Income tax benefit for those who buy health insurance
We can divide this into 3 parts;
1-When you buy the policy for your family - If you are buying the policy for your family; maximum amount can be Rs 15000 under clause 80 D. This is the highest amount which you can cover under the limit of Rs 1.00 lakh.
2-When you pay for health insurance of your parents who are below 65 years; Maximum amount can be Rs 15000. This amount is over and above the limit given to you under 80D.
3- When you pay for health insurance of your parents who are above 65 years; Maximum amount can be Rs 20000. This amount is over and above the limit given to you under 80D
It means that if you are getting the policy for your family as well as your parents who are above 65 years then you are getting rebate on Rs 35000.
If you are in higher tax bracket then this can be 30% of Rs 35000. It means nearly Rs 12000 is being paid by the Government.
Thursday, January 28, 2010
Health insurance Cover is a good benefit to retain staff
Large numbers of HR specialists are of the opinion that take home pay is more important for attracting the talent as well retaining the staff.
We have come across survey where top 125 employers comprising a large and varied industry segments were surveyed. The findings are;
Over 40% Indian companies use health care cover for employees as a tool to attract talent and a retention strategy. Rising premium costs have not reduced the importance of health care cover as an employment value differentiator and Indian companies continue to use it as part of their hiring and retention strategy.
Only 11% use it to minimize loses arising out of employee heath issues.
58% companies did not deduct any premium costs out of employee salary, which means that 100% cost is booked by the company as an expense.
Rising health care costs are making are making corporate strive to strike a balance between increasing premium costs and talent management strategies. It is vital that employers design appropriate health care plans, employ efficient ways to manage them and to ensure employees understand their value.
Corporate are constantly devising different strategies to control healthcare costs. Companies are using;
1. Emphasizing on employee education for healthcare.
2. Removing the parents of employees from the coverage as higher premium is being charged by the Insurance companies for covering the parents.
Only 17% companies cover post-retirement medical expenditure, most of which are public sector companies. We foresee that this will be reduced in near future as more and more PSU’s go in for disinvestment and start coming at par with Private companies which are quote on the stock exchange.
This shows that healthcare cover is being provided only for the benefit of the companies and not for the employees. Better health of the employees means better productivity for the company. Also by providing health cover companies save on medical expenditure to be incurred on health of the employees.
We have come across survey where top 125 employers comprising a large and varied industry segments were surveyed. The findings are;
Over 40% Indian companies use health care cover for employees as a tool to attract talent and a retention strategy. Rising premium costs have not reduced the importance of health care cover as an employment value differentiator and Indian companies continue to use it as part of their hiring and retention strategy.
Only 11% use it to minimize loses arising out of employee heath issues.
58% companies did not deduct any premium costs out of employee salary, which means that 100% cost is booked by the company as an expense.
Rising health care costs are making are making corporate strive to strike a balance between increasing premium costs and talent management strategies. It is vital that employers design appropriate health care plans, employ efficient ways to manage them and to ensure employees understand their value.
Corporate are constantly devising different strategies to control healthcare costs. Companies are using;
1. Emphasizing on employee education for healthcare.
2. Removing the parents of employees from the coverage as higher premium is being charged by the Insurance companies for covering the parents.
Only 17% companies cover post-retirement medical expenditure, most of which are public sector companies. We foresee that this will be reduced in near future as more and more PSU’s go in for disinvestment and start coming at par with Private companies which are quote on the stock exchange.
This shows that healthcare cover is being provided only for the benefit of the companies and not for the employees. Better health of the employees means better productivity for the company. Also by providing health cover companies save on medical expenditure to be incurred on health of the employees.
Wednesday, January 27, 2010
Early detection of disease can save higher claims, which insurance companies are paying at present
We came across two interesting news items recently which had following information for us:
1. According to AIIMS study 90% women ask for medical help after stage 1 of breast cancer. 70% of women go to their doctors in the 3rd and 4th stages of breast cancer, by when conservation of the organ is very difficult and chances of cancer developing in the other breast are very high. Naturally it means high claim figure to be paid by insurance company as well as pain and agony for the patient.
2. As per a study published in the Journal of Clinical Endocrinology and Metabolism, people with periodontitis are at about 20% greater risk of heart attack. 34% of people with moderate periodontitis and 37% with severe periodontitis had metabolic syndrome, compared to just 18 percent of people with no gum disease or only mild periodontitis.
