Should You Include Parents in Your Employees’ Group Health Insurance Policy
Employee health insurance, also known as ‘corporate health insurance’ happens to be one of the perks that some companies or employers offer their employees in order to attract and retain the best talent for the organization. It consists of health insurance for the employee and in some cases, for their family as well. The premium may be paid entirely by the employer/company or may require employee contribution as well. If you are a company or business owner offering your employees such perquisites as part of the pay package, you have to ask whether it is a good idea to include parents in the employer health insurance plan you are offering. Given the fact that health insurance for senior citizens can be burdensome, we look at the pros and cons of covering the health of the parents of employees as well.
Pros of Including parents in employer health insurance plan
A company or employer who offers health insurance to their employees is an attractive proposition for these reasons:
- It helps to attract talented, able candidates for the job. This also helps retain valuable talent within the organization making the employee less likely to seek greener pastures in the form of alternative employment.
- Typically, valuable experienced employees would be of an age when they have to undertake some of the financial responsibility of aging parents; possibly with significant medical expenses. A company that offers health insurance plans for family which also include aging parents, is an attractive proposition; making the employee feel secure and that much more likely to remain loyal and beholden to the organization.
- Some group policies offer pre-existing disease cover and critical illness insurance as well- opting for these makes it doubly attractive for employees with elderly parents.
- Health insurance for parents offered by the employer also creates the reputation of a caring, generous organization that is engaged with, and concerned about employee welfare. This serves to enhance the image of the company.
- Employees who already have personal health insurance would value additional coverage from their employer.
Why including parents in employer health insurance plans is not recommended?
While including parents in employer health insurance plans seems desirable in theory, there are some practical aspects, which should be considered:
- The health insurance premiums are calculated based on the average age of the pool of insured people. Including parents in the employee health plan increases the average age and hence make premiums rise as well. This could make premiums so expensive as to make them unaffordable for the company. In some cases, this could mean reduced or no coverage for some employees of the company.
- By a certain stage in one’s career, an employee would already have invested in suitable health insurance plans for family and therefore, they would be unlikely to view additional insurance as being much of an incentive.
- The fact that a health policy offers tax benefits to the policy holder is another reason that many employees would have bought their own policies or why they prefer to buy a personal policy rather than opt for employee health insurance schemes that their employer offers.
- Many types of group policies may not be comprehensive in nature and may not offer coverage for pre-existing diseases or critical illnesses. In such a scenario, the employer health policy might become meaningless for an employee with elderly parents who are very likely to develop acute or chronic conditions or age-related ailments.
- Inclusion of parents in employer health insurance plan also means more frequent claims because of a higher likelihood of older people incurring medical expenses or needing hospitalization.
Companies can make the final decision after considering the pros and cons of including parents in an employer group health insurance policy and also factoring in other aspects such as budgetary allocations to make the choice that is best for them and their employees.