Businesses outsource their staff medical expenses to insurance companies via corporate health insurance. It is the best way to safeguard employees’ interests in the event of illness or bodily injury. However, there are certain corporate health insurance mistakes to avoid.
Selecting the right corporate insurance requires you to analyze deeply the medical insurance needs of employees. You will also need to review a large amount of information. Here are some mistakes to avoid while selecting a corporate health insurance plan.
1. Selecting the cheapest option
Corporate health insurance is expensive. So, it’s tempting to choose cheaper plans to save money. However, you need to remember that selecting a cheaper option is not necessarily the best way to save money. This could be a corporate health insurance mistake that could ultimately prove expensive.
The fact is, there are other considerations apart from cost. These could include the level of service the insurer offers, the speed at which they reimburse claims, the network the insurer has in place, etc. You may save money on the premium if you select a cheap plan. But your insurance will start costing more money when the insurer refuses claims, doesn’t answer your questions, or drags out the claims process.
Some of the cheaper policies may not include wellness benefits or certain health checks that employees often request. This may generate some extra costs in the long run.
2. Selecting a local plan over an international one
Local and international plans serve the same purpose. However, the level of coverage varies greatly. Depending on whether you are based in China, Singapore or Hong Kong, the level of coverage a local plan provides could vary.
The main difference is that international plans tend to provide greater coverage and higher limits. This means that they will better cover the cost of high-end medical facilities in the country you reside in.
The second common corporate health insurance mistake is to select a local plan while your employees travel abroad. In case your employee falls sick abroad, a local plan will not cover his medical claims, and he will have to pay extra fees. In such cases, the best solution is to group the employees that do not travel and cover them with local insurance. The ones who travel may be covered by international insurance. Or, you could buy a comprehensive annual travel insurance.
3. Not including your employees in the selection process
Another corporate health insurance mistake is not including your employees in the selection process of your group plan. Not including them in the selection process will result in the coverage not matching their requirements. If your employees don’t utilize the coverage you provide, there is a good chance that you will not see a positive return on your investment.
Including your employees in the selection of their group plan will allow you to save some time in explaining the policy to them as well.
4. Assuming that pre-existing medical conditions are covered
In the context of healthcare, a preexisting condition is a medical condition that began before a person’s health benefits came into effect.
Usually, when we talk about a medical group plan, we talk about Medical History Disregard (MHD). This means that their medical insurance will cover all medical conditions preexisting included. But this option is only available for group plans that have more than 10 or 20 employees.
It is important to review, in detail, all terms and conditions of your group plan. If you wish to cover your employees for their preexisting conditions, be sure to negotiate this condition with your insurer prior to finalizing the group plan.
5. Not understanding the eligibility requirement
It is important to define who, in the company, will benefit from the insurance prior to setting up a group plan.
Most group plans require that all employees at a certain level in the company must join the group plan. For instance, the insurer will ask that all mid-level employees be enrolled in one plan.
It is advisable to define different levels of coverage according to the position of employees. For example, senior managers receive international coverage while entry-level employees get local coverage. In case one of your employees is promoted, he can then move into the group plan for his new category.
To avoid such corporate health insurance mistakes, we recommend that you work with professionals. They will be in a position to advise your HR director properly.
Clema Risk Solutions can help you for more information on group plans. You can also visit our website to find out about the insurance services for SMEs that we offer, or to get a quote.