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Is Group Health Insurance Mandatory for Employees in India?

By December 19, 2021January 22nd, 2022No Comments
Is Group Health Insurance Mandatory for Employees in India - PlanCover

Is it Mandatory For Employees to Have Group Healthcare Insurance in India?

It is pointless to deny that health is not the most precious possession of all humans. Especially with the outbreak of the deadly coronavirus, people have become more aware of the needs of healthcare. A little ignorance on your part can cause greater damages than you can imagine. 

Since 2020, there has been a steep rise in Mediclaim purchases. Not only in India, but people all over the globe are also acknowledging the need for a healthcare plan during medical emergencies. In such a scenario, the rate of purchase of group healthcare plans (commonly termed as employer medical insurance) has also increased. Is it mandatory now in India? Read along to know if it is legally mandatory for all employers to buy their employees a Mediclaim plan. 

What is a group healthcare policy?

Before getting into further details, understand what a group health insurance plan means. It is similar to an individual healthcare plan with an elementary difference. In group policies, the buyer is the employer and the plan coverage is enjoyed by the employees working in the company. It is more of a service benefit that an employer offers to the employees in the organization. 

The policy can also include the dependent family members of the employees like children, spouse, and parents (depends on the employer’s preference). The employee need not pay a penny for the annual renewal of the insurance but can enjoy the plan benefits provided to them under the limited insured sum.

Know about the current norms

Currently, it is compulsory for employers in India to offer healthcare insurance facilities to their employees. After the nationwide lockdown in India due to the pandemic, it has become a mandatory part. Before 2020, there were no such rules for small to mid-capacity organizations.

The circular posted by IRDAI on 16th April 2020 stated that all enterprises should purchase healthcare policies for service employees. However, there was no additional information mentioned in the circular to define the policy coverage and features. **

How is it different from ESIC?

ESIC or employee state insurance is also a similar healthcare program for employees in India. If an employee earns a monthly salary of less than Rs.21,00, they can avail of the ESIC facilities. This medical facility came into existence with the Employee State Insurance Act, 1948. The elementary difference between the ESIC facilities and the group healthcare plan is the payment aspect.

In ESIC, the employer and employee contribute to the annual premium charges to continue the insurance facilities. In contrast, group medical insurance is a service benefit that the employee enjoys without paying anything extra. The employer buys the policy and renews it yearly by paying the annual premium charges in due time. Only in the case of tailor-made group healthcare plans, there may be a provision for the employees to pay the extra amount to enjoy additional plan benefits. 

Basic coverage by the insurance

What is the purpose of making the group healthcare policy mandatory in India? The group policy is similar to any other individual plan where the policyholder can claim medical treatment expenses from the insurance company. Most employers offer an insured amount of Rs.1lac to Rs.3lacs per employee as a token of appreciation for their service. It motivates the employees to work better and retain their position in the company to enjoy the plan benefits provided to them. 

There are many group healthcare plan attributes depending on the policy you pick and, the insurance company. The basic healthcare plans offer cashless treatment and reimbursement facilities to the policyholders and, cover most expenditures caused by valid medical reasons or diseases. (limited to the insured sum and opted facilities)

Beneficial for employees

Group healthcare has been made mandatory in India post-lockdown by prioritizing the employee-welfare interest across all organizations in the country. The following policy features make the insurance a reliable resource for the employees during medical emergencies. They can attain financial support during sudden medical emergencies and planned treatments. Following are the most prominent reasons why the healthcare plans are beneficial for the employees and need of the hour amidst the pandemic – 

  • Free Mediclaim: Without any extra payment, the employees can enjoy quality medical treatment. It releases the excess financial burden from their shoulder with steady insurance support while medical requirements. The pandemic has made it even more essential for the increasing health threats all around the globe. 
  • Better facilities: An employee can now enjoy cashless facilities and treatment under the leading hospitals in India. Most insurance companies have a tie-up with the best hospitals in India to enable cashless treatment facilities for their customers. Hence, the policyholder (employees and their family members) can get hospitalized to avail of quality treatment without making a financial misery. 
  • Easy processing: The process of buying the policies or paying the premiums is highly convenient for employers. They can purchase it from any leading insurance company or through an insurance broker to get the best deal. For employees, the reimbursement procedure is also hassle-free. They can opt for e-claim methods to ensure a swift and simple claim settlement without stepping out amidst the pandemic. 
  • Affordable premiums: The employers can easily follow the IRDAI circular to provide the group healthcare policy for the affordable plans. The premium charges for employer group health policies are lesser than individual Mediclaim plans. There are also flexible payment options to ease the needs of employers. So, it does not create any financial burden on the employers. 

PlanCover – Answering all your queries.

Any employer or startup founder can purchase group healthcare policies for their employees. An organization having an employee strength of seven or more can buy the insurance. PlanCover, a leading name among the top insurance brokers in India, brings the best opportunity for employers. They offer the most beneficial healthcare plans within the budget to the small to mid-scale company owners having employee strength between 7 to 450. PlanCover has the best group health policies from the top insurance companies in India, registered under IRDAI. Connect to their team if you are searching for the right policy to purchase for your employees. 

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