Employee Benefits Insurance Plan

Following the COVID-19 outbreak, the Indian government mandated that all companies provide medical insurance to their employees. Companies have also grown more aggressive in providing financial assistance to their employees in the event of medical emergencies, accidental injuries, or other similar emergencies.

Employees are, without a doubt, the company’s most precious resource, thus ensuring and protecting their financial and legal duties in the event of terrible and unforeseen circumstances is one of the top considerations.

What Is The Meaning of Employee Benefits Insurance Plan?

Many insurance companies in India offer comprehensive employee benefit insurance programs designed primarily to safeguard employees.

An employee benefits insurance plan is a type of insurance that is provided by an employer to its employees. It provides health and life insurance to its employees in the event of medical or other unexpected situations. Such programs not only assist employees in bad situations, but also assist companies in retaining current employees and attracting new employees to their particular organizations.

Furthermore, these insurance plans assist both employees and their families, including dependent children, parents, parent-in-laws, and spouses. Employees receive coverage for accidental death and disability, medical crises and hospitalization expenses, retirement, and

How Does Employee Benefits Insurance Work?

Employee benefit insurance functions similarly to any other individual health insurance coverage. The only difference here is that the master policyholder is your employer, who provides health insurance policy benefits to you and your coworkers with the sole purpose of providing financial assistance to you and your team in the event of a medical issue. The employer pays the premium for each covered member under this policy, hence it functions as an employee benefit insurance program provided by a specific company to their group of employees.

The basic master contract for any employee benefit insurance is in the custody of the policy buyer, which could be an employer or an entity such as an association or trust. However, policyholders, such as employees, are issued coverage certificates.

Benefits insurance schemes vary by company; nevertheless, they typically include coverage for health or life insurance, life and disability insurance, and retirement savings plan benefits. Thus, before developing an effective and efficient employee benefits insurance plan, employers must assess which employee benefits suit both employee needs and the employer’s objectives.

Type of Employee Benefits Insurance Policy

There are broadly three kinds of employee benefits insurance schemes which are offered by any insurance company, such as:

• Group Health Insurance: A group health insurance scheme is a master policy that provides complete health coverage to all members of a company establishment under one contract. Employees and their families are also covered under this policy. Such plans offer comparable insurance coverage and benefits to all members of a group, regardless of job experience, role, age, or gender. This type of policy includes medical benefits such as hospitalization expenditures, maternity coverage, daycare treatment coverage, critical health insurance, global treatment costs, and ambulance coverage, among others.
• Group Life Insurance: A group life insurance policy provides life coverage protection to a group of employees covered under a master contract policy. Employees are eligible for coverage without having to go through any pre-medical checkups or other onerous procedures. It is a standard employee benefit that provides financial support to the insured’s nominee in the event that they die while working for the company.
• Group Personal Accident: This plan provides financial protection for policyholders and their families in the event of an unexpected injury or death. This type of policy is typically provided by businesses or industrial institutions as accident insurance coverage for its employees, workers, and members.

Inclusions of Employee Benefit Scheme:

• Medical Insurance
• Dental Insurance
• Vision Insurance
• Cancer Insurance
• Critical Health Insurance
• Life Insurance
• Accidental Death Insurance
• Accidental Disability Insurance
• Retirement Plan
• Gratuity
• Pension Fund

Benefits of Employee Benefits Insurance Policy

• Low or No-Cost Insurance Plans: The premiums of an employee benefit insurance plan are generally very lower as compared to private to individual insurance policies. Most of the time, the premium of such plans is absorbed by the employers. Only in a few cases, it is shared by the employees.
• Covers Legal Liabilities: The employee benefits insurance plans are the easiest way which helps you to cover all sorts of legal liabilities arising out of any unforeseen event. It helps your family members even if something happens to you while being a part of the company.
• Provides Annuity: Certain employee benefits schemes also provide the avenues for long-term savings and income which can be realized at the time of retirement as pension income.
• Fulfill Long-Term Financial Goals: The employee benefits insurance policies also help members with financial protection in terms of achieving long-term financial goals such as children’s education, their marriage or retirement planning.
• Accident Coverage: The employee benefit scheme offers protection against any accidental injuries, death or disabilities. Here, the nominated family member also receives the compensation, if the policyholder dies within the policy tenure and while being the part of the same organization.
• Tax Benefits: An employee having an employee benefit insurance policy will always receive tax advantage under the Section 80C of Income Tax Act, 1961, for the premiums paid by them. Not just the employees, the employers also receive heavy taxation benefits as the employer can show a premium amount as the business expense to receive tax benefits.
• Receive Cashless benefits: An insured employee can always avail cashless services at any of the networked hospitals, which act as a boon in case of any medical emergencies. Here, the policyholder is not required to pay anything upfront to the hospital, rather the claims would be directly settled between the insurance company and the networked hospital.

Eligibility Criteria For An Employee Benefits Insurance Policy

We have listed out the basic eligibility criteria for an employee insurance policy, as it differs from one insurance provider to another. Here are few basic criteria:

• A company, corporation, partnership firms, and private and public companies can provide such schemes to their employees.
• An employer should minimum have twenty salaried employees registered under them. However, the criteria for the minimum number of employees or members can be different for different insurance companies.
• An employer and employee should have a salaried relationship which should be well-reflected in the books of accounts.
• Sole proprietors, family business and part-time employees do not qualify for an employee benefits insurance plan.

Conclusion

If you are an active member of an organization or association, an employee benefits insurance policy is a must-have, since it can be advantageous in a variety of ways. It provides health and life insurance with a low contribution. Thus, it is always wise to adopt such insurance schemes offered by companies after conducting extensive study on all terms and circumstances.

FAQs

Will my employer reimburse me for the employee benefits insurance policy?

Yes, an employer can also pay or reimburse for the premium of the employee benefits insurance scheme, if it is mentioned in the terms and conditions of the policy.

Will I be able to cover my spouse and children in employee benefits insurance policy?

Yes, absolutely. The policy coverage can be extended to your immediate family, if mentioned as a nominee in the policy contract.

Does the employee benefit scheme provide coverage on the basis of employee’s performance or any particular rank?

No. This is not true at all. The benefits of this scheme are not restricted to specific performance of the employee or for any particular group or team.

Can an employee customize their insurance policy as per their needs and requirements?

Yes, an employee can customize their employee benefits policy and can increase or decrease the coverage benefits as per their needs.

Can I extend my employee benefit insurance policy benefits if I leave the company?

Yes, an employee can customize their employee benefits policy and can increase or decrease the coverage benefits as per their needs.