As you are aware that a group health insurance policy provided by an employer to the employees comes with its own share of benefits. Not only is the premium low, such a group cover also has a comprehensive coverage with fewer policy exclusions. The premium is generally borne by the employer while some employers include them as a part of the cost to the company.
A big concern for employees is that on changing jobs, the coverage drops, leaving the employee without any insurance coverage. This is because, in an employer-provided health insurance policy, the employee stands to derive benefits till the time he or she is on the payroll of a company.
PORTING FROM A GROUP POLICY
PLEASE NOTE THAT : good news is that portability from a group cover to an individual cover is allowed and an employee should make sure to do so before bidding adieu to the employer. The biggest advantage of porting from a group policy to an individual policy is the continuity of benefits.
HERE’S HOW CONTINUITY BENEFITS WORKS. There are certain ‘waiting periods’ in a health insurance policy which could be from six months to two years or even up to four years. The insurer is liable to pay for certain expenses only after the expiry of such defined waiting periods in the policy contract. For example, pre-existing diseases are covered in a health insurance policy after the end of 48 months of a continuously renewed policy.
Now, on porting from a group insurance policy, such waiting periods get accounted for and one has to serve a lower or no waiting period in an individual plan. If one does not port and buys a fresh individual policy after leaving group coverage, the waiting periods will have to be served from the beginning. If you are covered under a group health insurance policy provided by your employer, make sure to enjoy the continuity benefit even after leaving your job.
LOOK AT THE RULES
Portability from group insurance to individual health insurance is, however, subject to certain rules.
“Porting from group to individual policy can be done with the same health insurer and not with a different insurer. Also, exclusion of waiting period would apply to same sum assured while for any enhancement of sum assured, it will be subject to normal underwriting.”
SOME PROVISIONS RELATED TO PORTABILITY AND MIGRATION OF INDEMNITY BASED GROUP INSURANCE POLICY PROVIDED BY BANKS;
1. What are the conditions for opting Portability?
a). Portability option shall be exercised at the time of renewal or withdrawal.
b). The policy must be continuous without a break in period.
c). Must apply to the new insurance company for portability at least 45 days prior to the date of renewal.
2. When can a policyholder exercise option of portability and whether any time lines applicable for exercising the above option?
A policyholder can port the policy only at the stage of policy renewal. A policyholder shall apply at least 45 days before the premium renewal date, but not earlier than 60 days from the premium renewal date of his / her existing policy.
3. What are the norms to be followed in case of existing policy when the outcome on acceptance of portability is pending with new insurer?
a). The existing policy shall be allowed to be extended, if requested by the policyholder for a short period of time by accepting a pro-rata premium for such short period.
b). Existing insurer shall not cancel existing policy until such time, a confirmed policy from new insurer is received or there is a specific written request of the insured. For complete information please refer to clause 5 of schedule I of IRDAI (Health Insurance) Regulations, 2016.
4. Can I opt for Higher SI under the policy while exercising the option of portability with the new insurer?
Yes. The policyholder can choose for higher SI at the time of exercising the request for portability with new insurer.
However, the portability benefits will be available only up to the extent of SI and cumulative bonus acquired in previous policies from previous insurer.
5. What happens to my waiting periods and time bound policy exclusions when portability option is exercised?
When the option of portability is exercised in health insurance policy, all the terms and conditions shall be as per the terms and conditions of the new policy. The credits gained in the previous health insurance policy on the waiting period and time bound exclusions are protected.
6. There shall not be any additional charges levied exclusively for availing portability facility.
7. All the members of an indemnity-based group health insurance scheme offered to account holders of a bank are allowed portability for their health insurance coverage.
8. The members of an indemnity-based group health insurance scheme offered to account holders of a bank are allowed porting of their health insurance coverage to another indemnity-based group health insurance scheme offered by a different insurer to the account holders of the same bank.
9. A member of an indemnity-based group health insurance scheme shall exercise the option of portability at the time of renewal of the policy or withdrawal/discontinuation of the policy.
10. A member of a group health insurance policy shall initially migrate to an individual health insurance policy of the same insurer. However, members of an indemnity-based group health insurance policy offered to account holders of a bank are allowed portability of their insurance coverage.
