Get ready to pay more for the health cover provided by your company. While renewing group health policies, an increasing number of companies are opting for co-payment. This means a part of the claim amount has to be paid by the employees.
Insurers, on their part, are offering discounts of 10-30 per cent on premiums to companies which opt for such policies.
According to industry officials, more than 50 per cent corporate clients are going for co-pay policies, as group health policy premiums have risen by 25-30 per cent this year.
The co-pay element works at various levels. It may be a percentage of the claim amount or a fixed amount the employee has to pay. There may also be a cap on the room rent, as other hospital expenses are usually directly proportional to this.
For instance, if the amount to be paid by the employee is fixed at Rs 10,000, then for any claim, the share of the employee will be limited to Rs 10,000. The rest will be borne by the insurer.
However, if employees have to pay a fixed percentage, say 20 per cent, they will have to pay Rs 10,000 for a claim of Rs 50,000.
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“The loss ratio from health insurance is estimated at 120-130 per cent. There are also many instances of forged hospital documents inflating the claim amount. This will ensure some accountability on the part of the claimants,” said Ritesh Kumar, MD & CEO, HDFC ERGO General Insurance Co.
Group health premiums are expected to rise 25-30 per cent this year. So, it benefits companies, too, as there is a rebate in co-pay policies, he adds. “With premiums rising, corporate houses are taking steps like reducing the coverage or providing the cover to only the employee, his/her spouse and children, and not parents.
In co-pay, the coverage remains the same, but a part of the liability is passed on the policyholder,” said a top official of a public sector general insurance company.
“Insurers are looking at each line of business and trying to underwrite profits. Insurance companies are advising such policies as the claim experience under group health policies has been very bad,” said Subrahmanyam B, vice-president & head, health vertical, Bharti AXA General Insurance. Such policies reduced the claim cost and kept a check on over-billing, he added.
“Co-pay policies are taken by companies willing to maintain the cover to employees. The trend has picked up recently,” said Sanjay Datta, head, customer service, health & motor, ICICI Lombard.
According to industry estimates, health insurance accounts for more than 25 per cent of the general insurance industry. Group health premiums are higher by 25-30 per cent than for individual health policies.