If you have become an employee to a company, you can expect to receive medical insurance coverage as part of your benefits package. You are eligible to receive coverage under the group policy plan insured by your company.
It is a great benefit especially if you still do not have your medical insurance in place. But, does this mean that you no longer have to purchase medical insurance on your own as your employee medical coverage should suffice?
You may want to hold on to that thought and read this article first. A group medical insurance only provides different coverage and benefits from the individual plan that you will buy for yourself.
There are differences between these two that you should know, in terms of coverage, policy duration and premium.
On a different note, we want to explain that group insurance should not be confused with the Employment Instrument System (EIS) managed by Socso, which serves as a financial scheme to help Malaysians cope with retrenchment and job loss. Meanwhile, group medical insurance is a private insurance (health plan) offered by an employer that provides health coverage to employees during their employment.
What is group medical insurance?
Group medical insurance is a type of insurance that gives coverage to employees or members of a company/organisation. It usually provides coverage at a lower cost as the risk to the insurer is spread across a group of policyholders.
Key features of group medical insurance:
- Group members can choose if they want to enrol in or decline coverage.
- Family members or dependents can be included in the group plans at additional cost
- Group medical insurances typically require a 70% participation rate.
- Premiums are shared normally between the company and employee.
*However, different companies have different ways to decide on their group medical insurances.
What is individual medical insurance?
Individual medical insurance is coverage to a person on an individual sum insured basis. You may customize the coverage as per your own health and not be shared with others (family members or dependents).
A comprehensive individual medical plan usually covers your hospitalization and surgical expenses due incurred to illnesses.
Key features of an individual medical insurance:
- Individual medical insurance only provides coverage for the insured individual.
- You get to customise your risk planning depending on your needs.
- Best suited for people with higher health risks.
Having employee medical insurance surely does have its perks as are a few added advantages that you can enjoy for being covered by a group policy plan. Among the benefits that we may conclude is that group insurance is some of the most affordable insurance covers that you can invest in. It is much lower than individual insurance plans because the risk is spread across a higher number of people.
The process for insurance claims is faster and easy; hence; saving you from the hassle. The waiting period for hospitalization is waived off in cases of most group plans. You are also not required to undergo a medical check-up to determine if you have pre-conditions.
Although there are benefits as mentioned above, relying entirely on your employer’s insurance plan to cover you can pose other problems too.
The range of coverage provided under group medical insurance may differ from organisation to organisation. Usually the coverage is vastly subjective and limited. They may not provide enough to cater to all your medical needs.
Should you solely depend on employee medical insurance?
Although your employee medical insurance helps you cover some of the costs of healthcare, you should not only solely rely on it. Here we list out several reasons why:
The range of coverage provided under group medical insurance may differ from organisation to organisation. Usually the coverage is vastly subjective and limited. They may not provide enough to cater to all your medical needs.
Limited coverage
Your company holds the right to determine your coverage along with other benefits featured under the group plan. Some employers may decide the amount of the coverage depending on the pay or seniority ranking.
Generally, medical insurance policies have low annual limits, and the amount is the maximum that an employee can claim for each year. For any medical expenses exceeding the given annual limits, the employee will have to foot the bills (remaining balance). You would have to check if your employee insurance is enough to cater your medical needs.
The annual spend limitations can range from RM20,000 to RM200,000.
Changes in terms and conditions
Your company is allowed to change the terms and conditions if they wish to reduce expenses. Say if the company is experiencing hiccups, therefore it might reduce the insurance coverage. The company might ask the employees to co-pay some of the premium as they could not afford to pay for all.
You can lose your coverage upon resignation
This is terrifying because your medical coverage is tied to your employment.
Say if you are laid off by your employer or you choose to leave the company, the policy plan will be terminated immediately. Bear in mind, you are only eligible to get coverage as long as you are an employee in the company.
Next, you need to land a job after resigning from your previous job. You may take about a few months and anything misfortune could happen to you within your unemployment period. Have you saved up?
There is no guarantee too, that your next employer will provide medical insurance coverage.
No future savings
Medical insurance is a critical component of personal financial management. But group insurance policy does not include continuous coverage for employees.
Once you retire, how are you going to cover your medical expenses after that (if you are in dire need)?
Your company does not longer cover for you after retirement. This could be a big problem for you if you don’t have your own medical insurance. An individual medical for yourself will be costly at the age of 50, considering your age and possible pre-existing illnesses.
Unlike an individual plan, you hold the power to plan how you want to spend on medical insurance on an annual basis.
Here we conclude the differences for you to do comparison.
| Individual Medicine Insurance | Group Medicine Insurance | |
| Policy Period | – The company has the power to cancel the policy plan – Policy plan of an employee may be terminated upon resignation from the company | It is up to the policyholder to continue/discontinue the policy plan |
| Premium | – Usually covered by – Policy does not get costlier with the age of the employee | Paid by the individual on a regular basis- Policy gets costlier as you age |
| Coverage | – The plans are neither flexible or customisable- Uniform coverage to all members in group – Coverage may vary to a certain amount of the employee’s pay | Policyholder gets to customise their risk planning depending on their needs |
| Medical Checkups | Medical check ups are required for buying individual medical plans | There is no need for prior medical check ups for a specified coverage |
Should you consider getting your own medical insurance?
Though your employee medical insurance comes with certain benefits, they have their constraints too. It is wise for you to get your own medical insurance to help you be better prepared for the future.
If you are worried that you may not be able to afford to purchase one, there are various plans that can suit your needs within your budget. Reach out to Bjak if you are looking forward to signing up for a new medical insurance! With as low as RM5 a day, you can secure a better future for yourself and family.
