Should you include your parents in employer’s group health insurance?

Mahavir Chopra

The obvious answer is YES, and there’s no doubt about that. Even if your brain says otherwise, read on to justify this honest decision made by your heart!

The depth of love your parents have for you can never be measured. They have always been your backbone and you have always been proud of them. Now, it is time for you to become their backbone and make them feel proud of you.

You can start by getting them covered under a health insurance plan. This simple decision will ensure that you or your parents do not face any hardship when your parents fall ill. The best way to achieve it is by including them in the group health insurance provided by your employer.

Yes; you read it right, remember those communications from your HR department asking you to choose whether you would like to include your parents in the group health insurance (GHI) scheme of the organization for an extra premium. And, you passed that opportunity just to save a little money. You did so, as your parents are not covered for free unlike yourself, your spouse and your children.

Well, after reading this, you would definitely sign up and would not mind paying the premiums too. So, let’s start with knowing a little more about GHI.

What is a GHI?

Companies and firms offer health insurance coverage to employees, their spouses, and their children. The primary reason being, the creation of a loyal and motivated workforce for the organization. The premium for this scheme is paid by the company. However, some firms also extend this benefit to the employee’s parents for free or may ask the employee to bear the additional premiums.

Advantages of including parents in employer’s GHI

The group insurance policy works under certain terms & conditions which are applicable to the entire group insured. Let’s have a look at how it works in your favour:

1. No medical examination

Under an employer offered GHI plan, you are not required to go for any medical check-ups. You and your family members get automatic coverage from Day one without any hassle or paperwork.

2. Low-cost affair

The premiums applicable to a GHI policy are 30-35% cheaper against the amount payable for individual health plans. So, if you compare the premiums payable on individual health insurance plans for your parents against employer’s GHI plans, you would end up saving a lot more than expected.

3. No waiting period concept

Another important benefit of group health insurance is that there is no specific waiting period for any illnesses. All the illnesses are covered right from Day 1. Let’s say, cataract treatment has a waiting period of 24 months under an individual health insurance policy. The same illness is covered right from Day 1 under a group health insurance plan.

4. Pre-existing diseases covered

The pre-existing diseases are also covered by the group health insurance right from Day 1. So, if your parents are already diagnosed with health conditions like diabetes or heart ailments or any other illness, there is no need to worry. On the other hand, individual health insurance plans have a waiting period of 48 months. This benefit can only be enjoyed under a group health insurance plan.

5. Adding top-up or super top-up

The coverage offered under a GHI plan is for a small amount say Rs. 5 lakh. However, there is no need to worry. You can increase the coverage to even higher levels by attaching a top-up or super top-up plan to your employer-provided GHI plan. You can use the group insurance sum assured to cover your hospitalization expenses till the deductible limit. And once you breach the deductible limit, the coverage from top-up or super-top will come into effect. However, do remember that under a super top-up plan, the deductible amount has to exceed over the entire policy year. On the other hand, under a top-up, the deductible must be breached in a single hospitalization.

Hence, even if your employer is not providing health insurance coverage to your parents free of charge, you should definitely apply for it, even if you have to pay the premiums yourself.

Though the GHI scheme provides a host of benefits, it only acts as a temporary cover.

The following are the two major drawbacks:

1. Discontinuation of scheme by the employer

Yes, your employer may choose to discontinue the scheme anytime. This is the case especially with the private limited companies in India. They can also choose to reduce the coverage provided under the scheme anytime they want. They may also stop extending this benefit to your parents. This can have a major impact on your and your family’s health coverage.

2. Discontinuation due to change of job

Another major disadvantage is the automatic termination of the policy on changing your job. The reason being the GHI is valid only until such time you are part of the group i.e. the company or firm you are employed with. Once you leave your job and are no longer associated with the company, the policy you have enrolled under will come to an end, and along with it, the benefits would come to an end as well. If your new employer provides a policy with same benefits you should definitely opt for it. However, you would be left on your own without any cover during the transition period i.e. until the time, the new GHI plan comes into effect.

One should compulsorily have an independent health insurance plan for his parents, and use the group health insurance as a backup for the main policy. The group health insurance plan can be used till the completion of the waiting period applicable for the pre-existing diseases and other specific diseases and surgeries. Post this the group health insurance plan can be used as a backup plan.

What did we learn?

Whatever, the drawbacks may be, a GHI policy is an excellent choice to take care of the medical expenses during your entire working life.

Thus, this scheme is a win-win situation for the employee. You get free health cover along with getting all the members of your family insured under one health insurance policy. Even if you have to pay premiums for including your parents from your pocket, the amount would be quite less, as against an individual insurance policy bought on your own. The cost-effectiveness and conveniences offered by a GHI plan definitely has advantages that are hard to ignore.