Group Health Insurance in the age of Covid-19

With new cases of Covid-19 cropping up in Hong Kong and elsewhere around the world businesses are facing scenarios where they may be going without critical members of staff. The financial impact of the virus cannot be underestimated, and people all around the world are scared.

In the face of mass layoffs and swelling uncertainty about life after Covid-19, many workers (even those who have been laid off) are re-assessing the things that matter to them in their employment; from the ability to work remotely, to their pay and, increasingly, health insurance. Workers want the security of knowing that should they contract the Covid-19 Coronavirus they will have the ability and financial support to receive the care they need.

On the flip side of this, companies offering health insurance have healthier and more productive workforces – a secure employee is a happy employee. Experiencing one of the worst global healthcare crises in over 100 years is challenging, and many companies are struggling with the financial complications caused by the pandemic. Offering basic healthcare protection to employees can be a vital tool in attracting new talent to help you overcome the obstacles presented by the Coronavirus, and its exitance is often essential in retaining the key staff members you do have.

Who can purchase group health insurance?

Group health insurance plans are typically available to groups consisting of 5 of more unrelated members (although there are exceptions to this). Under this definition almost any group with the requisite number of members would qualify to purchase a group health insurance policy.

Sports teams, social clubs, business organizations (like a chamber of commerce or union), charity groups, and companies are all great groups to be covered under a group health insurance plan.

Depending on the insurer you choose to work with a group plan can actually have less than 5 members, but generally most group medical insurance products start at 5 members. Members cannot be related except if the relations are legitimate members of the group. A son working as a legitimate employee at his father’s business would be a good example of this exception.

Group health insurance plans can be purchased by any group which meets these criteria, and can be obtained by any group anywhere in the world. For the purposes of the rest of this article we are going to focus on group health insurance plans obtained by companies in Hong Kong.

Customizing cover for the business

One of the unique aspects of a group health insurance plan over an individual or family health insurance policy, is the fact that there are extended customization and tailoring benefits.

Under a company health insurance plan the business can actually tailor the policy with specific levels of coverage for different classes of employees. For example, C-suite executives have the ability to receive extremely comprehensive healthcare protection under a corporate health insurance policy while junior employees receive more streamlined, basic cover.

This allows a business to control the costs of their benefits offering, while still ensuring that employees are receiving the perks that matter to them.

Outside of creating coverage tiers in the plan, companies often have a wider range of choice with regards to the options that they are able to include in their health insurance versus individual policyholders.

Full Medical Underwriting vs Medical History Disregarded

Most health insurance plans that an individual would purchase are designed with Full Medical Underwriting in mind. This means that when applying for the policy, a person would normally provide a full medical history to the insurer, which will then be used as the basis for calculating the policy premium.

Under a health insurance policy with Full Medical Underwriting any pre-existing medical conditions (conditions which may have displayed symptoms, required treatment, or of which the policyholder was aware prior to the commencement of the policy) will normally be excluded from coverage under the plan. Yes, there may be the possibility of covering excluded treatments under the policy but this normally comes with a much higher overall cost for the coverage, or with extended waiting periods before the condition is eligible for coverage (known as a moratorium).

While this is the normal way of underwriting individuals and families, groups have the option to have their health insurance policy underwritten on the basis of Medical History Disregarded (also known as MHD). In order to receive MHD coverage most insurers will require 5 or more members within the group. But once the coverage is offered on an MHD basis, then any pre-existing conditions present within the group prior to the policy commencement will be covered under the plan.

Medical History Disregarded ignores the issue of pre-existing medical conditions and assumes that the group health insurance plan starts as if no one in the group had any medical history. This means that even conditions like maternity can be covered under the plan immediately (if such coverage has been included in the policy) because the medical history of the individual members is ignored.

Group health insurance plans offered on a Medical History Disregarded basis are normally more expensive than policies which are have Full Medical Underwriting. However, the utility for employees is much greater as they do not have to worry about exclusions under the plan that would have otherwise been covered.

Considering the policy benefits for your employees

The primary concern for any business even considering a group health insurance policy is going to be the cost of the plan. Although the Covid-19 Coronavirus pandemic has proven the usefulness of high-quality healthcare opting to obtain the most comprehensive policy possible is going to come with an extremely high cost.

Fortunately, businesses have the option to tailor their plan to meet their specific coverage needs, and the needs of their employees. We’ve already discussed creating different tiers of protection for different employee classes, but the actual coverage options on offer are extensive.

Everything starts with inpatient, where you’ll choose what type of room your employees are covered for if they are admitted to hospital. Choosing a ward over a private room can mean significant cost savings, but may mean you have a number of dissatisfied employees. Similarly, when you select your deductible options, or the plan’s geographical area of coverage, you are going to have to balance the benefit to employees against the overall cost.

While an inpatient only policy with a high deductible is extremely cost effective the utility your employees gain out of the plan is minimal. Conversely, opting to include Outpatient treatment, coverage for Traditional Chinese Medicine, and Maternity is going to be more expensive, but your employees are probably going to be far more pleased with the benefits they are being offered.

The coverage options that companies are able to include in their health insurance offering are extensive. However, the challenge is not in providing the best policy possible, but rather in finding the right balance between coverage, cost, and employee security. Ensuring that your staff feel comfortable in knowing that they are able to receive the best care possible should they suffer a serious accident or illness, or (in light of current events) should they contract the Covid-19 Coronavirus that they will be able to rely on the treatment, is of utmost importance.

There are no easy answers as to what the right move for any business is; or even whether purchasing a group health insurance policy is the best plan right now. But protecting workers is the same as protecting the business; they are your biggest assets. With the most recent wave of the Covid-19 coronavirus, the best way to protect your employees is with a comprehensive Group Health Insurance plan.