Recommendations on group health insurance for startups?

Hey Sandip,

Quick recommendations:

1. Pick insurer that processes claims in-house. Sellers tend to pitch lower premium and assign TPA (third party administrator) in the policy to manage claims. Experience with TPAs is inferior compared to direct claim management with insurer.

2. If the team size is less that 15-20 people, it may not be feasible for insurance co to provide cover to parents. Remember, you don't get to pick and choose for which employee you want to give parental cover. It is either all or none, meaning you have to offer parental cover to all employees, then only insurer gets to spread the risk, else they will only get risky customers in the pool.

3. I don't know what is your budget, but normally group policy premium is a function of room rent limit, treatment capping and employee copay. Let me explain.

> Room rent limit: Insurer will limit access to a room rent, say 3000 per day. Any expense above this means that insurer will only pay a small part of the overall hospital bill (please search for term proportionate deduction)

> Treatment capping: Insurer can say that while sum insured is 3 lakhs, it will pay only 1 lakh for knee replacement surgery, cardiac surgery etc. Smartly the insurer puts caps on what it will actually pay for more common ailments even when you have a 3-5 lakh cover.

> Copay: Insurer requires employee to pay 10-20% of the bill, rest is paid by insurer

Now, these are all mechanisms to limit what insurer pays in claim. The more an insurer has to pay in claim, the more premium it will charge the corporate. No free lunches, you see!!

There is no perfect answer, the right answer lies somewhere in between. Use the framework I have listed above to decide on the policy.

Happy to answer any follow-up questions.

Anuj Jindal

Co-founder

SureClaim