11. A policyholder desirous of migrating his / her policy shall be allowed to apply to the insurance company to migrate the policy along with all members of the family, if any at least 30 days before the premium renewal date of his / her existing policy. An insurer may consider even in less than 30days period.
12. What are the norms of migration of health policies?
1) Every Individual Policyholder ( Including members under the family floater policy ) covered under the indemnity-based health insurance policy shall be provided an option of migration at the explicit option exercised by policyholder:
a). To an individual health insurance policy or a family floater policy or ;
b). To a group health insurance policy, if the member complies with the norms relating to the health insurance coverage under the concerned group insurance policy.
2) Every individual member, including family members covered under an indemnity-based group insurance policy shall be provided an option of migration at the time of exit from group or in the event of modification of group policy ( including revision in the premium rates) or withdrawal of group policy;
a. To an individual health insurance policy or a family floater policy.
13. What benefits can be made applicable on a migrated health insurance policy?
a). The extent of Sum Insured and cumulative bonus (If any), acquired from the previous policies.
b). The Unexpired / residual waiting period not exceeding the applicable waiting period of the previous policy with respect to pre-existing diseases and time bound exclusions shall be made applicable.
14. What are the underwriting conditions for effecting migration ?
a). For Individual health policies, migration shall be allowed without subjecting the policyholder to any underwriting to the extent of sum insured and the benefits available in the previous policy provided the policyholder is covered in previous policy for a continuous period of four (4) years or more without any break in policy.
b). Migration from group policies to Individual policies shall be subject to underwriting.
15. Are there any charges or fees for availing migration facility?
There shall not be any additional charges levied exclusively for availing migration facility.
LET’S CONSIDER -WHAT TO BE DONE AT THE TIME OF LEAVING JOB/RESIGNATION
I) In most organisations, after resigning, the notice period to be severed by the employee is 1-3 months.
II) If you wish to port from group to individual plan, the process needs to start the day you put in your papers.
III) “It is important to inform the group insurance company about the porting process at least 45 days prior to your last date in the company.
IV) Once you have selected the new plan you wish to opt for, you can fill out the required documents with details of the existing plan, medical history, age proof, etc., and submit them before the renewal date of your existing group plan.
V) Once this is done, you can make the required payment and you will have your new migrated individual plan active within a specific duration of your payment.”
VI) Make sure not only to apply on time but also to keep completing the underwriting formalities on time.
VII) “Inform the insurer on time about porting the plan and also get the pre-medical check-up done on time if asked by the insurer while porting.
VIII) Note that group insurance plans usually do not come with any waiting period but in case your group health plan has one, then the balance might be carried forward to the new plan for the same insurer.”
IX) If you have other family members covered in the group insurance policy, you can even port to a Family Floater health insurance, thus ensuring coverage for the entire family without leaving out the continuity or waiting period benefits.
X) The policyholder can choose for higher SI at the time of exercising the request for portability with new insurer or the same insurer. However, the portability benefits will be available only up to the extent of SI and cumulative bonus acquired in previous policies from previous insurer.
XI) When the option of portability is exercised in health insurance policy, all the terms and conditions shall be as per the terms and conditions of the new policy. The credits gained in the previous health insurance policy on the waiting period and time bound exclusions are protected.
CONCLUSION: we shall get below mentioned benefits from porting or migrating Group Insurance Policy at the time of leaving job/resignation;
Please ensure that :-
i) Porting from group to individual policy can be done with the same health insurer.
ii) Exclusion of waiting period in a health plan would apply to the same sum assured in case you want to increase Sum Insured, then it will be based on the discretion of the insurer.
iii) Inform the group insurer about the porting process at least 45 days prior to your last date in the company and in case of delay ask your group insurer to increase the period of coverage on payment of prorate premium for the extended time.
iv) If family members are covered in the group insurance policy you can port to a Family Floater.
v) It will provide you better benefits than taking new insurance policy with your new group insurer with new employer.
vi) The Group Insurance Policy will be converted into individual/family floater policy, which will provide you additional insurance cover along with insurance cover with your new employer.
DISCLAIMER: the article presented here is only for information and knowledge of readers. The views expressed here are personal and in case of necessity do consult with insurance advisors.