Employee Benefits Insurance: What does it cover?
Employees are a company’s greatest asset. You want to attract and retain the best and do so by providing an environment that is encouraging, stimulating and making them feel like they are an integral part of the company. A Group Insurance policy for employees is good as it helps take away some burden when the employee falls ill or is injured. In some cases, having such a policy is mandated by law (Migrant Domestic Workers, Work Injury Compensation, Foreign Worker Medical etc), however, most companies do so by choice and rightfully so!
Typically, in Singapore, employees are given 14 days of medical leave and 2 months of hospitalization leave. Many companies offer employee benefits such as access to Group Insurance coverage which basically is a means to ensure the employees are all covered under an insurance policy. It does not matter the size of the company and minimally you can start a policy plan with just two employees.
Where one begins to see a difference in plans across companies is through the scope of coverage and amount of coverage offered. In some cases, the employee might need to pay a co-insurance portion or even a deductible before the insurance benefit kicks in.
Companies choosing a Group Insurance policy can choose from a variety of coverages which include:
Group Hospital & Surgical Benefit
This reimburses hospital expenses due to illness or injury. It can be used in either Private or Restructured Hospitals but usually has a cap on the quantum of claim from the policy.
Outpatient Clinical, Specialist and Diagnostic X-ray and Laboratory Tests
This covers cashless outpatient treatment at panel General Practitioner (GP) clinics. It can also include specialist consultation and diagnostic X-ray and laboratory tests that do not result in subsequent hospitalization or surgery.
This reimburses charges for dental services (Extraction, Dental, Scaling and Polishing etc). There is usually a maximum limit per policy period (Eg, $500 per year).
Group Term Life
This pays out a lump sum payment upon death, total and permanent disability or terminal illness.
Group Living Assurance
This provides a lump-sum payment upon the diagnosis of any of the covered critical illnesses (Eg, Cancer, Stroke, Heart Attack etc).
Group Personal Accident
This covers Accidental Death and Total and Permanent Disability arising from accidents. This coverage usually covers you worldwide and takes into consideration your Occupational Class (Risk level associated with your occupation).
I am the benefactor of a good Group Insurance coverage through my husband’s employment. As dependents, my children and I are also covered under his company insurance coverage. We have had to use it many times especially for the children’s outpatient medical expenses. This is an area that is not covered under our individual insurance coverage (unless it is due to an accident!). Like his, some of the good corporate insurances offer the ability to customize each type of coverage based on an employee’s personal/ family setup. Since we have personal hospitalization insurance, we use the equivalent dollars in the company insurance to maximize accident, disability and death covers. Here are some pointers when looking through your company coverage, or even when assessing employee benefits while applying for jobs at a new company.
Benefits of Group Insurance
Since this is a group insurance policy, premiums are going to be considerably lesser than what you would normally pay as an individual. As such, I often choose to maximize our family coverage without duplicating what we have under our individual coverage.
Covers Gaps in Individual Insurance Coverage
Areas I tend to focus on are outpatient medical benefits (claiming for doctors’ expenses for common ailments and even vaccinations!) and hospitalization. Even though my family has our own individual hospitalization coverage, given the new changes in hospital plans with a 5% co-payment, I feel that Group Insurance coverage for hospitalization can be extremely useful going forward. Especially if you still want to have good private hospital coverage and not have to experience claims adjusted premiums.
This coverage also helps if an individual has no personal insurance coverage at all and is at least covered through their employment.
Limitations of Group Insurance
One limitation about Group Insurance coverage is that the coverage offered is usually insufficient. There are caps to the amount of coverage one can have especially for hospitalization. And in some cases, the employee is expected to pay a deductible before the insurance kicks in. This really depends on the insurance policy your company has taken up and it differs from insurer to insurer. Some companies have excellent healthcare policies for their employees, and they pay good dollar for it. But most companies tend to choose basic coverage as premiums must be paid per employee and this can end up being very costly especially where a big company is concerned.
False Sense of Security
Many times, I have clients telling me that they have company insurance coverage and do not need their own individual coverage. Having your company coverage should be viewed as a bonus and not as the only cover you should have. What if you contract an illness or get injured and can no longer be employed? The company cover will have to end at some point and should you not have your own coverage, you will be stuck with nothing.
Group Insurance through employment is usually not portable. This means that the coverage will end once your employment contract ends. As such, no matter how good your company insurance coverage is, it might have to come to an end too. What is worrying is if a condition occurs whilst you are employed and if the next company that hires you has good enough coverage which includes pre-existing conditions.
When I speak to clients who have Group Insurance policies under their employment, I always ask to have a look through what it is they are covered for. This then enables me to help them plan their own coverage better and take into consideration what they have covered under the employee benefit.
Many employees have benefitted greatly from having a good Group Insurance coverage provided by their employers. However, you should always also have your own individual policies as a safety net just in case there are changes to your employment terms and benefits.
It also enables you to dictate the coverage you have as in some cases, you do not have a choice of what the company chooses to cover you for and for how much.
If you have any questions about your Group Insurance coverage provided by your employer or are a business owner looking to insure your employees with a Group Insurance coverage, leave me a message below or drop me an email at email@example.com and I would be happy to help. 😊