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After the Covid-19 pandemic, the government of India has made it mandatory for all the employers to offer medical insurance to their employees. The companies have also become quite proactive in offering financial aid to their employees against medical emergencies, accidental injuries and any other such emergencies.
Undoubtedly, employees are the most valuable resource of the company and thus securing and protecting their financial and legal obligations in case of the unfortunate and unforeseen events, is one of the top priorities of the company.
Let’s explore how employee benefits insurance policies help employees in the need of hour and also know more about their features, benefits and inclusions in the article listed below.
What Is The Meaning of Employee Benefits Insurance Plan?
Many insurance companies in India, provide comprehensive employee benefits insurance plans which have been crafted specifically to protect employees.
An employee benefits insurance plan is a kind of insurance plan which is offered by an employer to its employees. It provides health and life coverage to its employees in the case of medical or other kinds of unforeseen emergencies. Such initiatives not just help the employees in their unfortunate events but also helps the employers to retain existing employees and attract new employees in their respective organizations.
Moreover, these insurance plans benefit the employees and also cover their family members such as dependent children, parents, parent-in-laws and spouse. The employees get the coverage of accidental death and disability, medical emergencies and hospitalization costs, retirement and gratuity benefits among others.
How Does Employee Benefits Insurance Work?
Employee benefit insurance works similarly like any other individual health insurance policy. The only difference here, that the master policyholder is your employer who offers the health insurance policy benefits to you and the other employees with a sole aim to provide financial help to you and your team in case of any medical issues. For this, the employer pays the premium for every insured member under this policy, thus it works as an employee benefit insurance scheme which is offered by a particular company to their group of employees.
Under any employee benefit insurance, the main master contract, falls under the possession of the policy buyer such as employer or an entity like an association or trust. However, the policyholder such as employees are provided with coverage certificates.
Benefits insurance schemes differ from organization to organization; however, it generally includes coverage for health or life insurance, life, and disability insurance and retirement savings plan benefits.
Thus before crafting an effective and efficient employee benefits insurance plan, the employers must take into consideration those employee benefits which meet both employee requirements as well as the objectives of the employer.
Type of Employee Benefits Insurance Policy
There are broadly three kinds of employee benefits insurance schemes which are offered by any insurance company, such as:
Group Health Insurance: A group health insurance scheme is a master policy which acts as a comprehensive health cover for all the members of a business establishment under the same contract. This coverage is also applicable to employees and their family members also. Such plans provide similar insurance coverage and benefits to all the members of a group irrespective of their work experience, role, age, gender. Medical benefits included under this kind of policy include hospitalization expenses, maternity coverage, daycare treatment cover, critical health insurance, worldwide treatment costs, ambulance coverage, among others.
Group Life Insurance: A group life insurance policy offers life coverage protection to the group of employees which falls under a master contract policy. The employees are eligible to get the coverage without undergoing any pre-medical checkup or any such tedious process. It is a common employee benefit which is designed to offer financial benefit to the insured’s nominee, if they die while being the part of the organization.
Group Personal Accident: This plan offers financial protection to policyholders and their families against accidental injuries or death. This kind of policy is generally offered by the business or industrial establishments as accident policy coverage to their employees, workers and members.
Inclusions of Employee Benefit Scheme:
- Medical Insurance
- Dental Insurance
- Vision Insurance
- Cancer Insurance
- Critical Health Insurance
- Life Insurance
- Accidental Death Insurance
- Accidental Disability Insurance
- Retirement Plan
- Gratuity
- Pension Fund
Benefits of Employee Benefits Insurance Policy
Low or No-Cost Insurance Plans: The premiums of an employee benefit insurance plan are generally very lower as compared to private to individual insurance policies. Most of the time, the premium of such plans is absorbed by the employers. Only in a few cases, it is shared by the employees.
Covers Legal Liabilities: The employee benefits insurance plans are the easiest way which helps you to cover all sorts of legal liabilities arising out of any unforeseen event. It helps your family members even if something happens to you while being a part of the company.
Provides Annuity: Certain employee benefits schemes also provide the avenues for long-term savings and income which can be realized at the time of retirement as pension income.
Fulfill Long-Term Financial Goals: The employee benefits insurance policies also help members with financial protection in terms of achieving long-term financial goals such as children’s education, their marriage or retirement planning.
Accident Coverage: The employee benefit scheme offers protection against any accidental injuries, death or disabilities. Here, the nominated family member also receives the compensation, if the policyholder dies within the policy tenure and while being the part of the same organization.
Tax Benefits: An employee having an employee benefit insurance policy will always receive tax advantage under the Section 80C of Income Tax Act, 1961, for the premiums paid by them. Not just the employees, the employers also receive heavy taxation benefits as the employer can show a premium amount as the business expense to receive tax benefits.
Receive Cashless benefits: An insured employee can always avail cashless services at any of the networked hospitals, which act as a boon in case of any medical emergencies. Here, the policyholder is not required to pay anything upfront to the hospital, rather the claims would be directly settled between the insurance company and the networked hospital.
Eligibility Criteria For An Employee Benefits Insurance Policy
We have listed out the basic eligibility criteria for an employee insurance policy, as it differs from one insurance provider to another. Here are few basic criteria:
- A company, corporation, partnership firms, and private and public companies can provide such schemes to their employees.
- An employer should minimum have twenty salaried employees registered under them. However, the criteria for the minimum number of employees or members can be different for different insurance companies.
- An employer and employee should have a salaried relationship which should be well-reflected in the books of accounts.
- Sole proprietors, family business and part-time employees do not qualify for an employee benefits insurance plan.
“The purpose of insurance is to spread risk among a large number of people to make it more affordable for everyone.”
Buvanesh
Bottom Line
If you are very much a part of an organization or association, then an employee benefits insurance policy is a must buy, as it can be proven beneficial in many ways. It provides health coverage and life coverage with a minimal contribution. Thus, it is always advisable to consider such insurance schemes from employers after an exhaustive research of all terms and conditions.
