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Maximizing Benefits of Individual & Employer Health Insurance Plans

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Knowing how to put both your individual health insurance and health insurance benefits from your workplace into play is very important in protecting your health. You may ask why both. Well, your individual health insurance package gives you personal coverage, while your employer’s health insurance benefits may offer fringe benefits with their limitations. For instance, your employer's scheme may not cover your entire family, or it may be valid for the period of work only. You will be fully protected if you have both. For example, if somewhere down the line your employer's health insurance fails to serve your purpose fully in case of a medical emergency, individual health insurance will save you from many hassles. Knowing the pros and cons of the employer's health insurance is the way to enjoy maximum benefits.

Individual health insurance vs Employer's Health insurance

It's good to know the pros and cons of having individual health insurance versus your employers health insurance benefits when deciding how to protect yourself and your family. Let's break it down for you.

Pros & cons of individual health insurance:

Pros

• Customisable coverage

You can choose a plan that best suits your needs regarding higher coverage or adding family members. You are not bound by the limitations of what an employer offers.

• Larger Network of Hospitals

You frequently get access to an extended network of hospitals and doctors. This gives you a wider choice of healthcare providers.

• Portability

Your individual health insurance goes with you, no matter where you work. This is especially useful if you switch jobs frequently.

Cons

• Cost

This form of health insurance is more expensive compared to employer’s coverage since you are required to pay the full premium.

• Research

You do have to do a little homework to find exactly the right plan that fits your needs, and this does take some time.

Pros & cons of employer’s health insurance plan

Pros

• Lower or No Premiums

The cost is often borne partially or fully by your employer, thereby saving you money.

• Convenience

You don't need to shop around because your employer has your health insurance benefits ready as soon as you start the job.

• Group Coverage

Many employers provide the facility of group health insurance with coverage for pre-existing conditions; there is no need to wait.

Cons

• Limited Coverage

Such schemes may not take care of the entire family or have limitations upon personalisation.

• Employment-Tied

Should you leave the job, the benefits of a health insurance package provided by your employer end, which could put you in a somewhat precarious situation during job transitions.

• Limited network

You are sometimes limited to a certain network of hospitals, and that can be a hassle.

How Can You Coordinate Between Both Plans?

Your employer's plan is likely to be cheaper or maybe even free, but there may be limits. Individual health insurance provides flexibility and stability in current job situations. Together the two allow you to fill a gap which either one of the plans alone might have left open.

1. Be aware of what each plan covers

Your employer’s health insurance benefits, for example, might cover hospitalisation but have limits on outpatient services or pre-existing conditions. On its part, individual health insurance allows the design of a plan that picks up where the employer leaves off. You can then use one plan to pick up what the other doesn't, so all bases are covered.

2. Use Individual Health Insurance for Specific Needs

The individual health insurance policy excels when the needs are specific. For example, if you have certain specified health needs, such as maternity coverage, critical illness coverage, or coverage of elderly parents, then you can get it added to a particular individual plan. This would be very helpful in case the options are not available under the health insurance benefits of your employer. Moreover, if you have a big family, then this scheme provided by your employer might not be sufficient for everyone; here your private health insurance can help you out.

3. First Priority to Employer's Health insurance

The benefits of your employer's health insurance are usually free or heavily subsidised; hence, use this as your primary plan. For example, in case of hospitalisation of yours or any family member, file the claim in the first place under your employer's health insurance. This helps you save on out-of-pocket expenses. However, in case the amount of the claim exceeds the coverage limit, you may fall back upon the individual health insurance to bear the remaining amount.

4. Avoid Overlapping Coverage

While it is good to have adequate coverage, it is pointless to pay double for the same kind of coverage. If you already have outpatient benefits from your employer's plan, you wouldn't need to include this in your individual health insurance. Instead, focus on areas that the employer's plan does not cover, such as a higher sum insured or including family members not covered under the employer's plan.

5. Annual Health Checkups

Some individual insurance plans allow for free yearly checkups, which you can take advantage of, even if you are mostly covered by your employer's insurance. This will keep you updated with your health, and you won't have to depend on your employer's plan, which might not have such benefits.

6. Claim Settlement Strategy

In case of a large medical expense, one can always claim first from the health insurance benefits provided by the employer, which more often than not, results in a much easier process because most employers are tied up with hospital networks. If these costs are more than what the employer is willing to cover, you can then fall back on your individual health insurance to pay for the remaining amount. This way, you will be fully reimbursed and won't bear any financial burden.

Benefits of Using the Two Health Policies Together

1. Higher Sum Insured

Pooling in between the two plans provides wider coverage. For example, if the health insurance sum insured of your employer-based benefits is ₹3 lakh, and the sum insured of your individual health insurance is ₹5 lakh, in a way, you would get to ₹8 lacks insurance coverage.

2. Choice of Healthcare Providers

More often than not, employers are usually tied up with certain hospitals, which again brings down your choices. In the case of an individual health insurance plan, you are free to choose the hospitals or doctors you want to consult and do not have to worry about restrictions in the network.

3. Peace of Mind When You Change Jobs

The disadvantage of employer-sponsored health insurance benefits is that you lose the coverage once you leave the job. Having individual health insurance ensures that you have continuing protection regardless of your status in your job.

4. Tax Savings

The premium you pay toward individual health insurance is eligible for deductions while paying income tax according to Section 80D of the Income Tax Act. By continuing an individual plan apart from the employer's coverage for sufficient health protection, you will continue to get a reduction in your taxable income.

Conclusion

The key is to balance individual health insurance with your employer's health insurance benefits, understanding what to use and when. First, determine what each of these plans provides, and then you should prioritise the use of your employer’s health insurance benefits over your individual health insurance where costs can be saved. There, you will have a firm, flexible strategy that will shift along with life's changing needs for health insurance. So the next time you are looking over your options in health insurance, think about how you can mix and match the best parts of individual and employer-sponsored plans to have it both ways.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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