy


01 Nov 2022

Read about Factors Affecting the Cost of a Group Health Insurance Policy. Visit Kotak General Insurance for more information about health insurance policy.

Besides individual or family health insurance policies, insurers also offer group health insurance policies, which are generally for employers to cover their employees. Many individuals can be covered separately under this kind of insurance. Employers today are stepping up and offering the benefit of financial and medical back-up to their employees, which is easily possible with this group health insurance plan.

What are the benefits of a group health insurance plan?

No waiting period

Certain medical conditions, like diabetes, hypertension, thyroid, etc., have a waiting period before you can file a claim for their treatment. This is the case in a regular health insurance plan. With a group health insurance plan, you do not have to go through a waiting period to treat these ailments. With this kind of health insurance plan, your pre-existing diseases can be treated under the policy with a waiting period of zero days. However, you should check with your employer or the insurance company regarding what medical conditions are covered under the same policy.

Quick claims

With a group health insurance policy, your claims are cleared faster compared to a basic health insurance plan, as being an employee gives you an edge. As a result, the insurance company or third-party administrator processes your claims quickly.

Maternity coverage

Maternity coverage is not a part of the base health insurance plan. You can get it as an add-on coverage. But with the group health insurance plan, you have maternity coverage as a part of your base insurance plan. Furthermore, it also covers your newborn from the day of birth until 90 days of age.

Family coverage

The group health insurance policy does not just cover you as the employee, but also your family members are protected under the same policy. Under the health insurance plan offered to you by your employer, you can add up to 5 dependents from your family without paying the extra premium cost.

What are the factors that affect the cost of a group health insurance policy?

As an employer, you can look into these factors to understand what determines the group health insurance premium.

Average Age

Since early age is generally looked at as a low-risk factor and older age is considered a high-risk factor by the insurance companies, the average age of the employees plays an important role in affecting the cost of a group health insurance policy.

Size of the group

The number of people covered under the group health insurance plan is directly related to the premium cost. It is as simple as that. Hence, before you, as an employer, buy a group health insurance policy, you should have a vision of the increasing number of your employees and your budget.

Claim history

The insurance company will check your claim history as a company. They also check your financial background to understand how credible you are when it comes to making timely payments. If you check all the boxes, you might be able to negotiate a good deal for yourself. But if you have a bad financial or claim history, you might be eligible for higher costs or no health insurance at all.

Add-on benefits

A group health insurance policy often covers aspects that an individual insurance plan does not. But still, there are many other add-on benefits that the employer or employees can opt for to make their health insurance plan more well-rounded. The number of add-on coverages added to the policy also increases the premium cost.

Type of occupation

The occupation of your company and your employees determines the premium cost of your group health insurance. If the occupation of your employees involves high-risk factors, then you might have to pay more premium costs. This can involve groups like trade unions, farmers, construction workers, etc.

These factors will help you get the best group health insurance plan for your company’s employees. You should compare the prices as well as the benefits offered by multiple insurance companies to settle on the best deal. Group health insurance is aimed at benefiting your employees, but at the same time, it gives you tax benefits. To give your employees a sense of security, it is best to cover them under a group health insurance policy.

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Team Kotak GIC

The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.