Companies are withdrawing health insurance cover facility for employees’
parents under group mediclaim policies citing rising costs. Parental
cover, routinely provided by companies around five to six years ago, is
now sponsored by employers in just 36% of group covers. In almost every
employee benefit group policy where parental cover is included, a bulk
of the claims is not from employees, but for treating their parents. It
is obvious that companies are discontinuing the cover to prevent their
premium bills from galloping every year.
Although many corporates said employees could include their parents by paying separately, the move resulted in adverse selection-those with healthy parents chose not to pay while employees whose parents had pre-existing ailments stayed on, making it unviable for insurers without hiking rates. According to an employee health and benefits study by insurance broker Marsh, only 36% organizations now sponsor cover for dependent parents under employee group mediclaim policies. The number of policies covering parents (including cover sponsored by employee) fell to 54% from 65% last year. "On an average, every year around 10% corporates with mediclaim stop sponsoring parental cover.
This number which was 70% at the time of detariffing has come down over the years to 36%" said Sanjay Kedia, MD, Marsh India. He added that there is a need to have an environment where companies can cover pre-existing ailments so that there can be a policy which will provide benefits through collective bargaining and health management. "This is going to be a big social issue as there will be no cover for parents with ailments," said Segar Sampathkumar, general manager and head of health insurance at New India Assurance. The group mediclaim cover for parents can work if HR departments work out a separate cover for parents with co-payments by employees and employees are given only a one-time option to be part of the scheme," said Segar Sampathkumar, general manager and head of health insurance at New India Assurance.
Seniors left in lurch as companies curb health cover for employees’ parents For companies with a young workforce, particularly in the IT space, that provide comprehensive health cover for dependents, over 60% of their claims is for parents and another 25% for maternity-related claims, he said. In an IT company, for instance, after the parent cover was discontinued and was made optional, a large number of employees chose not to buy it and the parental group policy had to be discontinued. A prominent private life insurer discontinued parental cover after it received a poor response following the cover being made payable by employees. Instead of withdrawing the group mediclaim cover for parents, the right way to tackle costs would be through wellness programmes and encouraging ’responsible consumption’ of insurance benefits, said Kedia.
Another problem hurts parents whose health cover has been withdrawn by their children’s employer. In theory, a senior citizen covered under his/her children’s group mediclaim policy should be able to use the portability route to buy a cover if the employer discontinues the policy. But in reality, no insurer has an individual policy which allows a senior citizen with pre-existing ailments to port into.
source: ET
Although many corporates said employees could include their parents by paying separately, the move resulted in adverse selection-those with healthy parents chose not to pay while employees whose parents had pre-existing ailments stayed on, making it unviable for insurers without hiking rates. According to an employee health and benefits study by insurance broker Marsh, only 36% organizations now sponsor cover for dependent parents under employee group mediclaim policies. The number of policies covering parents (including cover sponsored by employee) fell to 54% from 65% last year. "On an average, every year around 10% corporates with mediclaim stop sponsoring parental cover.
This number which was 70% at the time of detariffing has come down over the years to 36%" said Sanjay Kedia, MD, Marsh India. He added that there is a need to have an environment where companies can cover pre-existing ailments so that there can be a policy which will provide benefits through collective bargaining and health management. "This is going to be a big social issue as there will be no cover for parents with ailments," said Segar Sampathkumar, general manager and head of health insurance at New India Assurance. The group mediclaim cover for parents can work if HR departments work out a separate cover for parents with co-payments by employees and employees are given only a one-time option to be part of the scheme," said Segar Sampathkumar, general manager and head of health insurance at New India Assurance.
Seniors left in lurch as companies curb health cover for employees’ parents For companies with a young workforce, particularly in the IT space, that provide comprehensive health cover for dependents, over 60% of their claims is for parents and another 25% for maternity-related claims, he said. In an IT company, for instance, after the parent cover was discontinued and was made optional, a large number of employees chose not to buy it and the parental group policy had to be discontinued. A prominent private life insurer discontinued parental cover after it received a poor response following the cover being made payable by employees. Instead of withdrawing the group mediclaim cover for parents, the right way to tackle costs would be through wellness programmes and encouraging ’responsible consumption’ of insurance benefits, said Kedia.
Another problem hurts parents whose health cover has been withdrawn by their children’s employer. In theory, a senior citizen covered under his/her children’s group mediclaim policy should be able to use the portability route to buy a cover if the employer discontinues the policy. But in reality, no insurer has an individual policy which allows a senior citizen with pre-existing ailments to port into.
source: ET