Metabolic syndrome is a cluster of risk factors for heart disease, paralysis and diabetes, including high blood pressure, abdominal obesity, low levels of “good” HDL cholesterol and high triglycerides (another type of blood fat).
By not covering dental treatment as a part of Health Insurance, most of the insurance companies feel that they are saving lot of money. But if they start paying for dental treatments, maybe they can save higher claims for which they are called upon to pay at a later date.
Insurance companies issue health insurance policies to individuals below the age of 45 years without any medical examination and charge appropriate premium from them. In most of the policies there is provision to pay for the health check up expenses but on the one hand amount to be paid is small and a good effort is involved in reimbursement of the same. The consequence is that most of the insured prefer to forgo the same rather than avail this facility.
From the above mentioned two instances we find that if preventive diseases are detected early, it will be beneficial for both the individual as well as the insurance company.
Some of the suggestions which insurance companies may consider:
1. According to AIIMS study 90% women ask for medical help after stage 1 of breast cancer. 70% of women go to their doctors in the 3rd and 4th stages of breast cancer, by when conservation of the organ is very difficult and chances of cancer developing in the other breast are very high. Naturally it means high claim figure to be paid by insurance company as well as pain and agony for the patient.
2. As per a study published in the Journal of Clinical Endocrinology and Metabolism, people with periodontitis are at about 20% greater risk of heart attack. 34% of people with moderate periodontitis and 37% with severe periodontitis had metabolic syndrome, compared to just 18 percent of people with no gum disease or only mild periodontitis.
Metabolic syndrome is a cluster of risk factors for heart disease, paralysis and diabetes, including high blood pressure, abdominal obesity, low levels of “good” HDL cholesterol and high triglycerides (another type of blood fat).
By not covering dental treatment as a part of Health Insurance, most of the insurance companies feel that they are saving lot of money. But if they start paying for dental treatments, maybe they can save higher claims for which they are called upon to pay at a later date.
Insurance companies issue health insurance policies to individuals below the age of 45 years without any medical examination and charge appropriate premium from them. In most of the policies there is provision to pay for the health check up expenses but on the one hand amount to be paid is small and a good effort is involved in reimbursement of the same. The consequence is that most of the insured prefer to forgo the same rather than avail this facility.
From the above mentioned two instances we find that if preventive diseases are detected early, it will be beneficial for both the individual as well as the insurance company.
Some of the suggestions which insurance companies may consider:
- Create awareness and encourage females to go in for mammography test for examination of breast cancer so that it can be detected in early stages and cured easily with much less costs. Sending SMS/email or even telecalling the insured after the age of 45 years will result in good response. The insured will appreciate this gesture on part of the insurance company.
- Tie-up with dental surgeons to offer discounts to people who have health insurance policy. No outgo will happen as far as the insurance company is concerned but there will definitely more and more customers coming to Dental Surgeons and hence they will be motivated to give discount as a gesture of goodwill and low cost in getting more customers who will become customers of their clinic.
Friday, January 8, 2010
2 policies of Health insurance –how to lodge claim ?
Preeti Kulkarni has written a good article in The Economic Times of January 6, 2010 on “Take extra cover for sake of your health”
The Heading carries the line “In many cases, claims can be made under both the policies” It is very interesting and has resulted in many calls being received by me from persons who have visit this website.
The same article under the sub heading “Making a claim under two policies.” mentions
“Many policy holders tend to assume that they can file a claim under any of the policies they have signed up for, which may not always be the case; whether the individual can make a choice to claim depends on the provisions made in the policies taken. Also, whether the individual can make a choice to claim depends on the provisions made in the policies taken. Typically, there is a declaration sought from the customer on the policies under which s/he is covered, and the total liability is shared by the insurers, informs.
The contribution clause in the policies states that claims can be made under both the polices, in the same ratio as the sum insured. For instance, if you are covered under a corporate policy with a sum insured of Rs. 2 lakh, in addition to a personal cover of Rs. 1 lakh and makes a claim for Rs. 1 lakh, the insurer servicing the former will contribute around Rs. 66,000 while the balance will come from the other insurer. However, according to Pawan Bhalla, CEO of Rakish TPA, in India, policyholders are not legally bound to disclose the details of any existing policy or make a claim under any of the two policies they are covered under.”
Pawan has mentioned that it is not necessary to make the declaration to both the Insurance Companies.
Reality is that if the claim is of small sum then everything is fine. But if the claim is large and let us say the facts are
Policy 1 Coverage under corporate group policy = Rs. 5 Lakh
Policy 2 Coverage under own policy = Rs. 5 Lakh
Policy 1 was issued in 2003, and is continuing. A claim was lodged in June 2009, for Rs. 2 lakh and was paid.
