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Should You Include Your Parents In Employer's Health Insurance? Research Team | Posted On Tuesday, August 28,2018, 06:41 PM

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Should You Include Your Parents In Employer's Health Insurance?




Yes, you should include your parents in the Employers Health Insurance. An employer's health insurance is a group health insurance plan provided by your employer. Why should you include your parents in company group insurance?

Covering your parents ensures that you or parents don’t face problems on a sickness. While you can get parents, standalone health insurance policies, the best way to get them covered is by including them in your company’s group health insurance.

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Should You Include Your Parents In Employer's Health Insurance?

The Human Resource (HR) department of your organization might ask if you want to include your parents in the group health insurance. If you want to include them, you’ll have to pay extra premium.


What would you do given such an option?

1. Go for it by paying an extra premium

2. Turn it down just to save a little money

Read this to know why you must get parent’s covered in your employer’s group health insurance plan:


What is an employer’s group health insurance policy?

Employers like companies and firms, offer group health insurance plans to employees, their spouses and children. This creates a sense of loyalty towards the organization. Group health insurance premiums are paid by the company. When it comes to including your parents, some firms extend this benefit for free, while others ask the employees to pay additional premiums.


Advantages of including parents in employer’s group health insurance plans:

An employer group health insurance policy has certain terms and conditions applicable to the entire group insured. There are some benefits that you can take advantage:

1. Low-cost:

The premiums of a group health insurance plan are low compared to premiums of a standalone individual health insurance plan, (30-35% cheaper to precise). Calculate the premiums payable on individual health insurance plans for parents and on employer’s group health insurance plans, to know the quantum of savings you can make. It will be a lot more than you expect.

2. No medical examination:

The main advantage of a group health insurance plan is that you do not have to undergo medical check-ups. You, along with spouse and children get automatic coverage from day one.

3. No waiting period:

Group health insurance plans have no waiting period for any illnesses. All illnesses are covered from day one. Individual health insurance plans have specific waiting periods for pre-existing conditions or diseases. For example, individual health insurance plans have a waiting period of 1-2 years for hernia. New born babies are covered only after a waiting period of 90 days from birth.


Enhancing a health insurance plan:

A group health insurance plan may offer a low sum assured. In other cases where you’re availing a family floater plan or an individual health insurance policy, you might underestimate medical needs and opt for a low sum assured. Health insurance coverage might be inadequate. In such cases, it is advisable to enhance existing health cover. You have two options:

1. Top-up Plan

2. Super top-up plan

These plans help in extending the coverage of an individual or a family floater or group health insurance plan, after exhausting the sum insured of an existing health insurance policy.

Mr X has a Health Insurance policy with sum assured of Rs 5 Lakhs. He will only be covered for hospitalization up to Rs 5 Lakhs. What if X exhausts the limit (sum assured)? He has three options:

1. Avail another health insurance policy

2. Upgrade the existing health insurance plan

3. Avail a top-up or super-top-up plan:


The first two options are quite costly. Availing a top-up plan or super-top-up plan enhances existing health plan coverage at a lower cost.


SEE ALSO: What Is Insurance Premium? Types, Qualities, and Significance


1. Top-up plans:

Top-up health plans cover hospitalization costs, only after the deductible has been breached or the sum assured of Rs 5 Lakhs (in this example) has been exhausted. The sum assured of an existing plan serves as the deductible for a top-up plan.

In case of a top-up plan, you must exhaust the sum assured in a single go. This is a single hospitalization for a single illness. But, what if you are hospitalized as you fail to recover from this illness, (within 45 days of discharge) called a relapse. A relapse is considered to be a single illness. Relapses are not covered by top-up plans. What now? There’s a solution: super-top-up plans.


2. Super top-up plan:

A super top-up plan covers hospitalization, over and above the sum assured, in multiple hospitalizations, relating to the same illness.

Let’s say Mr X suffers a second heart attack just 6 months after treatment for the first heart attack and the bills come up to Rs 7 Lakhs. The relapse happens after 45 days. This means he cannot avail the top-up health insurance plan. Had he opted for a Super Top-up plan instead, with a cover of Rs 8 Lakhs and a threshold of Rs 5 Lakhs, this plan would cover the additional sum of Rs 2 Lakhs.

Use the employer’s group health insurance plan to cover hospitalization expenses till the deductible limits are met. Once you achieve the deductible limit, the top-up or super-top plans will cover you.


Limitations of employer’s group health insurance plan:

Though group health insurance gives many benefits to policyholders, the greatest drawback is its temporary. Following are the drawbacks of employers' group health insurance:


1. Discontinuation of group health insurance policy by the employer:


An employer is free to make changes in the group health insurance policy anytime. He may choose to:

1. Discontinue the group health insurance plan

2. Reduce the coverage

3. Stop extending the benefits to your parents


2. Discontinuation on job change:

An employer’s group health insurance plan terminates automatically on changing the job. Group health insurance is valid only until you are part of the group (the company or firm you are employed). Once you leave your job, you are no longer associated with the company. Hence, the policy ceases to cover you. Also, the associated benefits come to an end. There’s no cover till the next job. If the new employer extends group health insurance, you can opt for it. Remember, employers are not obliged to offer a group health insurance plan to employees. If the new employer doesn’t offer group insurance, you’ll not have cover.

It’s good to avail an independent health insurance plan for parents and use the group health insurance as a backup. You can make a claim on the group health insurance plan until the completion of the waiting period applicable for specific, surgeries and pre-existing diseases and then use the individual health insurance plan.

An employer’s group health insurance plan covers you and family under a single health insurance policy. Paying an extra premium to get your parents insured under the employer’s group insurance offers many benefits.

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