Health insurance is one huge industry with varied plans available for different needs and target groups. Insurers offer plans for accidents, critical illnesses, special diseases and other needs. They also target groups such as individuals, families and company employees.
But can charity and non-profit organizations get health insurance?
The answer is yes! These organizations can go for Group Health Insurance plans. Here are some of the ways in which health insurance is applicable to charity organizations.
Trust, companies or societies
Charities can get registered in India as a trust, society or a non-profit company under Section 8 of the Companies Act, 1956. Depending on the registration, the charity organization will be governed by different laws and acts.
As you may know, every charity needs a minimum number of members to be registered in India. For trusts, the minimum number is 2, for non-profit companies it is 3 and for societies, it goes up to 7.
The charities are eligible for a group health insurance policy. This policy covers a group of people belonging to a common organization or community. Typically, companies buy Group Health Insurance Plans for their employees and their dependents. However, any group of individuals can buy these insurance policies, including charities. The head of the group, such as employer and business owner, pays insurance premium on behalf of the group. So, the health insurance is practically free for all members of the group.
Minimum 10 members
To buy a group insurance in India, you need to get at least 10 individuals covered under the policy. If the number of members in the group falls short of 10, you will have to scale up to reach the minimum number before buying a group health insurance. Moreover, these should be your employees and their families. So, the members in the group should not just consist of your family.
More the merrier
When you buy anything in bulk, you realize that the larger the quantity, the greater the discount offered. Similarly, health insurance also turns out to be cheaper when you buy for larger numbers. So, more the employees in your organization, cheaper the group insurance. Ideally, experts suggest that you should buy a group insurance if your organization has over 20 members.
Group insurance can be very beneficial, not only because of the low cost involved but also wider coverage in terms of dependents. For example, even grandparents and your spouse’s parents can be covered under the insurance. This is limited to parents, siblings, spouses and children. Moreover, it also includes things like maternity coverage, which is otherwise not covered under individual plans.
Lower waiting period
Usually, the insurance cover becomes effective after a period of time and not immediately after you buy it. This is called the ‘waiting period’. It goes on for a few months when it comes to individual plans. However, for group insurance, the waiting period reduces to a few weeks. This makes it more efficient and beneficial for members.
If you are a smaller organization or want to consider your choices, here’s an alternative! You can simply fund your employee’s/members’ health insurance premiums instead of buying a group insurance plan. This way, you can set a specific limit on the insurance premium – say Rs. 5,000. You can also fund it jointly with the employees/members if it exceeds the specified limit. Bring an expert and ask them to recommend the right health insurance plan as per individual needs. Doing this brings in a factor of flexibility.
If you plan on purchasing health insurance for charity organization, keep the above mentioned points in mind. Make the most of your group health insurance plan and get maximum financial benefits.