TCS Layoffs: Why Converting Your Group Health Policy to Retail Coverage Before Leaving the Company Can Be a Smart Move

Tata Consultancy Services (TCS) has reportedly planned layoffs affecting over 12,000 employees, creating uncertainty not just within the IT sector but across corporate India. Job loss doesn’t just impact income—it can also strip employees of key workplace benefits, one of the most significant being group health insurance coverage.

For employees whose group health policy covers their parents, this benefit is extremely valuable. Health insurance for senior citizens is often expensive and difficult to obtain. For this reason, converting your company’s group health insurance into a retail health policy before you leave the job can help safeguard your family’s health coverage.

Why Group Health Coverage for Parents Is Crucial

Many companies offer group health insurance that extends coverage to employees’ spouses and children, while some also include parents or parents-in-law. For employees with aging parents, this coverage is a lifeline.

Securing a standalone health policy for senior citizens in the open market is challenging because:

• Insurance providers are often reluctant to issue new policies for older individuals.

• Premiums for senior citizens are significantly higher than standard policies.

• Most policies impose a waiting period of up to three years for pre-existing conditions.

Losing access to group health insurance without a backup can leave families financially vulnerable in case of sudden medical expenses.

Converting Group Health Policy to Retail Policy

If you are leaving your job or facing layoffs, you have the option to migrate your group health insurance into an individual (retail) policy.

The Insurance Regulatory and Development Authority of India (IRDAI) mandates that insurers must allow policyholders to switch from group to individual coverage with the same sum insured and similar benefits.

Key benefits of converting to a retail policy include:

Waiting Period Credit:

• If your parents’ group policy covered pre-existing conditions for two years, after switching to retail, the remaining waiting period would be reduced.

• Example: If the original waiting period was three years and two years are already completed under the group plan, only one year of waiting remains under the new policy.

Continuous Coverage:

• By migrating rather than buying a new plan, you avoid lapses in coverage that could leave your family exposed to medical risks.

Better Access to Claims:

• Senior citizens may find it difficult to get fresh approval for new policies. Migrating ensures uninterrupted benefits with fewer medical underwriting requirements.

Alternative: Buying a New Policy

You can also consider purchasing a new health insurance policy after leaving the company. However, this approach has drawbacks:

• Long waiting periods for pre-existing conditions (often 3 years).

• High premiums for senior citizens.

• Limited immediate coverage, which can be risky if a health emergency arises soon after job loss.

Things to Check Before Switching

Before migrating your policy:

• Contact your HR department to understand the procedure and timeline for policy migration.

• Check waiting period rules and confirm whether they will be carried forward.

• Compare benefits between the current group plan and the prospective retail plan—some benefits may differ.

• Ensure no coverage gap occurs during the switch.

Bottom Line

With large-scale layoffs like those at TCS, protecting your family’s health coverage becomes as important as securing new employment. Migrating your group health policy to a retail policy before leaving ensures your parents and dependents remain protected, while also reducing the waiting period for pre-existing conditions.

Taking this proactive step can save you from high medical costs and the stress of navigating the insurance market at a time of job transition.