The Insurance Regulatory and Development Authority of India (IRDAI) has issued new guidelines for health insurance claims. This recent circular aims to streamline the claim process and enhance the policyholder experience.
This significant update replaces 55 earlier circulars and is designed to make health insurance more inclusive and efficient. With these new rules, policyholders can expect faster claim processing times. In this blog, let’s discuss the circular’s key highlights and implications.
Also read: Insurance 101: How to protect yourself and your assets!
IRDAI health insurance on quick cashless authorisation
The IRDAI mandates insurers to achieve 100% cashless claim settlements swiftly. Within an hour of receiving a request for cashless authorisation, the insurance company must make a decision. This rule, effective by July 31, 2024, ensures timely medical treatment for policyholders.
In order to support cashless requests, insurers ought to establish specialised help desks in hospitals. Additionally, pre-authorisation should be provided through digital modes for quick initial approval.
Fast discharge approvals on health insurance claim process
Insurance companies are required to provide final authorisation no later than three hours after the hospital submits a request for release. This guarantees that the insured’s hospital discharge is not postponed.
The insurance will deduct any additional hospital costs from the shareholder’s fund if the insurer delays for longer than three hours. By preventing insurer delays, this provision shields the policyholder from additional expenses.
Suppose an insured person passes away while receiving care. In that case, the insurance company is required to handle the claim right away and make arrangements for the hospital to release the deceased patient’s body. It ensures dignity and support for grieving families during difficult times.
Policy renewal conditions
As long as the product is not discontinued, health insurance coverage needs to remain renewed. Exceptions include cases of established fraud, non-disclosure, or misrepresentation by the insured. If a product is withdrawn, policyholders must be given suitable options to migrate to a new policy as per the outlined procedure.
Insurers cannot deny renewal based on claims made in preceding policy years. It ensures that policyholders are not penalised for using their insurance benefits. Renewal must be guaranteed regardless of the number of claims made.
Fresh underwriting is not allowed at renewal unless the policyholder requests an increase in the sum insured. The insurance provider is only permitted to underwrite up to the higher sum insured in such circumstances. It limits unnecessary re-evaluation of risk and simplifies the renewal process for policyholders.
Grace period for policy renewal
The IRDAI has introduced a standardised grace period for health insurance policy renewals. For monthly premium payments, the grace period is 15 days. For quarterly, half-yearly, or annual premium payments, the grace period is 30 days.
During this grace period, policyholders can renew their policies without losing any accrued benefits. These perks consist of the moratorium period, pre-existing disease waiting periods, particular waiting periods, no-claim bonus, and the total insured.
Importantly, health insurance coverage remains active during the grace period. It means policyholders can still file claims and receive coverage for medical expenses during this time, ensuring they are not left without protection.
These changes aim to make it easier for policyholders to manage their health insurance, providing a buffer period to renew their policies and maintain continuous coverage. It ensures policyholders are not penalised for minor delays and continue to benefit from their health insurance plans.
You may also like: From colonial legacy to global ambition: The Indian insurance sector
Rewarding no claim bonus options for policyholders
The IRDAI’s new rules introduce options for rewarding policyholders who do not make claims during the policy period. This reward comes in the form of a No Claim Bonus (NCB). At the time of renewal, the insured party has a choice in how they wish to receive their NCB.
The cumulative bonus is one option that raises the amount insured without raising the premium. It means that if you don’t make any claims, your coverage amount will grow over time, providing more financial protection.
A discount on the renewal premium is the alternate choice. It allows policyholders to reduce the cost of their insurance when they renew, making it more affordable.
Health insurance claims new rules on ombudsman awards
The necessity of adhering to insurance ombudsman awards is emphasised by the new regulations. Within 30 days of obtaining the award, insurers are required to abide by the ombudsman’s ruling. It guarantees that complaints from policyholders are handled quickly.
An insurance company will be penalised if they do not comply with the ombudsman award within the allotted period. The complaint will get a payment of ₹5,000 per day as a penalty is on top of any penalties already imposed by The Insurance Ombudsman Rules, 2017 for penal interest.
Settlement process for health insurance claims
The IRDAI circular outlines clear procedures for the health insurance claim settlement ratio and process. Without the consent of the Policy Management Committee (PMC) or the three-person review subgroup, no claim may be renounced. It ensures that health insurance claim forms are reviewed thoroughly before any denial.
If a claim is repudiated or partially disallowed, insurers must provide the claimant with detailed explanations. These details should reference specific terms and conditions of the policy document, helping policyholders understand the reason for the decision.
The necessary documentation must be obtained from healthcare facilities by insurance providers and Third-Party Administrators (TPAs). Policyholders are not required to submit these documents themselves, making the process more convenient and less burdensome.
For policyholders with multiple indemnity policies, the primary insurer will handle the claim settlement. If the coverage under the chosen policy is less than the claim amount, the primary insurer will coordinate with other insurers to settle the balance. This coordination ensures that policyholders receive the full claim amount without any hassle.
In the case of benefit-based policies, policyholders can claim from all insurers under all their policies, which allows them to maximise their benefits and ensures they are fully covered for the insured event.
Also read: All about health insurance schemes for a millennial investor
Bottomline
The new rules aim to make the health insurance experience smoother and faster for policyholders. By consolidating all entitlements in a health insurance policy, the new rules make it easier for policyholders to understand their benefits. The goal of this plan of action is to guarantee that policyholders receive prompt and effective service.
Additionally, these changes are part of a broader effort to enhance service standards in the health insurance sector. The IRDAI has revamped product and policyholder protection regulations across life and health insurance segments. This comprehensive update aims to provide a seamless and hassle-free claims experience, ultimately promoting trust and transparency in the industry.
