When a medical emergency hits, the health of a person becomes a matter of concern for himself as well as everyone close to him. At such a time, financial aid is extremely important. For providing financial assistance to the patient, health insurance companies are of great help but for this, it is necessary to have a health policy. Buying health insurance is not a legal requirement, so a potential policyholder gets complete freedom when it comes to buying a health insurance policy.
While purchasing a health insurance policy, where is the surety that the policyholder will be able to claim all the benefits of that policy (as per the terms and conditions)? This is when IRDA’s guidelines for health insurance come into the picture.
In this article, we will discuss latest IRDA guidelines for health insurance, health insurance portability rules, guidelines for health insurance claim settlement and how IRDA regulates the insurance industry in order to ensure fair business practices in the insurance sector in India.
What is IRDA?
Insurance Regulatory and Development Authority (IRDA) is a government authority which comes under the Ministry of Finance, Government of India. IRDA was constituted with the aim of optimizing the existing insurance industry in India and to come up with new avenues for further developing this industry. In 1999, IRDA was suggested to be formed as an autonomous body for the insurance industry. But in April 2000, it was decided that IRDA would operate as a statutory body for regulating the insurance sector in India.
The trends in the insurance industry keep changing every now and then. IRDA has to keep itself updated with all the new trends and come up with standardization guidelines which protect the rights of insurance companies and policyholders and helps to ensure a smooth functioning in the insurance industry. IRDA also issues IRDA insurance license to the insurance companies.
Health Insurance Rules by IRDA
IRDA has rolled out many rules and regulations that need to be complied with. These rules play a significant role in assisting both the insurer and insured to offer and avail a square deal when it comes to the health insurance and allied services.
Here’s a list of some important rules that were laid down by IRDA for the insurance sector:
- In a case wherein the policyholder gets his health insurance policy renewed in a timely manner (with no gaps in renewal), then the policy will not have any exit age.
- Group Health Insurance Policy’s validity is limited up to 1 year only.
- It is mandatory for the insurance company to inform the policyholder about all the terms and conditions applicable on a health insurance policy with respect to availing treatment at medical facilities available in India.
- For insurance policies for specific health that offer coverage to a particular group of individuals (pregnant women, students, etc.), it is necessary for the insurance companies to provide the policyholder the option of migrating to another plan after meeting the exit criteria and provide appropriate credits when policy gets renewed with no gaps.
- When an applicant’s application regarding a health insurance policy is rejected, the insurance company must state the reason for rejection in writing in a fair and transparent manner.
- Rewards must be offered to the policyholder that gets his policy renewed in time, has purchased it early in life and provides positive feedback about claim experience. The rewards must be enlisted within the prospectus and policy document after the board has approved them.
- A list of medical facilities, including government and private facilities, where the medical reports will be accepted by the company before policy issue, should be provided by the insurance company to the policyholders.
- The premium charged must be just and fair especially when it comes to the senior citizens. There should be no hidden charges and the entire process must be transparent. The final amount must be informed to the policyholder in a clear manner.
IRDAI Guidelines for Health Insurance Policy, Claim Rejection, and Claim Settlement
IRDA’s guidelines for health insurance stress on the aspects which are related to the settlement of claims and multiple policies usage among others. Let’s take a look at these guidelines stated by IRDA:
- Claim Rejection: If a policy gets renewed by the policyholder without any gap for 8 years, a health insurance company can’t reject a claim. This 8 year period is known as the moratorium period in which insurance companies cannot appeal to IRDA regarding settlement of such a claim unless it is regarding fraud or a claim that was raised against the exclusion of the policy. A claim cannot be rejected by the insurance company in case of misrepresentation or non-disclosure. Insurance companies are given 8 years by IRDAI for the verification of information given by the policyholders, thus claim rejection on those grounds is not applicable.
- Inclusion of Telemedicine in the Health Policy: The COVID-19 pandemic has been a really stressful period. It has forced both the healthcare professionals and patients to offer and avail online consultations. The online consultation fee can be really high and prove to be a financial loss to the policyholder. Therefore, IRDA has decided to ask health insurance companies for the addition of telemedicine in the coverage wherever it is applicable. Due to this move, many patients are able to avail medical opinion without any financial stress.
