Steps to Design Group Health Insurance and Important FAQs! -

Steps to Design Group Health Insurance and Important FAQs!

Plans to buy health insurance are long terms goals for any organization. They help in retaining the best talent in the organization along with that it also decreases the employee turn-over. When planning to buy group health insurance for the employee’s organizations should be familiar with the steps involved in designing the health insurance plans that serve the set objectives.

How to Design an Employee Benefits Programme

Handling employee benefits is an important and costly effort for employers. Though most employers are required to provide mandatory benefits which are rewarding for their organizations, worker’s compensation insurance and other fixed ones, mostly other benefits are voluntary in nature and determined by the company.
Benefits programs by an organization vary greatly, but typically they include health insurance, life and disability insurance, retirement income plan benefits, paid-time-off benefits, and educational assistance programs. Benefits selection to be offered to employees and design are critical components in the total compensation costs.
In some cases, benefits offered to employees account for 40 per cent or more of total compensation costs. Due to the employer cost investment and the importance of employee benefits in employing and retaining, companies should have a well-thought-out benefits plan design that meets both the worker’s needs and employer objectives.

Step 1: Identify the Organization’s Benefits Objectives and Budget

An important and first step in designing an employee benefits program is to identify its objectives. This identification will provide overall guidance in instituting the selection and design of the benefits program. Generally, this practice does not result in a list of specific benefits offered but rather provides an overview of the administration’s objectives of offering benefits that reflect and reciprocate both the employer and employee needs.
The organization’s business and/or HR approach will help guide the development of the benefits objectives, as these goals should help achieve the overall strategic goals. Factors such as company size, location, industry and collective bargaining agreements should be always considered in the development of the benefits objectives. Some companies choose to have general benefits objectives, whereas others integrate the objectives in their total compensation philosophy of the organization. The benefits objectives are not stationary and should be assessed and revised to reflect the current company strategy and employee needs.
Sample objective: To establish and maintain competitive employee benefits health insurance benefits based on employees’ needs for paid time off and protection against the risks of old age, loss of health and loss of life.

Equally important is determining the budget available for spending on benefits, as most employers have price constraints in offering benefits to employees. If a current benefits plan exists, organizations should analyze current welfares costs and projected costs and create a reasonable spreadsheet outlining annual benefits costs. The rising cost of offering benefits such as health insurance will greatly affect an employer’s benefits.
If no current benefits program is being offered to the employee, the company may need to obtain quotes for a few key benefits to estimate a welfares budget. HR with sound understanding may be helpful in this process.

Step 2: Conduct a Needs Assessment

A needs/requirements assessment should be piloted to determine the best welfares selection and design based on the needs and requirements of the employees. The needs assessment may include a company’s perception of employee benefits needs, competitor’s welfares practices, and tax laws and regulations. But a more current trend is to take a market research approach to employee benefits planning.
The Common market research techniques include a member of staff inquiries in the form of personal interviews, simplified questionnaires or sophisticated research methods. Even though employee feedback will most likely result in higher employee motivation and satisfaction with the welfares offerings, this is true only to the level that the employer is committed to using the feedback in benefits selection and design.
If a current benefits plan exists, the employer may also conduct a utilization review of each plan to determine actual employee use. Knowing the frequency a particular benefit is used and to what extent may help the employer determine cost-saving design practices. For insurance plans such as a medical plan, the carrier will often provide a utilization review for the employer.
Organizations should analyze the existing workforce demographic that is the assessment based on their age, gender and pace they are coming from to assist in determining the needs of various categories of employees. Younger workers may value paid time off more, whereas older workers may place a higher value on retirement income plans.

Managers can analyze and assess the needs assessment results and compare them with any existing benefits/perks and against available benefits to prioritize which benefits will be most helpful in achieving the objectives of the benefits being offered for the organization.
The company will also need to consider and foresee any legal requirements regarding benefits offerings. Some companies may have obligations to offer benefits by law, such as any rule or any obligation mentioned by SECP that needs to be fulfilled by the companies. Employers will need to determine if they are covered by this action and the impact this will have on the decisions and design of member of staff health insurance plans.
Paid sick leave is another benefit that is quickly becoming an obligatory offering for many companies. State and local laws even if they don’t require employers to offer paid sick leave to employees, yet the employers provide these benefits to ensure that the employee is comfortable and does not feel exploited, hence offering paid leave also assures more productivity.

