Employers these days ought to offer perks and benefits to employees if they want to retain the employees. A mere basic pay is not enough for an employee to remain in the company for long. What employees see is what benefits a company is providing; and medical allowance/assistance is preferred by a majority of people.
What HR should consider before offering health insurance
Be it for an employee of a small company or a multinational giant, health insurances are a most sought for perk for employees and do contribute positively towards increasing the productivity of employees – hence bringing the company to positive trajectory of growth. However, as an employer, you have to take effective steps to ensure that the benefit is not adding extra burden on your financial statements.
- Weigh out the disadvantages
When a company provides for employees insurance, it is liable for paying regular insurance premiums. It must be noted that the premium may not be constant and the company might have to pay an amount more than what it has initially estimated. In addition, with every new recruitment, the burden for paying for an extra employee increases. In addition, some insurance providers have strict terms for premium payments and any delay might result in financial penalties. Therefore, it is important for a company to carefully analyze the terms and conditions before going with an insurance provider.
- The number of employees in your company
Choosing the right policy also depend on the number of employees a company has. Small companies normally have a small amount of capital to use for insurance payments. Therefore, it is more preferable for such companies to buy policies that have low annual premium. An advantage that a small company has is that it can run surveys and gauge what are the needs of the employees and what type of health coverage they are looking for. This will help a company choose the policy that best suits the need of employees.
- Look for a renowned trusted insurance company
There are many imposters that pose to be insurance providers but rob uninformed people of their money. Companies can be an easy target – especially the small ones – since these imposters would lure the companies with their low rates. It is better to carry out research in a careful manner and to choose an insurance provider which is trust worthy and credible.
- The post you are offering the insurance too
Employees hired on posts that have a high turnover rate can be exempted from the facility. The company may reserve the facility for employees that have a longer contract. Or the company can take it this way. Similar to how salary varies with each post, the company can offer different insurance plans to employees based on their designation.
This is the most important factor which determines the worth of insurance. As per definition, insurance coverage is ‘the amount of risk or liability that is covered for an individual or entity by way of insurance services. Insurance coverage, such as auto insurance, life insurance – or more exotic forms, such as hole-in-one insurance – is issued by an insurer in the event of unforeseen occurrences.’
- Claim process
This includes the procedure of pre or post payments by the insurance company. It refers to the process of submitting medical slips to the company and claiming the money. This is the core procedure in any insurance company.
- Existing illness
This is a tricky part and perhaps the most debatable one. A pre-existing condition is a medical condition that a person had before his/her health insurance went into effect. For employers, it is necessary to have a list of medical conditions that an employee has to better decide which insurance plan is best suited for them. Since insurance plans are based on contingency, a preexisting medical condition may not go in the favor of an employee. In this regard, the HR department might suggest employees to distribute the burden of insurance payments.
- Deductible, co-payment and the coinsurance
Deductible is the amount that you have to pay before the insurance companies starts covering your eligible health costs. Co-payment is something similar to deductible but has to be paid each time you want to use your insurance. However, coinsurance is the percentage of cost that you will have to pay during any medical procedure (this is your share of the total cost). As it is evident from the definition, this is how the insurance companies work, thus it is one of the core information that has to be evaluated by the HR before final selection.
For companies, providing health insurance is the best way to attract employees. In today’s world where living is becoming more expensive, incentives like these allow employees to remain in the company for a longer period.