Health

Group Health Insurance: Learn Terminologies & Definitions

Group health insurance is a kind of insurance that covers a group of people, usually employees of an organization, under a single policy. Group health insurance policies cover various medical expenses, such as hospitalization, surgery, maternity, dental, vision, etc. Group health insurance policies may also provide additional benefits, such as wellness programs, preventive care, employee assistance programs, etc.

Group health insurance policies are usually cheaper than individual policies, as the risk is spread across a large number of people. However, group health insurance policy may also have some limitations, such as exclusions, waiting periods, sub-limits, co-payments, etc. Therefore, it is crucial to understand the terms and terminologies associated with group health insurance before buying or renewing a policy.

Here are some common group health insurance glossary terms and their explanations:

– Premium: The premium is the amount paid to the insurance company by the employer or employee to maintain coverage for the group. This payment is typically made monthly, quarterly, or annually.

– Deductible: The amount of money the group members have to pay out of their own pocket before the insurance firm starts paying for their medical expenses. For example, if your group health insurance plan has a deductible of INR 10,000 per year, you have to pay INR 10,000 for your medical bills before your insurance kicks in.

– Co-payment: The fixed amount of money the group members must pay every time they use a medical service or buy a prescription drug. For example, if your group health insurance plan has a co-payment of INR 500 for a doctor’s visit, you have to pay INR 500 every time you see a doctor, regardless of the total cost of the visit.

– Co-insurance: The percentage of the medical expenses the group members have to pay after meeting their deductible. For example, if your group health insurance plan has a co-insurance of 20%, you have to pay 20% of your medical bills after you have paid your deductible, and the insurance company pays the remaining 80%.

– Out-of-pocket maximum: The maximum amount the group members have to pay for their medical expenses in a year. Once reached, the insurer covers 100% for the rest of the year. Example: With an INR 50,000 limit, you won’t pay more than that in a year.

– Pre-existing condition: A medical condition that a group member had before joining the group health insurance plan. Some group health insurance plans may exclude or limit coverage for pre-existing conditions for a certain period, such as six months or one year.

– Waiting period: The time that a group member has to wait before they can start using their group health insurance benefits. For example, suppose your group health insurance plan has a waiting period of three months for maternity care. In that case, you may only be able to claim benefits for your pregnancy-related expenses after three months of your membership.

– Network: The list of doctors, hospitals, clinics, pharmacies, and other providers that are contracted with the insurance company to provide services to the members of the group at discounted rates.

– Claim: The request that a member of the group or a provider makes to the insurance company to get reimbursed for their medical expenses. The claim process may vary depending on whether the provider is in-network or out-of-network and whether the member has paid upfront or not. For example, If you see a doctor in your insurance network, you may just pay your co-payment, and they handle the claim. If you go out of network, you might pay the total amount upfront and submit the claim for reimbursement.

– Claim Settlement Ratio: A claim settlement ratio is a ratio that measures how efficiently and effectively a group health plan pays its claims. It is calculated by dividing the no. of claims settled by the no. of claims received in a given period. For Example, In 2024-25, ABC Inc.’s group health plan received 10,000 claims and settled 9,500 claims within 30 days. The claim settlement ratio for this period was 95%, which means that 95% of the claims were paid within the stipulated time frame.

– Cumulative Bonus: A cumulative bonus is an incentive a group health plan offers its beneficiaries for not making any claims during a policy year. A cumulative bonus may be an increase in the sum insured or a reduction in the premium for the next policy year.

– Coverage Period: A coverage period is the duration for which a group health plan provides coverage to its beneficiaries. For Example, ABC Inc.’s group health plan has an annual coverage period that starts on January 1 & ends on December 31 of each year. Rahul enrolled in ABC Inc.’s group health plan on March 1, 2024. His coverage lasts until December 31, 2024.

– Exclusions: Exclusions are the conditions or situations not covered by the group health insurance policy. The policyholder cannot claim any medical expenses arising due to these exclusions. Some standard exclusions are pre-existing diseases, cosmetic surgery, dental treatment, etc.

-Sub-limit: A sub-limit is the maximum amount the insurance firm will pay for a specific type of expense under the policy. For example, the policy may have a sub-limit on room rent, which means that the insurer will only cover the room rent up to a specific limit per day. If the room rent exceeds the sub-limit, the employee must pay the difference from their pocket.

Conclusion

We hope this glossary has helped you comprehend some key terms related to group health insurance. If you are an employer or an employee looking for group health insurance, you should compare different plans & options to find the best fit for your needs and budget. You can choose CarePal Secure Insurance for your medical needs as they provide comprehensive coverage, financial security, access to quality care, & affordable premiums.