Health insurance is a service and insurance product that covers medical, surgical and pharmaceutical expenses. The cost of Medicare has been shattering roofs and has not seen a decline since year 2000. In order to secure yourself against the inevitable and deal with it in much better way, you need health insurance. On one hand we have IndividualHealth Insurance that caters to the majority of your customization and wants. On the other hand we have Employer-provided health insurance(EPHI), which is financed through your employer or jointly by employer and employee contributions. It is currently subsidized by the government through tax exclusions for employer’s contribution to employee health insurance plans.
Now if you are single and physically fit, the EPHI may suffice your needs. But if you have a family to look after or you have a history associated with certain illnesses than EPHI may not be enough to shield you. It has many preconditions and limitations that render it as ineffective.
Here are the four limitations and drawbacks that come into the picture when having an EPHI.
CORPORATE HEALTH PLAN LAPSES ONCE YOU QUIT
Employer benefits play a huge role in career decisions that some employees put benefits over career advancement when deciding whether to renounce a job. For those who decide to leave, employer benefits namely health care, dental and retirement plan may end shortly or immediately after leaving the company. Though you can continue with your life insurance, the employer stops subsidizing your insurance and you will need to pay your full premium. In such a situation if you compare your plan with other individual plans it will look more expensive and less beneficial.
RISK WHEN SWITCHING JOBS
Your health insurance is at great risk when you change your job. If you are healthy and fit your new employer may allow you to transfer and continue with the same employer provided insurance. But if you have preexisting medical conditions then you must think twice before leaving your job, because EPHI is a pool of money that is funded majorly by the employer and the company may feel reluctant to invest in aging and ailing employees. In this case you end up paying majority of the premium that is invested in health insurance. Therefore about 80% of employees are disinclined to shunt their jobs because it involves the risk of losing EPHI.
LIMITED PLANS WITH LIMITED CUSTOMISATION
Employer provided health insurances are bound by requisites that favour the employer because he contributes more than 60% to the investment. Moreover, there are limited policies to choose from and your employer decides which doctor you see. At times you end up paying from your pocket for vision and dental checkups that are not covered under the plan. Furthermore, it is difficult to customize the plan and bring your family under the cover of insurance umbrella, once you get married and have children.
EPHI COVERAGE IS INSUFFICIENT
EPHI coverage is between 1-2 lakh for entire family, with low premiums this looks very appealing, but this money proves to be inadequate when a medical emergency strikes. Ergo you must find private insurance plans that provide satisfactory coverage that suffice the needs of the entire family.
The ones who’ve had tough time with their well-being may not find it sufficient enough to assure them of their imminent future catastrophe. But since now you know the shortcomings of EPHI you can plan your health insurance better and look to add other policies that provide a broader and more secure financial cover.