Employee Health and Flex Benefits

For most of us our earliest experience with Insurance is typically at our first employment, in the form of Group Health Insurance provided by our company. Unfortunately, we aren’t aware of its intricacies unless we go through a claim event.

Entities

Corporate Insurance also called Employee Health & Flex Benefits, is a complex process with multiple entities involved:

• Corporate – the entity which wants to insure its employees.

• Insurance Company – the entity which customizes & underwrites the group policy.

• Insurance Broker – the entity which helps corporates navigate the complex process of benefits & coverages offered by each Insurance company.

• TPA – the entity to which some Insurance companies outsource their claim processing.

• Hospitals – Moment of truth, where you come to know how smoothly above entities coordinated with each other and whether your claim will be approved or rejected.

Secure Data Flow

The starting point of this process is the data submitted by you the employee, to your employer. This data resides in a HR / Payroll system of the organisation. The bigger the organization, the more complicated the process of keeping records, as employees join and resign almost every day. The HR / Payroll system needs to be constantly kept up to date with the Insurance company directly, or via the Insurance broker.

A few years ago, data was primarily exchanged using excel (it still is), however now data security policies mandate that this data should be exchanged in a secure manner using technologies like SFTP, secure Integration with HR / Payroll systems.

Complex Underwriting

The corporate provides employee data but may not always provide dependent data. Also, policy underwriting guidelines differentiate benefits across employees based on grade, employment duration, designation, location etc.

For example – at Grade 1 the corporate may provide the employee, spouse and 2 children with 2 Lakh sum insured, while at Grade 10 it may provide the employee, spouse, 2 children, both parents and parents-in-law with 10 lakh sum insured.

The system which captures the data needs to be equipped to allow only valid data to be enrolled, to prevent rejection of claims at a later stage. Whether the Insurance company receives the data directly from the corporate or via the Insurance broker, the final data must be as per the underwriting guidelines agreed between the corporate & Insurance company in order for claims to be registered.

The underwriting process gets complicated in an organization where; to fulfil the needs of a huge employee base, corporates provide multiple policies over and above the base policy. Such policies are additions of Sum insured to the existing base policy (TOP UP) or are Voluntary policies (e.g. Parental).

FLEX Benefits

Traditionally, based on the benefit category (e.g. employee Grade) the eligibility criteria (which dependents can be covered & how much Sum Insured) was always decided by the HR of the organization. However recently with the advent of Flex Benefits, the employee can decide who they want to cover and with how much Sum Insured, thus customizing the corporate offering for each employee.

For example –

The corporate offers Employee + Spouse + 2 Children cover for 3 Lakhs for INR 6,000/- for Grade 1. If half the employees in Grade 1 are not married, the premium is not justified.

However, if INR 6,000/- is provided in an online wallet during the enrolment period, the employee can enrol self & cover their parents within the same amount, or cover self and use the balance amount for a yearly health checkup plan (non-Insurance option) for their parents. This wallet also allows the option to the employee to topup from other benefits (e.g. leave encashments) to buy additional policies.

Thus, Flex Benefits allows the corporate to provide a vast bouquet of options (insurance or non-insurance) for employees to choose from. Insurance options can be OPD, Maternity benefits, Hospicash, Parental care, PA for spouse, Critical illness cover etc. Non Insurance options can be Wellness, Health check-up packages, GYM memberships etc.

Premium Calculation – CD Account

Below compliance has to be achieved –

• Data security (while accepting, processing & forwarding the data)

• Underwriting compliance (to prevent issues in premium calculations & subsequent claims)

This process gets repeated multiple times a year (also called endorsements) during the policy period, due to constant movement of employees (joining/resigning/mid- year events like promotion, addition in family etc.)

As seen above, the raw data sent by the corporate finally resides in the Insurance company system complying with all underwriting rules for that policy. This final data forms the basis of premium calculation and is maintained in a CD (Corporate Depository) account between the Insurance company and the corporate. This account is the final say on the brokerages/commissions for the intermediaries (Insurance broker, TPA) as well.

With an already complex underwriting and with additional option for Flex Benefits, such a system used by the intermediary and the Insurance company, should also be secure and robust enough to provide a seamless experience to the employees onboarded.

Our Exegesis Employee Ensurer platform for Employee Health and Flex benefits does exactly this, and has been successfully implemented across domestic and international entities for the past 15 years supporting on an annual basis 5000+ corporates, 15 million+ lives and USD 1000 million premium.

Claim processing

The Insurance company or the TPA to whom it has outsourced the claim processing, will provide the Ecard & Network Hospital list for cashless hospitalization. In the event of a planned or unplanned hospitalization, on submission of your ecard you can avail of cashless hospitalization from the list of network hospitals supported. If above mentioned data processing is executed seamlessly within the underwriting framework and shared with respective entities, then your cashless claims should be processed smoothly.

In conclusion, while the insurance provided by the company where you work is good, it is in no way a substitute to having a personal health insurance policy which will always keep you & family covered.

Author: Ratnakar Shetty, Co-Founder and MD, Exegesis Infotech

Disclaimer: The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of IIA and IIA does not assume any responsibility or liability for the same.