Hello, my dear friends,
I have a query related to Mediclaim for my office staff. We are planning to provide Mediclaim benefits to our staff under the Group Health Insurance (GHI) scheme of a private medical insurance company. Can you please help me understand whether the annual premium payable will have to be borne entirely by the company, or whether a part of it can be recovered from the staff as monthly deductions from salary? If so, the deduction should be under what head, and what is the general percentage of the premium amount that can be recovered from staff?
Also, will it be a wise decision to deduct a percentage of the premium amount from staff pay and thus compromise their net take-home salary?
Kindly advise. Looking forward to your suggestions. Thank you in advance.
From India, Kolkata
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I have a query related to Mediclaim for my office staff. We are planning to provide Mediclaim benefits to our staff under the Group Health Insurance (GHI) scheme of a private medical insurance company. Can you please help me understand whether the annual premium payable will have to be borne entirely by the company, or whether a part of it can be recovered from the staff as monthly deductions from salary? If so, the deduction should be under what head, and what is the general percentage of the premium amount that can be recovered from staff?
Also, will it be a wise decision to deduct a percentage of the premium amount from staff pay and thus compromise their net take-home salary?
Kindly advise. Looking forward to your suggestions. Thank you in advance.
From India, Kolkata
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Provision of Mediclaim Insurance
Though the provision of mediclaim insurance is not statutory, large business houses often cover their employees under these policies to protect them and their families in case of any medical emergency. The premium is based on factors such as age, coverage limit, and extension of benefits. For a new company, the first-year premium would be standard. However, based on subsequent claims, the next year's premium will be determined by the insurance company. It is advisable to opt for a public insurance company instead of a private one, as public sector insurance tends to be cheaper and more likely to accept your assurance.
Deductions from Employees
Regarding deductions from employees, it is purely at the discretion of the management. It can be either free or 50% contributory from the employee's side. Providing medical insurance to your employees will give you a competitive edge over your rivals in terms of recruitment, appraisals, welfare, and talent retention within your company.
From India, New Delhi
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425Though the provision of mediclaim insurance is not statutory, large business houses often cover their employees under these policies to protect them and their families in case of any medical emergency. The premium is based on factors such as age, coverage limit, and extension of benefits. For a new company, the first-year premium would be standard. However, based on subsequent claims, the next year's premium will be determined by the insurance company. It is advisable to opt for a public insurance company instead of a private one, as public sector insurance tends to be cheaper and more likely to accept your assurance.
Deductions from Employees
Regarding deductions from employees, it is purely at the discretion of the management. It can be either free or 50% contributory from the employee's side. Providing medical insurance to your employees will give you a competitive edge over your rivals in terms of recruitment, appraisals, welfare, and talent retention within your company.
From India, New Delhi
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There is no regulation that specifies whether the company must pay the Mediclaim premium or recover it from employees. It is a management decision, considering HR/IR issues and whether they want to offer it as a perk (or reflect it in a higher CTC). The decision should be based on various circumstances that are not specified here. However, the amount is likely small and should not significantly impact the company.
From India, Mumbai
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From India, Mumbai
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Hi, firstly, I greet you for having the idea of introducing a family coverage insurance scheme to your staff.
Choosing the Right Insurance Company
When it comes to the issue, it must be a public insurance company. The staff should feel a sense of trust that we are covered by a national institution. They would be thankful to you if it is a government-backed public limited company like LIC, UIC, GIC, etc. Why only choose a government-supported insurance company? Usually, a private insurance company has limited service jurisdiction, specific hospitals, identified limits, mostly in cities and some areas, with a corporate nature available in mega cities only. Private insurance companies state that if any service dispute is raised by policyholders, all legal disputes will be in their HQ area courts only, which is a known fact.
Factories are usually located on the outskirts of cities and villages in rural areas. Moreover, government-assured insurance companies have jurisdiction over entire states or even the entire country, regardless of rural or urban areas, corporate hospitals, or private clinics. Therefore, it is preferable to choose a government-supported insurance company.
Suggestions for Premium Payment
Moving on to the premium, there are two wise suggestions:
1. If you bear the entire premium annually, it is a very good decision, and your staff will greatly appreciate the employer's gesture.
2. If the company faces losses and opts to cut expenditures, they may choose to stop providing free insurance to the staff. In such a scenario, the workers lose the benefit of insurance coverage. This recently happened in an Aero Electricity company, where initially, the company bore the cost of premiums for the first two years for all staff. In the subsequent years, the company ceased paying for free insurance, leading to demands from workers to at least provide them with their individual policy numbers so they could pay the premiums and continue their policies with the insurance company. However, due to other reasons, the company deferred these requests.
Therefore, if you are certain that the company is economically sound and will never stop the free payment of premiums, you can proceed. If unsure, consider an alternate arrangement where the company pays all premiums for the staff in the first year and then shifts the responsibility to the staff to pay individually and renew their accounts in the insurance company in the second year.
The idea of a 50/50 split is not recommended as it may lead to staff suspicion regarding the company's contributions and intentions. It is better to choose a public limited central government-run insurance company to alleviate any doubts among the innocent families of the staff. Opt for an alternate-year arrangement with free total contribution of all staff premiums.
All the best. Go ahead.
From India, Nellore
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Choosing the Right Insurance Company
When it comes to the issue, it must be a public insurance company. The staff should feel a sense of trust that we are covered by a national institution. They would be thankful to you if it is a government-backed public limited company like LIC, UIC, GIC, etc. Why only choose a government-supported insurance company? Usually, a private insurance company has limited service jurisdiction, specific hospitals, identified limits, mostly in cities and some areas, with a corporate nature available in mega cities only. Private insurance companies state that if any service dispute is raised by policyholders, all legal disputes will be in their HQ area courts only, which is a known fact.
Factories are usually located on the outskirts of cities and villages in rural areas. Moreover, government-assured insurance companies have jurisdiction over entire states or even the entire country, regardless of rural or urban areas, corporate hospitals, or private clinics. Therefore, it is preferable to choose a government-supported insurance company.
Suggestions for Premium Payment
Moving on to the premium, there are two wise suggestions:
1. If you bear the entire premium annually, it is a very good decision, and your staff will greatly appreciate the employer's gesture.
2. If the company faces losses and opts to cut expenditures, they may choose to stop providing free insurance to the staff. In such a scenario, the workers lose the benefit of insurance coverage. This recently happened in an Aero Electricity company, where initially, the company bore the cost of premiums for the first two years for all staff. In the subsequent years, the company ceased paying for free insurance, leading to demands from workers to at least provide them with their individual policy numbers so they could pay the premiums and continue their policies with the insurance company. However, due to other reasons, the company deferred these requests.
Therefore, if you are certain that the company is economically sound and will never stop the free payment of premiums, you can proceed. If unsure, consider an alternate arrangement where the company pays all premiums for the staff in the first year and then shifts the responsibility to the staff to pay individually and renew their accounts in the insurance company in the second year.
The idea of a 50/50 split is not recommended as it may lead to staff suspicion regarding the company's contributions and intentions. It is better to choose a public limited central government-run insurance company to alleviate any doubts among the innocent families of the staff. Opt for an alternate-year arrangement with free total contribution of all staff premiums.
All the best. Go ahead.
From India, Nellore
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