Can we claim Group Health Insurance from Two Companies?

If you are an employee at an organisation, you are most likely covered under their group health insurance policy. Group health plans are one of the most reliable and cost-effective insurance plans to be covered under.

From the low cost of premiums to high coverage which accounts for the medical needs of a large pool of employees, there are several benefits over individual health insurance plans. 

But is it possible to claim group insurance from two different companies? To be able to answer that, we need to understand:

• What is an Individual & Group Health Insurance?
• What are the benefits to employees under Group Insurance
• What is primary insurance and secondary insurance?
• Pros and cons of being covered by multiple health insurance policies

What is an Individual & Group Health Insurance?

An Individual Health Insurance is a comprehensive health insurance policy which provides cover to an individual seeking medical coverage. Sum insured is a primary factor on which the cover is based and also an affordable premium cost is required to be paid.

It can also be taken on a family floater basis if it includes their family members. 

Let us take an example to understand the situation better:

X purchases an individual health insurance plan with a sum insured of ₹10 lakhs. The insurer will provide coverage only up to ₹10 lakhs. If the bill amount is in excess of the sum insured, it will have to be borne by the insured.

A Group Health Insurance is a lucrative plan that an organisation/company purchases for their employees and their family. The idea is to provide health cover to individuals working for them as employment benefits. 

In India, corporations of all sizes provide the facility as it is beneficial for the company (tax benefits) as well as promotes employee satisfaction.

Here are the some details to keep in mind:

• Cost of Insurance

As it is the company who takes care of the group insurance, the cost of the cover or related fees are nil; employees do not pay anything out of their pockets.

However, if they wish to procure additional cover for either their spouse/family or children they can do so by paying an additional premium cost. Even so, the cost of premium is often a meagre amount which is directly deducted from the monthly salary of an employee.

This helps to safeguard their interests as they do not lose a major chunk of their income in premium payments; it is evenly taken care of throughout the financial year.

• Obtainability

When it comes to individual vs group cover, any situation of medical history could be the ground for rejection of individual health policy. One of the major benefits of group insurance is that the insurance providers do not look at individual employees. They look at the number of employees which are being grouped together under any plan. 

• Validity

As for a group insurance policy, an employee is entitled to enjoy the benefits as long they are employed within an organisation. On resignation, the group cover ceases to exist. 

Benefits to employees under Group Insurance

• No waiting period and cover is provided immediately
• Prior health check up is required only in certain types of plans
• Pre-existing diseases are formed part of the plan from the first day itself 
• Range of diseases covered is quite wide
• It can be customised as per need in most of the cases which helps to provide great flexibility 
• Women have the advantage of maternity cover for the protection of their new-born baby’s expenses
• The premium cost is quite low when compared to an individual health insurance cover

Can you claim group health insurance from two companies?

Legally, one is entitled to have multiple insurance plans to address different types of circumstances. 

However, here are some points to remember, 

• Having two plans does not mean that they would be reimbursed twice for a bill of medication
• The total amount that companies would reimburse would never exceed 100% of the cost
• Wherever there is more than a single plan, the coordination between its benefits will decide which insurance company will help to settle the claim first.

This is where we introduce the concept of Primary and Secondary Insurance. 

What is primary insurance and secondary insurance?

Primary Insurance – Primary insurers may allow cost sharing but they will be the first one to settle the claim.

Secondary Insurance – After the primary insurance settles, part of the share of the remaining bill will be cleared by the secondary insurer. Their job is to take care of the balance amount to be settled.

Does one still have to bear out of pocket expenses even after having two health plans?

• A person covered by multiple plans is required to pay all the applicable premiums and deductibles for both plans. 
• The rule is to go step by step as your secondary insurance would not pay toward your primary’s deductible. 
• It is quite likely that there is other cost sharing or out-of-pocket costs, such as co-payments or coinsurance.
• If an employee is in a PPO (Preferred Provider Organization) plan, the primary policy may have provided network rules. In such cases if there happens to be any out-of-network provider who isn’t covered by your plan, then the primary insurance is not liable to cover the costs 
• Even the secondary insurance won’t entertain such incurred costs as the primary plan’s rules were not followed.

Pros and cons of being covered by multiple health insurance policies

For companies, it is quite easy to find an insurance provider to avail group insurance policies. The company benefits to an enormous extent; the larger the pool of employees being covered under the plan, the lower the premiums and deductibles will be. 

This simply means that a larger group of people are at lower risk than smaller groups. Employees also feel valued and taken care of, and motivated as a result of this. On the other hand, companies benefit from employee retention. 

Group Health Insurance Pros

• Convenient to find
• Insurance Brokers provide a good resource
• Familiar to employees due to commonality 
• Protects employees against major as well as minor sickness
• Even in cases of hospitalisation of a single day, certain policies ensure they cover that cost incurred too
• It provides safety (protection by cover) for not only employees but also their family members as plans have an option to extend the same to employees’ families 
• There would be cashless treatment if treatment is done at network hospital with best kind of facilities
• Tax savings is one of the most lucrative aspects as it helps to get genuine deductions and no other alternative for tax savings need to be found
• Free and regular health check-ups help in constant awareness of one’s health condition and accordingly as per examination precautions and necessary changes can be made.