How to choose health insurance plans for employees?

Apr 05, 2024

Whether you are a small business or an established company, providing health insurance for employees is a major deciding factor for individuals who are keen to join your organization.

Not only is it an added advantage when it comes to attracting talent, but it also lets potential employees know that you care about their well-being both in and out of the workplace.

However, not all health insurance is created equal. As an employer, you have to choose a plan with maximum employee health insurance benefits that also doesn’t break the bank.

Know all the vital aspects to keep in mind when choosing health insurance for employees and how it can benefit your business immensely.

Things to consider while choosing health insurance plan for your employees

Select the right sum insured

Sum insured is the maximum amount of money that will be paid by the insurer if and when your employees require hospitalization.

As an employer, it is prudent to take into consideration the rapidly growing inflation in medical expenses when looking for employee health insurance benefits.

If you are also extending health care benefits for employees to their family members, then it is advisable to increase the amount of sum insured enough to cover a household.

Choose a plan more convenient for your employees

When deciding on health insurance for employees, it is important to look at different plan options from an employee’s point of view.

Get into the mind of your employees and see what kind of hospital they would generally go to, which of the health care benefits offered by employers would help them the most, and how sedentary or active is your average employee’s lifestyle.

This will give you a fair idea of all the important features that a company's health insurance must provide.

Check out the network of the hospitals

One of the bigger health insurance benefits for employees is the kind of hospital network included in your health insurance.

Since medical emergencies are unpredictable, it is not always in an employee’s control to choose the hospital they have to go to.

That’s why it is advisable to choose health insurance for employees that provides a wider scope of hospital network across your region/country.

Coverage for employee families

Choosing an insurance policy that extends employee health insurance benefits to their family members is a very thoughtful and generous stance, and can benefit you a lot by attracting new talent.

However, if you choose to provide wider coverage to your employees’ families, then the premium limit will increase proportionately.

Therefore, it is advisable to conduct a cost-benefit analysis before making a decision.

Customized health insurance policy

When deciding on health insurance for employees, it is wise to acknowledge that not all employees seek similar medical assistance.

While some might require it during a medical emergency, others might avail it for long-term illnesses.

Therefore, when choosing insurance, consider the health benefits for employees and opt for a plan that can be customized to a company’s requirements.

As an employer, it is your responsibility to determine whether you want to provide health insurance for employees focusing on accident insurance, mental health issues, maternity benefits, or critical illness care.

Avoid sub-limits

There are many health insurances for employees where certain limits and restrictions are put against the sum insured, such as room rent limits, restrictions on special surgeries and procedures, known as sub-limits.

These sub-limits can inhibit your staff from utilizing their employee health insurance benefits to their maximum capacity.

Therefore, it is the responsibility of the employer to check for these clauses in the fine print and opt for health insurance plans that do not have sub-limits.

5 benefits of health insurance policy for employees

1. Medical expenses coverages

The primary goal of employees health insurance is to receive the best healthcare facilities without your employees having to burn through their savings.

The medical industry experiences sky-high inflation every year.

By providing health insurance for employees, you can provide coverage for medical expenses such as hospitalization charges, room rent, tertiary medical care procedures, ambulance charges, among others.

2. Cashless claim benefit

One of the employee insurance benefits is the cashless claim feature.

Under this feature, you do not have to make any payments on your own, instead, all payments are handled between the insurance provider and the hospital.

However, be careful: You can only avail of this benefit only at one of the hospitals listed in your health insurance.

Choose from one of the hospitals listed and enjoy the cashless claim benefit.

3. Tax benefits

One of the reasons health insurance for employees is an in-demand benefit is due to its tax relief status.

Employees health insurance helps them save tax, as premiums paid towards a healthcare plan are eligible for tax deductions.

A good health insurance plan with a good premium can help tip the balance in your favor during hiring season!

4. No claim bonus

Some insurance providers reward policyholders with a no claim bonus for not making any claims in a certain policy year.

No claim bonuses apply to individual health insurance for employees as well as extended family insurance plans, giving your employees further incentive through company health care benefits.

5. Lifetime renewability benefit

Some insurance companies also offer lifetime renewability benefits to renew their health insurance for employees without any upper limit or age restriction.

This can further decrease financial stress during times of medical emergencies.

Advantages for employers by having a health insurance policy for employees

It is not just your teams that benefit from employee health insurance benefits.

You, as an employer, can also reap the many benefits having health insurance for employees can offer:

Increase retention rate

When a company shows interest in maintaining their employees' and their loved ones’ well-being, the employees feel a sense of security and loyalty toward the employer.

Having health insurance for employees not only offers them financial relief during medical emergencies but also lets them know that their organization prioritizes their health and mental safety first and foremost.

Boost employee satisfaction

Company health care benefits instill in your employees a sense of relief and satisfaction.

Workers have shown to be more favorable towards jobs and employers that offer good employee health insurance benefits.

Since these benefits will be far more costly to afford on a personal level, employees tend to stay at organizations that offer employee insurance benefits far longer as compared to other workplaces.

More productive employees

The health of an employee can be an indicator of their productivity in the workplace.

By placing a focus on their health and mental wellbeing, health care benefits offered by employers foster a sense of security and an employer-centric approach.

This can further boost motivation and happiness within your teams to stay highly productive and overdeliver on company goals and KPIs.

Improve recruitment

Providing extensive company health care benefits is favorable not only in terms of existing employees but potential employees as well.

Robust health insurance for employees can act as an attractive incentive to new hires while also giving your company an edge against the competition.

If a potential employee is deciding between two job offers, having good employee health insurance benefits can easily tip the scales in your favor.

Save money

Who doesn’t love saving money? As an employer, providing employees health insurance helps them save money due to the tax-deductible feature and monetary relief from soaring medical costs.

By saving your employees’ money, you are making health insurance affordable and accessible to all.

Improves the company’s goodwill

Goodwill refers to a company’s value and position in the corporate landscape.

By providing health insurance for employees, you can posit your company as an employee-centric organization among customers and investors.

When you show direct care towards your employees’ welfare, they are more likely to be vocal about your positive work culture and empathetic approach to doing business. 

Health insurance for employees is so much more than just medical relief.

By actively participating and contributing towards preserving their physical and mental health through our suggestions, you can bring about a change in the way companies offer health insurance benefits for employees.

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