Step 3: Formulate a Benefits Plan Program

Once the needs assessment and gap analysis are complete, the employer will need to formulate the new health insurance policy. Using the data collected from all resources in Step 2, the employer can begin to articulate benefits offerings in order of priority. Then the company will need to determine the cost of providing the prioritized benefits and evaluate it against the benefits budget existing within the company.
This step is complex and compound and the employers may need to consider many factors:
1. Can change be made to the current plan design to induce cost savings?
2. Can perks that are underused or not valued by employees be removed and something more attractive is added?
3. What are the administrative expenses incurred for the benefits?
4. What cost-containment features can be put in place?
5. Will employees have to contribute, from their monthly salary and how much?
These are the certain aspects the managers would keep under evaluation when determining whether to add, change or eliminate benefits offerings.

Step 4: Communicate the Benefits Plan to Employees

In this era of inclusivity, it is important to take all stakeholders in an organization when making a decision, if more than one party involved is going to benefit, be affected or have an influence over the process of decision making.
In today’s world communication is very important and designing the right communication strategy is a critical element to the perks being offered to the employees planning and management.
Employee understanding of the benefits is critical and significant to employee buy-in. Without buy-in, the manager’s efforts, no matter how perfectly designed to meet employees’ needs, may be ineffective and futile. If employee input was obtained in designing the perks programme and used in the benefits design process, employers should be sure to share this with their staff and let them know how their feedback influenced the overall designing of the perks and benefits.
The positive impact on hiring, retention and employee morale may be lost without effective communication plans. Although the company is obliged to provide communications to comply with laws regarding disclosure of various benefits policies and plans, such as a plan description and summary, the communications with the staff should go beyond the legal requirements. Good health and other benefits communication objectives should include:
1. Creating awareness and appreciation of the new or existing benefits and improving employee financial security and providing them with mental peace knowing that their health is covered for any unforeseen situation.
2. Providing a high level of understanding of the benefits offered and a systematic way to avail those benefits.
3. Encouraging wise use of benefits.

Step 5: Develop a Periodic Evaluation Process to Determine Effectiveness of Benefits

Periodically reviewing the benefits and the health insurance policy provided is another important step in the benefits management process. The benefits provided to the staff must be assessed regularly to determine if it is meeting the organization’s objectives and employees’ needs.
Changes in the business climate, the economy, the monitoring environment and workforce demographics all create dynamic forces that affect benefits that are being offered. Employers should consider developing goals and parameters to assess the benefits’ effectiveness and make adjustments as necessary. Companies may also consider using external or international trends and benchmarking data to evaluate the effectiveness of the health insurance policy and other benefits provided or conduct employee surveys or a full-fledge needs assessment repeatedly.

Group Health Insurance –FAQs

Q1: What is Group Health Insurance?
Group Health Insurance is can be understood as outsourcing of the medical facility of the employees and their immediate dependents by the Company to the Insurance Company. It is universally recognized as the best way to safeguard an employee’s interest in the occurrence of loss by illness or bodily injury.

Q2: Why Group Health Insurance?
Group health insurance has multiple benefits that can help an organization in the longer run
1. Attracting and retaining employees
2. The plans are Affordable and help
3. Convenience Flexibility ( in case of cashless hospitalization)
4. Easy fits with Company’s budget
5. Tax advantage for the organization of tax-free claim amounts

Q3: What is covered in Hospitalization & Related (H&R) Benefits?
The benefits which are offered by the organization under H&R includes:
1. Hospital Stay
2. Doctor visits Pre and Post stay Surgery
3. Specialized Diagnostic Test Inpatient Treatments
4. Emergency Accidental Treatment. Pre-Hospitalization
5. Post-Hospitalization Per day room limits
6. Medications required for in-patient care

Q4: What is covered in Maternity Benefits?
Provision of the maternity coverage lies within the sole discretion of the company, the company has the full right to decide on it and the decision is made based on the cost and customization of the plan.
If the company plans to offer maternity coverage the limit given for each female spouse and female married employee under Maternity benefits which includes:
1. Prenatal treatment Childbirth
2. Postnatal treatment Complicated Delivery

