From 1 April, employers may have to pay 50-60% more for group health insurance for their employees as insurance companies are set to hike premiums on such cover.
Group health insurance has been posting losses because some insurers were involved in heavy discounting to retain clients, even in instances where corporate clients were filing huge claims. The loss ratios were almost 160%, reported Moneycontrol.
The losses had led to several insurers, especially in the private sector, to exit the group health space completely or reduce their exposure considerably.
Employees will also be hit in the pocket by the premium hikes because of the co-payment feature. Under this, employees pay a part of the insurance premium for coverage for themselves and their family members.
However, the regulator has issued a directive asking insurers to look at price undercutting and to fix premiums for the financial year. In addition, with some insurers listed on stock exchanges, price discipline is likely to be imposed, said the head of underwriting at a private general insurance company.