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Think Twice Before Being Content with Your Employer's Health Insurance Policy

By Vikas Chandra Das
22 November 2022, 1:23 PM

While the group health insurance provided by your work is a terrific method to keep yourself covered, it might not be enough. The family group cover of INR. 2-3 lakh may not be very helpful, given the sharp increase in medical inflation. In addition, experts claim that for any severe sickness to be covered, there must be at least INR. 5 lakh insurance money, which is typically not provided by employers.

Having workplace health insurance is a fantastic perk. Why? Simply because it protects you and your family at your employer's expense. And the employer makes sure that the additional perk of having health insurance through the business will improve employee retention. However, one should nevertheless weigh the benefits and drawbacks of these group plans even though an employer cannot reject them because of this. In addition, these policies frequently have significant gaps in coverage and are constrained in the coverage they offer. So how can you make sure you have enough protection?

Some Employer Health Insurance Features That May Not be Likeable

Here are some details about your employer's insurance plan that you might have missed and why you require additional protection.

Co-pay Clauses

Some It implies that the insured party will be responsible for a certain portion before the insurer starts covering you. Since the financial burden is only slightly lessened rather than entirely alleviated, this essentially reduces the overall value of even having insurance coverage.

Room-rent Limiting Clauses

This condition states that your daily hospital room rent will only be covered up to a predetermined sum, typically no more than half the entire rent. Major costs like those for a nurse and a doctor are not covered.

Employment Status

Only when you are an employee of the company will you be covered by your employer's insurance. Your insurance coverage ends the moment your employment is terminated for whatever reason.

Number of Persons Covered

Your dependents may or may not be covered by the health insurance plan you receive from your job. Insurance plans for the employer and the company may solely cover the employee.

Employer Insurance is an Advantage, Not a Right

It is a perk and a strategy used to keep workers and improve the working relationship between employers and employees. The employer may cancel the insurance coverage without fear of any legal repercussions.

Post-retirement Coverage

You won't have the advantage of insurance coverage after retirement, which is when you'll need it the most. If you purchase a new insurance plan after turning 50, you must also sign a document stating that "pre-existing medical issues" would not be covered.

Changes to the Employer Policy's Terms and Conditions

Employers and insurers collaborate to reduce costs and liability. They have the right to modify the terms of your insurance at any time, removing some coverage options or adding exclusions for pre-existing conditions and/or specific illnesses.

Total Effective Coverage

Employers don't provide much financial protection for their employees through group plans. If all terms and circumstances are followed, the total coverage will be up to INR 1,50,000 or INR 2,00,000. This will hardly be 20% to 30% of the costs for serious illnesses and prolonged hospital stays.

Furthermore, many insurance policies offer little to no flexibility for long-term planning. Group plans were introduced in an era when healthcare was less expensive and not viewed as vital. Therefore, these plans prioritise reducing the insurance cost, even if it means lowering the standard of service. Will the plan cover hospital admission costs on a daily basis, even for a brief stay of merely 7–10 days? Can you choose to get surgery without having even the slightest concern about the expense of the procedure? Do you feel confident that everyone in your family who is ill will receive the proper care and attention under the plan? Group insurance is appropriate for standard, everyday medical costs. However, you need a plan that delivers guaranteed lump sum benefits with very permissive terms and conditions if you want to plan appropriately for the future.

So What is the Solution? 

Simple: Purchase a personal health insurance plan and your corporate health insurance plan with the appropriate Sum Insured to meet all your needs. This way, even if your corporate health insurance plan cannot fully cover your medical expenses, you will always have access to your individual health insurance policy to file an insurance claim. Stick with your corporate health insurance plan and add a top-up plan to it if maintaining two health insurance policies is becoming a hassle. In this way, even needs for insurance claims that go above and beyond your company plan are met. Therefore, even if you leave your employment, you will still be required to pay a deductible out of your pocket for the coverage your employer previously covered.


1. Why should I pay attention to the terms and conditions mentioned in my employer's health insurance policy?

The insurance provider may, at any moment, add or remove sections that exclude coverage for pre-existing conditions, specific types of illnesses, or certain types of coverage from the terms and conditions of your policy. They can also decide to drop your dependents from the insurance plan. Therefore, keeping an open mind will undoubtedly be advantageous.

2. What hospitalisation expenses are covered under group health insurance?

Only a predetermined amount, often little more than half the total fee, will be covered for each day's hospital room rent.

3. I changed jobs 2 years ago and am nearing retirement age. Will a group insurance policy be helpful?

You won't have the advantage of insurance coverage after retirement, which is when you'll need it the most. It is complicated and requires medical testing to obtain a policy after age 50.

4. What is the maximum coverage offered by an employer's health insurance?

It will depend on the employer. Usually, these plans can cover up to INR 2-5 lakh.

5. Can my employer revoke my health insurance policy at will?

Yes, they can do so without worrying about any legal repercussions. However, remember that it is an employment perk, not to be mistaken for an employee's right.

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