Should You Rely On Your Employee Medical Insurance?
So, you’ve just started a new job that comes with some pretty enticing benefits – unlimited coffee, plenty of vacation days, and free medical insurance. This means you no longer need to have your own medical coverage… do you?
Well, not exactly. Here’s why.
But first, what is group medical insurance?
Some employers offer medical insurance to their employees. This is called group medical insurance. Just like your personal health insurance, it can cover your costs for treatment, surgery and hospitalization.
Your coverage benefits may depend on the length of service of your employee. As an older employee, you may enjoy better benefits, such as a higher annual claim limit or coverage that also extends to your spouse and children.
Why not rely on employee health insurance
Your employee health insurance can help cover some of the health costs, but you shouldn’t rely on it alone. Here are three reasons why:
1. Limited coverage
Employee health insurance policies generally have low annual limits. Your annual limit refers to the maximum you can claim each year under your insurance. If your medical expenses are over your coverage limit, you may need to cover the rest of the costs out of pocket.
The annual coverage limits for group medical insurance can vary from RM 10,000 to RM 200,000. Many providers only offer packages up to RM70,000. This may not be enough to cover the cost of treating serious illnesses. For example, a coronary bypass surgery could cost a total of RM 60,000 (including hospital charges, room charges, consultation fees, etc.).
In contrast, personal medical insurance plans generally have much higher annual limits which can exceed RM 1 million. Some plans don’t even have annual or lifetime limits.
2. Coverage conditions may change
Your employee health insurance policy is owned by your employer, which means you are at the mercy of any changes to the policy. For example, your employer may downgrade the policy to save costs, which means reduced benefits for you. They could also do away with it altogether – under the 1955 Employment Act, employers are not required to provide medical insurance to their staff.
On the other hand, if you have your own medical insurance policy, you have the freedom to customize or upgrade it to suit your needs. Even if you have to switch to a cheaper plan to free up space in your budget, at least you won’t be caught off guard.
3. You lose your coverage if you leave the company
Your employees’ health coverage is tied to your job. You will lose your coverage if you leave the company, making it difficult when you are looking for a new job. If you take a few months to find your next job (or if you decide to take a break to deal with family matters or pursue an education), you would be financially vulnerable in a medical emergency. There is also no guarantee that your next employer will provide medical insurance coverage.
Sometimes leaving your business is not a choice in your control. You may be forced to quit your job if your performance is poor, if there is an economic recession and you have been made redundant, if your business is not profitable, if you have been asked to retire… or if you have got an illness that affects your ability to work.
Even if you immediately start working at a new company that offers you excellent medical insurance, you may still need to pass your trial period before you are eligible for coverage. Your employee’s health insurance policies may also have a 30-day waiting period before your health coverage begins. For specific diseases such as tumors and cancers, this waiting period can be up to 120 days. It could mean a huge gap during which you would be vulnerable.
When should you use your employee health insurance?
While you shouldn’t be relying on your employees’ medical insurance for all of your health needs, it can still be helpful. For example, if you have incurred minor medical expenses, you can claim them under your employees’ medical insurance, so that you don’t run out of your personal policy limit. For larger expenses, you can use your employee insurance to claim part of the expense and then cover the rest with your personal policy.
It is better to have your own personal policy
In short, even if you are covered by your employees’ health insurance, it is better to get yours if you can afford it. If you’re worried about how purchasing a new policy might affect your budget, there are plenty of medical insurance plans out there to suit different needs and affordability. While you incur additional monthly fees, you will enjoy peace of mind and a financial safety net.
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