Importance of Health Insurance for Employees

Importance of Health Insurance for Employees

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Employee health insurance is increasingly becoming a valuable employment perk among the current workforces. Employer-sponsored health insurance offers numerous employee benefits and can be an essential talent attraction and retention tool for a business. Comprehensive health benefits can create an employer brand by demonstrating the organization's commitment to employee well-being. In addition, employers can increase employee satisfaction, boost productivity, and reduce absenteeism among employees by providing them with comprehensive health insurance. Employees are more likely to stay with a company that offers valuable insurance benefits, as it can be far more costly to get such health coverage individually.

Employer-sponsored health insurance helps employees with the convenience of saving time and effort in searching for private or government-sponsored health insurance. Additionally, employee health insurance can save employees a considerable amount of money yearly on periodic health check-ups and well-being programs. A sizable portion of medical costs paid through an employer's health insurance can provide employees comfort and security from any potential financial damage caused by any significant injury or illness.

What is included in employee health insurance?

Following are some generic coverages that are included in employee health insurance:

Inpatient services

Essentially, inpatient services include medical treatments and procedures that require hospitalization or an overnight stay in a healthcare facility. Inpatient services like hospitalization charges, as well as expenses related to ambulances, diagnostic X-rays, and Laboratory tests, can be costly, and having them covered by employee health insurance can provide employees with financial security and peace of mind in case of an unexpected illness or injury requiring hospitalization. Coverage for accidents, surgeries, maternity services, and intensive care are also included in the inpatient services of employee health plans.

Outpatient Services

Outpatient services refer to medical treatments and procedures that do not require hospitalization or an overnight stay in a healthcare facility. While outpatient services like clinical assessments, medical investigation costs, prescribed medications, wellness programs, daycare, and minor surgeries are less expensive than inpatient services, they can still be costly. Appropriate employee health insurance can save employees from causing a burn in their pocket. Outpatient services also cover medical benefits like appointments with general practitioners, specialists, and consultants, as well as maternity services and vaccinations.

Major Inclusions

Employee health insurance plans typically cover essential and significant medical expenses. These include hospital fees, such as ICU and hospital bed fares, and fees for consultants, anesthetists, and surgeons. Prescription drugs may also be covered, particularly those used in the first line of therapy. Employee health insurance plans may also cover expensive daycare procedures like dialysis, chemotherapy, and surgical intervention. Overall, these inclusions are designed to provide employees with access to necessary medical care while also helping to mitigate the financial burden of such care.

Benefits of providing health insurance for employees

Following are some of the benefits of providing health insurance to employees:

Build a positive Employer Brand

Employees often consider a comprehensive employee health insurance plan an added advantage. It can make them feel valued and cared for by their employer rather than just being viewed as a resource. Such a plan can foster the employers' image as a people-first company culture that benefits both employers and employees, making it a critical factor in creating a positive workplace environment.

Comply with the country's labor standards

Every country has specific labor laws that a business must abide by to comply with. In the Emirate of Abu Dhabi, for instance, law No. (23) of 2005 issued by Health Insurance Implementing Regulation specifies that employers provide health insurance coverage to their employees and their families. This law is mandatory and must be followed by businesses operating within the Emirate to comply with the country's labor laws.

Basic health coverage

Employee health insurance plans provide employees with basic health coverage, which can prove helpful in emergency hospitalization. Basic health coverage can provide them with the necessary financial support and ensure they receive the required medical care in time.

Cashless medical treatment

Employee Health Insurance providers often have an extensive network of top-tier hospitals that offer specialized and cashless treatment in times of emergency. Hence, if an employee covered under this policy requires hospitalization, they can receive treatment at one of these top-tier hospitals without burning a hole in the pocket.

Hiring and retention

An employee health insurance policy is an additional checkbox the current workforce considers while choosing an organization. It has become customary for people-focused companies to provide employee health insurance as a standard benefit. Although the availability of this benefit may not be the primary reason for an employee to join or remain with a company long-term, it can certainly be a contributing factor in talent attraction and retention efforts on the part of an organization.

Factors to consider while choosing medical insurance for employees

Following are the few factors that must be considered while providing health insurance to employees:

Understanding Requirements of Employees

The coverage offered in an employee health insurance plan depends on the organization's size and the employee's age group. Insurance coverage should be tailored to the needs of employees, such as personal accident covers for young employees who travel frequently or maternity benefits for married employees. Senior employees may require critical illness coverage.

Claim Settlement Ratio

The claim settlement ratio is basically the number of settled claims divided by the total claims received in a year. A ratio with a higher score is considered good and increases the likelihood of claim approval. It is also essential to check the insurer's claim settlement process for efficiency and ease of use to ensure employees have a smooth experience during claims.

Network Hospitals

Health insurance policies provide a list of network hospitals where policyholders can receive cashless treatment. This means patients do not have to pay for treatment or wait for reimbursement. Employers need to ensure that good hospitals in the city are on the insurer's list of network hospitals to ensure their employees receive the best medical care without financial stress.

Wellness Benefits

Insurers offer proactive health insurance policies focusing on mental health and well-being due to increased awareness during the pandemic. These policies provide more than just financial assistance during hospitalization, but also encourage a healthy lifestyle to prevent hospitalization. Benefits include free health check-ups, discounts on labs, gym subscriptions, consultation with a dietitian, discounts on medicines, teleconsultation for mental health, etc.

Waiting Periods

Wait periods in health insurance are the timeline the policyholder has to wait to claim specific treatments. Waiting periods fall into three categories: initial waiting period, specific disease waiting period, and pre-existing disease waiting period. In a corporate health insurance policy, it's possible to waive these waiting periods by paying an extra premium.

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