Group insurance

What it means

Group insurance is cover a company takes out for several employees at once under a single insurance contract, such as accident, life or supplementary health insurance. Thanks to the volume it is usually cheaper than individual policies and often requires no detailed health questionnaires.

For employers it is a popular benefit that strengthens loyalty and employees' sense of security. Cover can include permanent consequences of injury, incapacity for work, hospitalisation, disability or death, or access to premium healthcare.

It must be distinguished from statutory employer accident insurance, which the employer pays compulsorily to the Social Insurance Agency. Group insurance is voluntary commercial cover that supplements statutory benefits.

How it works in practice

The tax treatment depends on who is insured and who the beneficiary is. Premiums the employer pays for employees where benefits go to the employee or their family are usually a taxable benefit in kind for the employee and may be subject to contributions.

When choosing, compare the scope of cover, exclusions, waiting periods and what happens when an employee leaves, for example whether they can keep the cover individually. How easily employees can report claims also matters.

Employees should receive clear information on what the insurance covers and what to do when something happens. A benefit employees do not know about brings them no value, and the company pays for something nobody uses.

What to watch out for

If the employer forgets to include the premium value in payroll, taxes and contributions are miscalculated and must be paid with a penalty after an audit. The payroll accountant needs to know about the group insurance and account for it correctly.

Insurance involves processing employees' health data, which belong to special categories. The employer should not learn more about medical events than necessary; communication about claims is best left directly between the employee and the insurer.