Medical Insurance policy for startups - where employees get their own policy and the Employer reimburses it with a Cap?

I had a question about Medical Insurance Benefits for employees. Has anyone prepared a policy where employees get their own policy and the Employer reimburses it with a Cap? What are the pros and cons of this approach?

Dear Avani-Shroff,

The approach you describe, where employees obtain their own policies and the employer reimburses up to a capped amount, can have some potential advantages as well as considerations to keep in mind.

One potential pro of this model is that it can provide employees with more flexibility and choice in selecting a plan that best suits their individual or family's healthcare needs and preferences. This personalized approach may be appealing to a diverse workforce. Additionally, the employer cap can help control costs and budget more predictably.

However, a key consideration is ensuring the reimbursement cap is set at an appropriate level to make quality coverage affordable and accessible for all employees. If the cap is too low, some staff may struggle to afford suitable policies. There could also be administrative complexity in verifying individual employee plan details and processing
Thanks

Hi,

When you suggest employees to buy their own Mediclaim policy with reimbursement option by employer then it will be treated as individual mediclaim policy and not group medi claim insurance. Both have its own pros and cons.

Under Group Medi claim insurance Pre-existing Diseases will be covered from day one where as if it is individual mediclaim policy waiting period will be applicable.

Pre-policy Medical Check-up will be required especially for senior citizens under individual mediclaim policy whereas under Group Mediclaim policy pre policy medical check-up will not be required.

Premium paid under individual mediclaim policy will be tax exempted under 80D whereas no tax exemption applicable for individuals.

No claim bonus will be applicable under individual mediclaim policy whereas the same will not be applicable under Group Mediclaim policy.

When you opt for Group Mediclaim Policy Employer have the option getting competitive quotes from different vendor whereas @ individual mediclaim policy cost factor may be high.