Employee Benefits Dilemma: Is OPD or Health Insurance More Valued by Your Team?

Employee Benefits: OPD vs. Health Insurance

Our top management has instructed me to arrange health insurance for all employees. I have a few reservations about it. I believe that the outpatient department (OPD) facility for employees is more beneficial and used by the employees than health insurance.

I would like to hear your opinion. Which benefit do you think is more availed of and preferred by employees?

1) OPD
2) Health Insurance

Looking forward to your response.

Regards,

Health insurance is more useful in cases of serious illness, as OPD is not helpful, but hospital admission is necessary. Additionally, this enables us to limit our liability only to the extent of the insurance premium, and most of the time, this cost can still be reduced by involving the employee in the premium amount. Health insurance also covers the employee's family, making it a much preferable option.

Thank you.

[QUOTE=Aamir Ali; 2053557] Before seeking any answers from others, I believe first you must express yourself on how and why you feel a direct OPD facility is better than obtaining health insurance for your employees. Secondly, I want to know what you mean by OPD and what role the employer plays while providing the OPD facility to employees in their time of need or generally.

OPD vs. Health Insurance: A Comparative Analysis

Before seeking any answers from others, I believe you must first express yourself on how and why you feel a direct OPD facility is better than obtaining health insurance for your employees. Secondly, I want to know what you mean by OPD and what role the employer plays while providing OPD facilities to employees in their time of need or generally.

Understanding OPD Allowance

First: If we look at the larger picture, OPD allowance is claimed more frequently compared to hospitalization insurance. Less than 5% to 10% of employees in a medium-sized firm claim hospitalization insurance per month, but more than 40% of employees claim OPD allowance per month.

Second: The OPD allowance I am referring to is the allowance which an employee claims from the organization at the end of the month for the doctor's visit he/she or his/her family (wife & children) made and all the related medical expenses. People with families usually find themselves short of money after spending a considerable amount of their pay on medical expenses. This OPD expense helps them recover that cost to an extent.

Regards,
Aamir

Before going further, I want you to read any health insurance benefits (and terms & conditions) available to an employee in your country. Secondly, how much allowance (Medical Reimbursement) are you supposed to offer to your employees?

- Will this OPD option be enough/available to cover the expenses if an employee requires hospitalization due to any reason or disease, and there are hospital charges?
- Do you really think that the coverage or limit of expenses that the insurance company can bear in case of need by any employee, you (Employer) can cover on your end by using OPD Allowance, or would it be considered part of OPD facilities?

Study these questions carefully. You not only need to work on the calculation of charges but also consider the benefits of the employees for whom you are responsible and agreed to provide health and safety securities.

The Cost of OPD vs. Hospitalization

The cost towards OPD is minuscule compared to the cost setback from hospitalization, which can run into lakhs. Earlier, OPD covers were not available. However, today there are service providers who, for a reasonable membership fee, provide free consultations and discounts at medical and dental clinics, labs, and pharmacies. Many companies accept OPD, dental, and optical bills, which are either completely reimbursed by the company or a tax deduction is provided as per IT laws. Hope this helps. All the best.

Another point for your consideration: there are many health insurance providers who have earmarked a certain small portion for non-hospitalization reimbursements and the rest for hospitalization. As [Login to view] rightly pointed out, it is the hospitalization charges that run into lakhs, and hence are difficult for employees to bear. Additionally, many service providers offer cashless hospitalization facilities as opposed to mere reimbursement. This means that the hospital submits the bills directly to the service provider, and the employee doesn't have to pay the bills. From an employee perspective, insurance is always a better option than a medical allowance.

Cheers!
Radhika

I agree with Radhika. The absolute value is much greater through Mediclaim insurance. Albeit, some companies do not want to incur such costs, in which case, the tax exemption is the only hope.

Regards,
Charles

You may want to provide an OPD facility. The question is whether the employer is ready to bear the cost. While hospitalization cover would cost 5,000-10,000 per year per employee (group covers are much lower, actually), OPD will cost significantly more. For it to be effective, you are talking probably about 5,000 per month in reimbursements. Is the employer willing to take on that cost?