Benefits of forming a group medical insurance plan

Afraid your employees’ accident or condition will cost your business hundreds of thousands of dollars? Then purchase a group medical insurance plan with standardized benefits so you can rest easy. Here’s how:

Throughout the past year One World Cover’s team of insurance consultants has frequently encountered SME’s, small international schools, and other start-ups across Asia obtaining individual medical cover for their employees. Whilst buying international medical insurance on an individual basis is a reasonable practice for enterprises with fewer than 10 employees, once a company or school grows beyond this size they begin to miss out on the many benefits of forming a group medical insurance plan.

For a quick reference, we have compiled this short list with descriptions on each advantage to be had with a group plan:

Peace of mind for your employees and your business
When covering your employees under an assortment of individual medical insurance plans, it can often become difficult to keep track of which benefits are provided to each member, and therefore you run the risk of an employee not being covered for a serious medical emergency or condition. On the other hand, when implementing a group plan benefits are standardized across ALL employees and ALL employees are covered, so there is no need to worry about a member experiencing an accident or illness and later discovering the condition is not covered, leaving your business with a sizeable medical bill.

Discounts on standard rates
Group insurance plans tend to be less expensive than individual plans owing to the “buying power” of a group. As the size of the group grows, so does the discount. Therefore as you continue to hire employees, the average rate per person can be expected to decrease in future.

Pick and choose your benefits
Individual plans tend to offer standardized rates and benefits, whereas group insurance plans can be tailored according to the specific needs of your group. Reducing certain benefit limits or taking out certain benefits altogether can be a very effective way to save premium.

Improved underwriting
Many insurers offer improved underwriting terms for groups above a certain size. Individual plans will generally include a moratorium or waiting period (typically two years) on the cover of pre-existing conditions, or even exclude these conditions altogether. With a group size of typically 10 or more employees, insurers will offer to underwrite the group under medical history disregarded (MHD) terms, thereby covering your employees’ past medical history, and the HR team will not have to deal with these employee issues throughout the year for these matters.

Single start date for all your employees
Having a single policy start date for all your employees’ medical insurance plans makes things very simple from an administration point-of-view, with a short application and payment process at initial sign-up, the ability to add in or remove individuals from the group, and a smoother renewal process.

Simple application process
Covering employees on an individual basis can be a lengthy and labor-intensive process for HR departments, as new applications and payments must be completed as each new individual employee is hired. Under a group plan, the initial application will be much simpler and can be sorted through email with the assistance of the One World Cover Client Services Team. Our ultimate goal is to take away the day-to-day administrative headaches from you and operate a group program as smoothly as possible.

Simple payment process
As with the application process, the payment process is also far simpler when under a group medical insurance plan. Rather than having to make separate payments for individual employees as they are hired, one lump sum payment can be made by bank transfer for the entire group upon sign-up.

Short-term cancellation rates
Individual medical insurance plans are annual contracts, and often the company is penalized with fees when canceling members throughout the years. On the contrary, group medical insurance plans do not penalize the company for cancellations, meaning HR can add in and remove employees throughout the year and only pay the pro-rated premium for the period of time the employee was actually insured under the plan.

To add in or remove an employee from a group underwritten with medical history disregarded (MHD) terms, all that is required is 30 seconds of your time to send an email to the One World Cover Client Services Team providing the individual’s name, gender, date of birth, and requested start/cancellation date. We will then get in touch with the insurer on your behalf and handle the entire process from there. As the medical history is covered for each member, there is no need for the employee to complete lengthy application materials and health questionnaires; HR handles the entire process with a simple 30-second email.

Annual or quarterly reconciliations
One of the many services offered by One World Cover includes working with insurers to provide annual or quarterly reconciliation of group premiums. This ensures the group medical insurance program runs smoothly throughout the policy year, as we keep an eye on the group’s claims experience to re-evaluate the plan design and prevent high premium increases, as well as confirm those members joining or leaving the group plan.

CFO budgeting
A group plan also makes it much easier for the CFO to budget each year. As opposed to having varying payments throughout the year to keep track for each employee, a group plan can have a set renewal/payment date each year, and therefore budget for employee benefits on an annual basis.

Large groups buy as large groups, not individually
Finally, it is very uncommon for large companies and international schools to purchase medical cover on an individual basis for employees. Whilst doing so is typically easy to manage with 10 or fewer members, once the staff grows beyond this size it becomes an administrative nightmare.

For more information on how to form a group medical insurance plan for your company or school, please visit One World Cover’s Services webpage, or directly contact us to discuss further with one of our expert insurance consultants.