- Settlement of Claims: If there is any delay in claim settlement on the insurer’s part, the insurance companies are liable to pay an interest rate of 2% higher than bank rates on the amount of claim. The claim must be settled within a period of 30 to 45 days from the date on which the policyholder was communicated the last required document. The time duration will differ depending on the claim’s nature and investigation needed for it.
- Multiple Policies: A person can purchase multiple policies of the same nature. It is up to the insured to raise a claim at his preferred company and the insurer must settle the claim according to the terms and conditions of the respective policy. If the claim amount gets disapproved by one insurer, the insured has the freedom to raise a claim for the balance amount with another insurer in the scenario of several policies. This is applicable in a case where the sum insured gets exhausted under one policy.
- Health Insurance Portability: If a health insurance policyholder is unsatisfied with the services offered by the insurance company, they have the option of migrating to a new plan of a similar nature. There are two options given to a policyholder as far as health insurance portability is concerned. First, a policyholder can migrate to another plan offered by the same insurance company the policyholder has the health policy of. Second, a policyholder can choose to migrate to a new plan which is offered by another insurance company.
Policyholders must apply for migration within a timeline of at least 30 days before the policy renewal’s date. The application can be made 60 days before the current policy expires but not earlier than this. The policyholder can expect to port the entire policy including the benefits and nominees if he has renewed the policy without any gaps.
What Are The Functions Of IRDA?
The Indian Constitution authorizes IRDAI for regulating and developing the insurance sector across the country so that both the policyholders and insurance companies can benefit. Mentioned below are all the main functions of IRDAI as per the legislation:
- IRDA is the concerned authority for registration, renewal, update, suspension, withdrawal or cancellation of registration of an insurance company.
- It is tasked with reviewing, authorizing and rejecting insurance products across the country.
- It works in the interest of both the policyholders and insurance companies for promotion of just practices at all stages involved in insurance policy, from purchase to claim settlement.
- IRDA supervises the Tariff Advisory Committee.
- The regulatory authority keeps an eye on the investment of funds by an insurance company and ensures this is done in a regulatory manner.
- It addresses insurance-related disputes between different parties and solves them.
- It encourages development of businesses within the insurance industry.
- IRDA also conducts audits of the insurance companies.
Dos and Don'ts for Health Insurance
Here are some Dos and Don’ts for the health insurance policyholders to consider:
DOs
While purchasing a health insurance policy, you must:
- Acknowledge the restrictions and limitations that come with coverage
- Pay close attention to the terms and conditions of a policy, such as:
- The clause excluding pre-existing diseases
- Waiting period before certain diseases can be considered for inclusion in coverage
- Restrictions and limitations concerning various expenses which are related to hospitalization
- Co-payment which means you are supposed to share a part of the claim
- Policy renewal’s pre-conditions
- Upper limit age for policy entry as well as policy renewal
- The policyholder must disclose details of all pre-existing health diseases or health problems, such as:
- Major ailments
- Health conditions such as high blood pressure, high cholesterol or diabetes.
- Depending upon your age at entry, the company might request you to provide medical reports. You must comply with all the procedures and provide all the required documents.
- You must check the place where the medical tests will be taken and also learn about the procedure of these medical tests.
- You must also check who would bear the cost of such medical tests (whether it’s paid for by the insurance company or paid by you).
- Make sure you pay the amount of premium only after the insurance company can accept your proposal for policy.
- You must renew the policy continuously for the rest of your life.
Don’ts
- Do not conceal any important facts, such those related to your health problems, that might lead to dispute at the time of a claim.
- Make sure you do not have a criminal background.
- Do not allow a gap of even a single day for getting your policy renewed. This can lead to cancellation of your policy or attract penalties.
Conclusion
At times of medical emergency, financial aid is extremely important. For providing financial assistance to the patient, health insurance companies are of great help but for this, it is necessary to have a health policy. Buying health insurance is not a legal requirement, so a potential policyholder gets complete freedom when it comes to buying a health insurance policy. While purchasing a policy, the individual must be aware of all the terms and conditions of an insurance policy. If you have any doubts related to insurance policies or IRDA licenses, get in touch with the Registrationwala team.
