When Amit Sharma approached his employer for reimbursement of medical expenses incurred for his 55-year-old mother’s hysterectomy operation, he was shocked to find that his company had stopped offering insurance cover for parents.
India Inc is increasingly shying away from providing health insurance for employees’ parents.
According to survey by Marsh Insurance brokers, while 60 per cent of the corporates were providing employer-sponsored cover for parents of employees in 2009, this number was down to 36 per cent in 2012.
Faced with a rising outgo on account of higher health insurance premiums, many companies are either withdrawing health cover for parents or making it voluntary for the employee to pay separately for parental cover in group mediclaim policies.
The main advantage for policyholders under group mediclaim is that pre-existing diseases are covered from day one, unlike individual health insurance policies, which have a waiting period of up to 4 years. However, for insurers, the selective cover for parents has made it a loss-making proposition, with claim ratios exceeding 140 per cent.
Segar Sampathkumar, General Manager of New India Assurance, which has the largest health insurance portfolio, said: “Since 2011, we have seen that most companies have made parental cover optional for employees. Since it is optional, only those who feel their parents are really vulnerable tend to insure — making it unviable.”
As claims mount, insurers insist on introducing various clauses, such as minimum threshold level or offering only a one-time option as part of the medical insurance scheme for parents. Some corporates have introduced a minimum period that the employee has to stay with the company to avail himself/herself of parental health cover.
“Group health insurance policies are tailor-made for companies and we can cover only what the firms are willing to pay for,” said V. Jagannathan, Chairman and Managing Director of Star Health Insurance.
Many companies have also launched standalone health insurance cover with a co-payment model for senior citizens with entry age above 65 years.