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Understanding the Difference between Group Health Insurance & Family Floater

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We all know that a health plan is a must amid the rising price of healthcare facilities and the increasing risk of illnesses and accidents. Still, choosing the right health insurance for family members is not easy given the many options available to a policy buyer. For instance, it’s quite a dilemma to pick between group health insurance and a family floater health insurance plan even if there is a huge difference in terms of eligibility, premium structure, and overall benefits. While one is cost-effective, the other offers the flexibility to choose coverage options and add-ons.

Group Health Insurance vs. Family Floater Insurance

Group Health Insurance and Family Floater differ in many ways such as the following —

1. Meaning:

Group health insurance provides coverage to employees of an organisation while family floater health insurance covers family members under a single plan.

2. The extent of coverage:

Group health insurance covers employees and their dependents. On the other hand, family floater covers immediate family members, such as self, spouse, dependent children, and parents. Some plans cover parents-in-law too.

3. Premium:

The premium of group health insurance is borne by the employer. If an employee wants additional coverage, he/she has to pay the additional premium charges. The insured has to pay the total premium amount for a family floater.

4. Eligibility:

The employee can avail of the benefits of group health insurance till he/she is a part of the organisation. The moment the employee resigns, he/she will no longer be covered by group insurance. Anyone above 18 is eligible to buy a family floater plan for self and family.

5. Tax benefit:

Employees cannot avail of a tax rebate as the employer buys the group health insurance but can claim a tax deduction for any additional charge paid by him/her. In family floater, the policyholder is eligible for a tax deduction for paying the health insurance premium under Section 80D of the Income Tax Act.

6. Claim settlement process:

In group health insurance, the claim is settled by a TPA (third-party administrator) appointed by the insurance company, while in family health insurance, claims are settled by the TPA or insurance company.

7. Exit policy:

An employee will be covered by group health insurance as long as he/she is with the organisation. Coverage will cease after retirement/termination or if the employee decides to resign. In family floater, the policyholder can exit from the policy on reaching a certain age as per the policy terms and conditions, on the death of the insured, or on failing to renew the policy.

Conclusion

Group health insurance covers the employee and his/her dependents till the person is with the company. When the employee leaves the company, he/she will be without any health coverage. It also offers limited coverage. Under such circumstances, having a financial backup, such as individual health insurance or a family floater plan, which will provide a safety net in case of any medical exigency, is essential.

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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