Policy 2 was issued in November 2008 and is continuing. Insurance company 2 was not informed about existence of policy 1.
Let us say in January 2010 claim is to be lodged for Rs. 7 lakh.
This is the point at which problem like claim settlement arises when the claim is to be lodge with both companies.
As only one set of original documents (Invoice bill / Receipt / Test Reports / Discharge Summary) can be issued by Hospital therefore if will become necessary for the client to reveal to both the companies about details of polices. If any document is required from Insurance Company (Policy 1) they will point out when you took this policy and why we were not informed about policy 2 on earlier occasion as they would have asked Insurance Company 2 to pay half of the claim amount of Rs. 2 Lakh. In most probability Insurance company 1 while paying the claim of Rs. 7 lakhs in ratio of 1;1 which means Rs. 3.50 lakh will deduct Rs. 1 lakh for June 2009 claim.
In the absence of letter from Insurance Company 1 he can not go to Insurance Company 2. Alternatively if lodges original documents with Insurance Company 2 then he may find slightly easier but problem for claim settlement is bound to emerge.
Any effort to get 2 sets of original form Hospital is not suggested as Insurance Co’s / TPA’s are cautious and are trying to control frauds as many cases of multiple claims being lodged with more than 1 Insurance Company have been noticed / reported.
In the end I will like to say you are buying Insurance for having peace of mind then it is better to reveal to both the Insurance Companies about the policy.
The Heading carries the line “In many cases, claims can be made under both the policies” It is very interesting and has resulted in many calls being received by me from persons who have visit this website.
The same article under the sub heading “Making a claim under two policies.” mentions
“Many policy holders tend to assume that they can file a claim under any of the policies they have signed up for, which may not always be the case; whether the individual can make a choice to claim depends on the provisions made in the policies taken. Also, whether the individual can make a choice to claim depends on the provisions made in the policies taken. Typically, there is a declaration sought from the customer on the policies under which s/he is covered, and the total liability is shared by the insurers, informs.
The contribution clause in the policies states that claims can be made under both the polices, in the same ratio as the sum insured. For instance, if you are covered under a corporate policy with a sum insured of Rs. 2 lakh, in addition to a personal cover of Rs. 1 lakh and makes a claim for Rs. 1 lakh, the insurer servicing the former will contribute around Rs. 66,000 while the balance will come from the other insurer. However, according to Pawan Bhalla, CEO of Rakish TPA, in India, policyholders are not legally bound to disclose the details of any existing policy or make a claim under any of the two policies they are covered under.”
Pawan has mentioned that it is not necessary to make the declaration to both the Insurance Companies.
Reality is that if the claim is of small sum then everything is fine. But if the claim is large and let us say the facts are
Policy 1 Coverage under corporate group policy = Rs. 5 Lakh
Policy 2 Coverage under own policy = Rs. 5 Lakh
Policy 1 was issued in 2003, and is continuing. A claim was lodged in June 2009, for Rs. 2 lakh and was paid.
Policy 2 was issued in November 2008 and is continuing. Insurance company 2 was not informed about existence of policy 1.
Let us say in January 2010 claim is to be lodged for Rs. 7 lakh.
This is the point at which problem like claim settlement arises when the claim is to be lodge with both companies.
As only one set of original documents (Invoice bill / Receipt / Test Reports / Discharge Summary) can be issued by Hospital therefore if will become necessary for the client to reveal to both the companies about details of polices. If any document is required from Insurance Company (Policy 1) they will point out when you took this policy and why we were not informed about policy 2 on earlier occasion as they would have asked Insurance Company 2 to pay half of the claim amount of Rs. 2 Lakh. In most probability Insurance company 1 while paying the claim of Rs. 7 lakhs in ratio of 1;1 which means Rs. 3.50 lakh will deduct Rs. 1 lakh for June 2009 claim.
In the absence of letter from Insurance Company 1 he can not go to Insurance Company 2. Alternatively if lodges original documents with Insurance Company 2 then he may find slightly easier but problem for claim settlement is bound to emerge.
Any effort to get 2 sets of original form Hospital is not suggested as Insurance Co’s / TPA’s are cautious and are trying to control frauds as many cases of multiple claims being lodged with more than 1 Insurance Company have been noticed / reported.
In the end I will like to say you are buying Insurance for having peace of mind then it is better to reveal to both the Insurance Companies about the policy.
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