Payment of medical insurance premium for an ex-employee
Nilanjana Adhya
Employee Health Insurance is a type of group health insurance policy that is provided to employees or members of a company or organization. The employer generally pays the entire premium of the insurance in order to provide health insurance as an employee benefit. Employee health insurance plans may also cover an employee's family members such as parents, spouse or dependent children.
Group health insurance policy differs from Individual health insurance policy. In an employee health insurance plan, the policy is issued in the name of the master policyholder or the employee, and the master policyholder controls entry and exit from the group. Individual members of the group are given an insurance certificate. Whereas in individual health insurance policies, the policy bond is issued to the proposer of the insurance. Only the policyholder has the authority to cancel or discontinue the policy.
In group insurance, a group can be can be of two types:
Employer- employee groups: Employees of any registered company or organization may be included in this group.
Non-employer- employee groups: Members of registered welfare associations, holders of credit cards issued by a specific company/bank, and customers of a specific business where insurance is offered as an added benefit are examples of non employer employee groups.
Classification of employee health Insurance Plans:
Employee group health insurance can be further classified into two types: non-contributory and contributory.
Non-contributory: The group members or employees do not have to pay any premium to receive the policy benefits under this type of group health insurance plan. A non-contributory group insurance plan is one in which the employer pays the entire premium for the employee's insurance coverage.
Contributory: In this type of group insurance plan, the group members pay the premium (in part or full) in order to receive the benefits of the insurance cover. Some employers, for example, may deduct a percentage of the insurance premium from an employee's salary.
Most employee health insurance plans limit the validity of a group health insurance policy for an employee till the employee is working with the organization. As soon as the employer-employee relationship ceases to exist, the coverage of health insurance also ceases. Generally the employee group health insurance plans offered by various insurers don't cover retired, terminated or ex-employee of the company. An employee can't include retired employees under these policies unless the specific policy allows such inclusion. Such terms and conditions can be found in the "Policy Wording" of that particular insurance.
To cover ex-employees or retired employees, the employer has to opt for separate group health insurance plans which don't have such employer- employee relationship clauses. If an employer includes a retired employee under an employee group health insurance scheme where the 'employer-employee' relationship clause is there, the insurance company can deny the claim of that person on such eligibility grounds.
Due to this reason,the insurance companies generally offer the employee an option of switching to an individual health insurance plan in order to continue receiving health insurance benefits. Any retired, ex-employee or terminated employee can switch to an individual health insurance plan to get uninterrupted benefits of the health insurance. To begin the conversion process, policyholders must first notify their current group insurance company, and in the event of job loss, the policyholder must contact the company's admin or HR department to get more information regarding the porting process.
Employees who want to switch from a group health insurance plan to an individual health insurance policy should apply 30 days before their last day of work. According to the rules, the insured employee must notify the insurer before leaving the company. The entire conversation process must be completed within 5 days of the date of group policy termination, and the insurance company must issue a new retail health plan to cover the policy coverage amount upon payment in full for the new individual health plan.
Though, the employees in some other countries, such as in the United States, can continue to receive health insurance benefits after leaving the company. The Consolidated Omnibus Budget Reconciliation Act, or COBRA, allows employees to continue coverage even after the end of an employer-employee relationship, typically up to 18 months.
References:
https://taxguru.in/finance/employee-may-continue-his-mediclaim-policy-after-change-of-job.html
https://taxguru.in/corporate-law/option-opt-group-inusurance-policy.html
https://www.starhealth.in/group-health-insurance
https://www.adityabirlacapital.com/healthinsurance/assets/PDF/20180824T115514.pdf
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Nilanjana Adhya
PRACTICING IN VARIOUS FIELDS OF LAW OVER 12 YEARS IN KOLKATA AND OUTSIDE BEFORE VARIOUS HIGH COURTS, THE SUPREME COURT , TRIBUNALS AND SUB-ORDINATE COURTS. EXPERIENCE IN ARBITRATION AND CONNECTED PROCEEDINGS, SUITS AND CONNECTED PROCEEDINGS, WRITS, APPEALS , REVISIONS, CONSUMER DISPUTES, PROPERTY DISPUTES, LAND DISPUTES, CONSTRUCTION AND WORKS CONTRACT DISPUTES, SERVICE AND LABOUR DISPUTES, ALTERNATE DISPUTE RESOLUTIONS, DOMESTICE AND INTERNATIONAL ARBITRATION ETC
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