Claims and Wellness Management

Cashless Mediclaim transactions have been removed from the ambit of Service Tax with effect from May 1, 2011. ICICI Lombard Health Care will not deduct the service tax amount from the insured's Sum insured.

The said notification no. 30/2011 exempts the services provided by any hospital, nursing home, multi specialty clinic, doctors to any person covered by cashless health insurance policy scheme for any health check up or treatment from whole of the Service Tax.

Thus, w.e.f. May 1, 2011 such hospitals, nursing homes, multi specialty clinics, doctors shall not charge Service Tax on bills rose upon ICICI Lombard General Insurance Co. Ltd. And we shall not be paying for any such amount charged.

The same can explained with a simple example, as stated below:

Example 1:

Mr. Gupta bought a Health Insurance policy from ICICI Lombard, which covers him for Rs 2,00,000. Later, Mr. Gupta fell ill and needed to be hospitalised for 3 days. Since he had Health Insurance from ICICI Lombard and was admitted in one of the network hospitals, he was entitled to avail Cashless facility for the same. Mr. Gupta's total bill amounted to Rs 10,000 for which the Cashless authorisation was approved.

Now the Hospital, which provided the Cashless facility to Mr. Gupta, sends the bill to ICICI Lombard Health Care for the claim settlement of Rs 10,000. After investigation and some statutory deductions, ICICI Lombard Health Care settles the claim with the Hospital for Rs 9,000 (Rs 1,000 deducted for statutory non-payable items, co-payments and other reasons as per policy terms and conditions). ICICI Lombard pays the Hospital a total of Rs 9,000, since there is no longer any Service Tax amount being charged.

In addition, there is further good news for Mr. Gupta as his Balance Sum Insured will be Rs 2,00,000 - Rs 9,000 = Rs 1,91,000.

Example 2:

Mr. Sharma has a Health Insurance policy with ICICI Lombard for a Sum Insured of Rs 3,00,000. If his claim amount is Rs 2,80,000, then his balance Sum Insured will be Rs 20,000.

Earlier, when the Service Tax of 10.3% was levied on his claimed amount, Rs 28,840 would be the amount he would be liable for (Rs 2,80,000 x 10.3% = Rs 28,840).

However, with the service tax component no longer applicable, Mr. Sharma would have Rs 20,000 as his balance Sum Insured and that too without having to pay from his own pocket.

Mr. Sharma's remaining Sum Insured will stay Rs 3,00,000 – Rs 2,80,000 = Rs 20,000.

For any further queries, kindly email us at ihealthcare@icicilombard.com