Employee health insurance is by far the most popular benefit offered by Indian employers, but buying it, especially for small and mid-sized companies, can be a daunting experience.
A professional Insurance Consultant can help streamline your health insurance purchase and become an ally if you run into insurance problems down the road. Before you put your business in an insurance professional’s hands, it makes sense to arm yourself with knowledge of the health insurance market-place and also on how to find a consultant who is the right match for your business.
Getting started :
Do your homework before you start talking to your insurance consultant. First, identify and write down what you and your employees want in a health plan. This list of features becomes your "summary plan description," which you'll ultimately give to the Consultant as the basis for the price quotes.
Your summary plan description should begin with a few basic features, suggests Srinivas Raju, President of Dr. Insurance. In Srinivas’s experience, many small companies buy health plans that are too rich in features to be sustainable through a bad financial year. Although most companies want to reward employees when the business thrives, taking the health plan away is hardly a good employee-relations move.
To avoid that scenario, Srinivas recommends starting with a list of basic features (such as Standard Health Plan + Pre-existing conditions cover) before branching out into potentially costly add-ons such as Maternity, Dental, Eye Treatment and Health Check-ups etc.
In addition, you'll need to consider what percentage of the premium both the company and the employees will pay. You can also choose to cover a flat amount for each employee. According to Srinivas, most SME companies split the cost, of course the methods can vary. Some employers pay the full premium, while others may pay for employee, spouse and kids only and recover the parent's premium from the employee’s salary.
Who could be your Consultant ?
Choosing the right consultant to manage your group health insurance is extremely important.
You need a consultant who represents you interest, not that of an insurance company. It is common knowledge that insurance companies sell what they want to, not necessarily what you need.
Is your Consultant professionally qualified to understand the complexity of health insurance ?
Has he been in the business for atleast 10 years to understand the insurance market ?
Can he give you options in terms of coverage as well as insurance companies ?
Has he given you an implementation road-map ?
Health insurance is too complex to be purchased on your own. You would need professional help to design / re-design the program, generate options, carry out due diligence and take complete responsibility for implementation of the program. After all, no body would like a nasty surprise halfway through the program.
How can you get the best deal ?
There is a myth in Corporate HR & Finance circles that getting a good insurance deal is all about how you can beat down the price. Very often, decision-makers are seen haggling on the price with the insurers. "It hardly helps", says Indira, Lead Consultant - Health Practice at Dr. Insurance, "when you make the top four insurance companies compete for your business, the best comes out automatically." How to make them seriously compete for your business is precisely the job of the Consultant.
"Underwriters are a blinkered-breed", says Indira, "they look for certain signals in the proposal and when they find them, you can be rest assured of the best deal."
Is the program sustainable for you over the years ?
"Know what you want to cover, and whether you can afford it," advises Srinivas, "You sit down and make hard choices about what you want to cover, and who pays for the premium, acknowledging that each feature has a cost. For example, you might want to cover Maternity benefits and a Dental extension, but recognize that those may drive your premium beyond what you can afford".
If you're just starting out and only have a few employees, you might even consider foregoing a full health plan in favor of a less-expensive standard Mediclaim without any extensions. Once the business takes off and if employees demand it, you can switch to a traditional full-coverage plan.
"Often you can cobble together different coverages, such as a critical illness insurance, a hospital cash plan and a standard Mediclaim with co-pay option, to get almost full coverage at a lower cost to the company. "That's not always the best option, but depending on your need, it could work," says Srinivas, "There are ways to attract an insurer to charge lower premiums for your group and sustain it over the years."