Q5: What is covered in OPD?
OPD is again a benefit whose provision depends on the employer, not every organization offers OPD benefit and almost all organizations in Pakistan have a definite cap to OPD consultations. The reason for the cap is that it’s a confirmed expense. An annual limit is given for insured under OPD benefits includes:
Diagnostic Tests

Q6: What is the eligibility of Employees & Spouses?
The eligibility criteria are usually set by the insurance provider and employer together minimum eligibility age is 18 years Maximum eligibility age of Entry is 59 years maximum eligibility age of Expiry is 65 years.
Spouse age for maternity coverage is from 18 to 45 years

Q7: What is the eligibility of Dependents?
The plan offered by organizations varies from employer to employer maximum eligibility age of Entry is 18 years for the children generally rest of the terms and conditions apply.

Q8: What is the minimum number of Lives to acquire a Group Health Insurance Policy?
There must be at least 05 people in an organization to obtain a Group Health Insurance Policy. This can further be discussed with the insurance provider when opting for a plan.

Q9: What is the step to be followed by group health Insurance plans?
When planning to get insured all these things need to be followed in sequence
Step 1: Submission of complete data which includes ages, designations and benefits to be offered to employees.
Step 2: Submission of Proposal citing Premium which is based on age band rates applied on the provided data of the company according to the required benefits.
Step 3: Send acceptance along with the payment of the premium to the insurance provider.
Step 4: Issue Healthcare Identification (HCI) cards and Policy Document.

Q10: Which hospitals are on the panel?
The hospital panel list varies from insurance provider to insurance provider. If you buy group health insurance from an A++ or AA++ reputed insurance provider you will be provided with almost all trusted and desired hospitals on the panel.
For further information on the exact panellist, please refer Preferred Panel Hospital List from the insurance provider.

Q11: How can employees use our HCI card?
For emergency hospitalizations in case of accidents or emergencies, Cardholders may present an insurance provider HCI card to get admitted to a PPN hospital. In case of a Non-Emergency Treatment from PPN Hospital, the Cardholder should seek a Credit letter from the insurance provider in most cases. Terms and conditions applied.

Q12: How do organizations determine who should get a Group Health Plan?
The organizations need to set their goals and priorities of which benefit do they intend to provide to the employees and the ratio of investment versus the returns of that benefit. Many organizations provide the health benefit considering it a basic benefit having a positive impact on the overall organizational goals.

Q13: Whom can organizations enrol under their corporate health policy?
Organizations when providing health insurance can include, the employee their spouse up to the age of 59 years and a maximum of 4 dependent children above 90 days old, in your policy. Once enrolled, the coverage can be continued up to the age of 60 years.

Q14: How does the Group Health Plan work?
The group health plans extents to employees, spouses and children, the parents of the employee are not covered under the health plan provided by the organization. There is a definite limit set by the employer which needs to be met and if over exceeded the Health Insurance Policy would cover only up to for instance Rs.100,000/-, while the remaining amount of Rs.150,000/- would have to be borne by the employee himself.
The maximum amount that can be claimed under the policy during a policy year will be limited to the Annual Family Limit selected by the employer.

Q15: What is the General Waiting Period?
In the first policy year, coverage would be effective after thirty days once the policy has been issued and has been delivered to the main Insured Member, except for Accidental Emergencies which will be covered from the date of the purchase of the policy.

Q16: Is there a waiting period to incorporate health plans like Individual or family health plans?
Unlike the general health plans for individuals and families, there is no waiting period required when you purchase a “Group Health Insurance Plan.” The plan or the coverage starts from the date of purchase of the policy.

Q17: What are the advantages of a Network Hospital?
Reputable insurance providers have developed a network of over 200 plus carefully selected hospitals nationwide. You can download a complete list of Network Hospitals from their respective websites or can inquire about them by calling on their customer service helpline.
In the event of hospitalisation, you can choose any of the Network Hospitals for your treatment without having to pay out of pocket. You can avail of the credit facility by a simple pre-authorization procedure and the insurance provider will settle the bill directly to the hospital, as per your entitlement.

