Losing a job can be a stressful experience for anyone, and in India, it can be particularly challenging due to the lack of a social safety net. In addition to the loss of income, many people worry about losing their health insurance coverage, which can lead to financial strain if they need medical treatment. This article aims to provide tips on navigating corporate insurance after a layoff in India and staying covered during this difficult time.
It is essential to understand exactly how health insurance after termination works to ensure that employees are covered for every healthcare service they might need while they look for new employment. In India, a good number of employers provide health insurance coverage to their employees. However, the coverage may end when they leave the company.
To find out if an employee is entitled to benefits like the continuance of health and life insurance benefits, employees should check their employment contracts and speak to the HR department.
Companies that are conducting layoffs are providing health insurance benefits even post the termination for a certain period. This helps the employees with continued insurance coverage till the time they are able to secure other employment.
The process of availing this insurance remains the same and the employees can get in touch with the HR or the insurance broker or the insurance company to file claims. Employees generally get an e-card to access insurance benefits and employees should have it with them once they are laid off.
However, if the employees are not offered health insurance benefits post termination, then they have limited options. The employee can choose to port their corporate policy to a personal policy with the same benefits. This would entail the employee to spend from their pocket the cost of insurance premium and most of the insurance companies have the option of porting this policy.
Employees may also choose to purchase a new personal insurance policy from any insurance company that will cover them as per their needs. In both the options, employees and their dependents need to go through pre pre-policy screening process and cannot directly continue with an insurance cover.
One way to secure yourself against layoffs is having a job-loss insurance cover. This cover will help the employees get compensation in the event of a retrenchment that can help employees with their healthcare or other costs.
However, there are a lot of conditions to this cover that does not include claims for being retrenched for poor performance or voluntary resignation. Quite a few companies have laid off people in the pretext of poor performance and also asked people to voluntarily resign. In this case, this kind of an insurance cover would not be helpful.
Indian laws relating to termination are governed by Industrial Disputes Act, 1947 and certain specific laws that vary across states. There are provisions relating to the amount of notice and severance. Other laws relating to gratuity and provident fund are also applicable to provide severance payments. However, none of the laws state that employees should be provided with benefits such as health insurance.
It is critical for an employee to have health insurance after a layoff. While some employers would be generous enough to extend medical insurance to laid off employees. In most cases, employees are not so lucky. It would be sensible to purchase a health insurance policy while in employment so that there is no issue if an employee is laid off. The government on its part should also bring in a safetynet by bringing in laws that address this issue.
Sanil Basutkar is the Co-founder of HealthySure.