- Date : 16/09/2019
- Read: 3 mins
Medical insurance premium for retired bank employees has been increased multiple times in the last few years and is now further expected to rise.
Bank employees, both current and retired, are covered under the group mediclaim policy. While the premium for the current bank employees is paid by the bank, the retired employees have to bear the burden themselves. This burden is further expected to increase as the mediclaim premium may rise from the financial year 2020.
The expected rise in premium
The medical insurance premium is expected to rise from Rs. 20,000 annually to Rs. 30,000. Two people familiar with the development told the Economic Times that this hike in premium is because ‘the employees have sought more facilities from the insurer’.
Past hikes in the premium
Over the last few years, there have been repeated hikes in the annual medical insurance premium. Due to this, many retirees have been forced to opt-out of the policy.
“While we agree that an increase in benefit is a welcome sign for the beneficiaries, but the top priority for retirees is to keep the rates affordable. Premium rates have gone up more than four times in the last four years,” said SC Jain, general secretary of All-India Bank Retirees’ Federation, in a letter to All-India Bank Employees Association (AIBEA) general secretary CH Venkatachalam.
The rise of premium rates may increase the burden on retired employees. Retirees are precisely the group for whom a medical insurance cover is critical. However, since the premium rise affects all those who retired as workmen employees, irrespective of their pension earnings, most may not be able to pay the higher premium.
Groups expected to opt-out
The employees most likely to opt-out of the scheme due to the inability to pay a higher premium are:
- 1,20,000 employees who retired before 2002 with Rs. 1.5 lakhs as an annual pension
- 50,000 family pensioners who receive Rs. 95 lakhs as annual pension, and
- Around 900 employees who retried before 1986 and get Rs. 40,000 as ex-gratia payment annually Source: Economic Times
United India Health Insurance’s role
United India Health Insurance is expected to get the contract for providing medical insurance to bank employees, like before. Amongst all general insurance companies, including private ones, United India Health Insurance bid the lowest. Despite having the lowest bid, the premium is expected to rise by 10 to 15%. Indian Banks’ Association (IBA) is conducting the renewal process. Watch this video to see how much insurance premium should you actually pay.