Q18: Can I be treated at a Non-Network Hospital?
Yes! But the immediate treatment expenses will be borne by you. The insurance provider will reimburse these expenditures on submission of the original bills, subject to equitable charges that would have been sustained at a comparable network hospital for a similar treatment.

Q19: Are pre-existing medical conditions covered?
The pre-existing medical condition means any sickness, disease or injury or any symptom related to such sickness, disease or injury which has been diagnosed, treated or is under treatment or has been known, even if no medical advice or treatment was sought, before the effective date of this insurance.
Pre-existing conditions, if any, must be disclosed by the insured member at the time of enrolment in the general health insurance plans but in the group health insurance plans, it is decided by the employer to offer pre-existing medical coverage or not. Usually, the treatments required due to pre-existing conditions are covered under the group health insurance policy.

Q20: Is there any exclusion?
Expense arising from or related to Pre-existing conditions, Pregnancy and Childbirth, Outpatient treatment, war, invasion, civil unrest, infertility, cosmetic treatment, routine medical check-up etc provision of the coverage depends on the plan chosen by the employer. Dental and suicidal tendencies are not provided coverage for in almost all corporate health insurance plans.

Q21: Are there any in-admissible conditions?
The policy may and may not be available to people suffering from Cancer, Diabetes or HIV/AIDS depending on the coverage provided and procured by the organization.

Q22: Will I be insured after leaving the organization?
Usually, the employee is not covered after leaving the organization and is immediately deleted by the employer providing the health coverage.

Q23: In how many days will I receive the policy documents?
Your policy documents along with your Health card will be dispatched to you within the max of 30 working days once the account has been debited. One thing to note is that the policy becomes effective once the premium is paid by the organization and acknowledged by the policy provider.

Q24: What is the procedure in case an organization wants to cancel Group Health Plan?
Once it purchases the corporate, the organisation cannot cancel or even make any changes once the premium is paid. The changes required or if the organization aims to cancel the plan can only be done after one year of the plan purchased. It is advised that whenever buying health insurance employees they need to be sure of the plan the organization is opting for.

Q25: is the insurance provider available on the market?
There are multiple renowned and trustworthy group health insurance providers, like Jubilee Life, EFU Allianz Adamjee Life, IGI – Life Vitality, TPL Insurance, Pak-Qatar Takaful, Salam Takalful these are someone the renowned underwriters of this Policy. These are the specialised Health Insurance companies in Pakistan.

Q26: How to get the best Group Health Insurance Plan for the organization?
There are multiple ways to procure the best health insurance plan for your organization. The plans= can be bought directly from the insurance provider or any of your trusted agents who can provide you with the best deal and plans with the best customization that fulfils the needs and requirements of the organization buying health insurance for its employees.
There is a benefits column in the policy document, the organization should properly read and it should be understood by the employers when procuring the health insurance for instance
1. They should see coverage till which age is available means minimum and maximum age to buy insurance
2. They are getting pre-existing or emergency coverage or not
3. If the organization is procuring maternity benefits what would be the terms and conditions associated with it and what would be the maternity limit?
In addition to this, when procuring the health insurance plan, the organization can definitely choose to pay online for any of the desired plans purchased for their organizations.

Q27: What is the procedure to add or delete an employee?
An email has to be sent to add or delete to the insurance provider or the point of account of the insurance provider, mentioning the policy effective date. Deletion of the employee can be done immediately and addition takes 3 to 5 working days.

Pro-rate basis: the addition and deletion of an employee are done on the pro-rate basis for instance if one employee health is 12k if the employee leaves after 6 months after the date of purchase of the insurance policy the balance is given to the client organization at the time of renewal. Same if the addition of the employee, if insurance is balanced at the time of renewal or the end of the policy term.
In maternity situations, the plan procured with maternity, no addition or deletion of an employee affects the premiums paid for. It’s the cost on which a pro-rate basis is inapplicable. Addition or deletion is only a health premium not in the case of maternity premium.


We hope that the information provided in the blog would be helpful and after this blog, you stand better educated on the terms and information related to corporate health insurance plans, the nitty-gritty of it and the ways to means to maximum utilization of the plan.

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