So, you’ve just started a new job that comes with pretty snazzy perks – free-flow coffee, lots of vacation days and free medical insurance coverage.
This means that you no longer need to get your own medical coverage…right?
Well, not exactly. Here’s why.
Some employers provide medical insurance to their employees. This is referred to as group medical insurance. Like your personal medical insurance, it may cover your costs of treatment, surgery and hospitalisation.
Your coverage benefits may depend on your employee seniority. As a more senior employee, you may enjoy better benefits, such as a higher annual claim limit or coverage that extends to your spouse and children as well.
Why you shouldn’t rely on employee medical insurance
Your employee medical insurance can help you cover some of the costs of healthcare, but you shouldn’t solely rely on it. Here are three reasons why:
1. Limited coverage
Employee medical insurance policies generally have low annual limits. Your annual limit refers to the maximum you can claim under your insurance each year. If your medical expenses are higher than your coverage limit, you may have to cover the rest of the costs out of your own pocket.
The annual coverage limits for group medical insurance can range from RM10,000 to RM200,000. Many providers only offer plans that go up to RM70,000. This may not be enough to cover treatment costs for serious illnesses. For example, a coronary bypass could cost over RM60,000 (including hospital charges, room charges, consultation fees, etc.).
By contrast, personal medical insurance plans typically have much higher annual limits which can go over RM1 million. Some plans don’t even have annual or lifetime limits.
2. Coverage terms may change
Your employee medical insurance policy belongs to your employer, which means that you are at the mercy of any changes they make to the policy. For instance, your employer may downgrade the policy to save on costs, which means reduced benefits for you. They could also remove it completely – under the Employment Act 1955, employers are not obliged to provide medical insurance for their staff.
On the other hand, if you have your own medical insurance policy, you have the freedom to customise or upgrade it to fit your needs. Even if you have to downgrade to a cheaper plan to free up room in your budget, at least you won’t be caught unawares.
3. You lose coverage if you leave the company
Your employee medical coverage is tied to your employment. You’ll lose your coverage if you leave the company, which makes it hard when you’re on a hunt for a new job. If you take a few months to find your next job (or if you decide to take a break to attend to family matters or pursue education), you’d be financially vulnerable if you have a medical emergency. There’s also no guarantee that your next employer will provide medical insurance coverage.
Sometimes, leaving your company isn’t a choice that’s under your control. You could be forced to leave your job if you’ve been performing poorly, if there’s an economic recession and you’ve been retrenched, if your company isn’t profitable, if you’ve been asked to retire…or if you have gotten an illness that affects your ability to work.
Even if you start work immediately at a new company that gives you great medical insurance, you may still need to pass your probation period before being eligible for coverage. Your employee medical insurance policies may also have a waiting period of 30 days before your coverage for illnesses commences. For specific illnesses such as tumours and cancers, this waiting period can be as long as 120 days. This could mean a huge gap during which you’d be vulnerable.
When should you use your employee medical insurance?
Even though you shouldn’t rely on your employee medical insurance for all your health needs, it can still come in handy.
For instance, if you have incurred a minor medical expense, you could claim it under your employee medical insurance, so that you don’t use up the limit on your personal policy.
For bigger expenses, you could use your employee insurance to claim part of the cost, then cover the rest with your personal policy.
It’s best to get your own personal policy
In short, even if you are covered by your employee medical insurance, it’s best to get your own if you can afford it.
If you’re worried about how taking out a new policy could affect your budget, there are many medical insurance plans out there to suit different needs and affordability. Although you’ll incur extra monthly costs, you’ll enjoy peace of mind and a financial safety net.
For more information on personal medical insurance products, check out our site here.