Is Employee Group Health Insurance Compulsory in India?

In an evolving organisational culture, where employees work significantly impacts the performance of the business, it has become crucial to ensure the well-being of human resources. Employee health insurance is a common practice that an organisation considers for this purpose. Hence, most organisations these days offer group health policies to their workforce.

Although group health plans were not mandatory in India until recently, they were made compulsory after the nationwide pandemic lockdown in 2020.

This article will provide comprehensive information on an employee group’s health insurance, coverage, eligibility, and legal requirements.

 What Are Group Health Care Plans?

An employee group health insurance is a kind of health insurance that covers a group of people in the organisation or business firm. Unlike individual health insurance policies, group health insurance provides common medical coverage to all company members. The employer or business provides this insurance facility to employees working in the venture.

This insurance policy is also popularly known as Group Medical Cover (GMC). The employer pays the insurance premium for this as a benefit to the employee. It may be part of the total compensation made to the employee.

Just as businesses provide group health insurance policy for employees, they can also consider buying SME Insurance, which helps protect small and medium enterprises from losses. Trusted insurance providers such as Tata AIG offer comprehensive packages at an affordable rate.

 Indian Regulatory Norms for Employee Group Health Insurance

As per revised guidelines by the Ministry of Home Affairs, on 15th April 2020, companies were mandated to provide health insurance coverage to employees working in the business. IRDA has sent the circular regarding health insurance provision to be implemented from 1st April 2020.

After COVID-19, realising the emergency of the situation has been authorised by the government. For employees working with wages under Rs. 21,000 or less, ESI (Employee State Insurance) has to be provided. In contrast, for employees with compensation above Rs. 21,000 per month, GMC (Group Medical Cover) has to be issued. According to guidelines, all employers are supposed to provide medical insurance to their employees.

The IRDAI advised the non-life insurance providers to design comprehensive and affordable group medical insurance plans to suit the needs of the employer and the employees alike.

 Features of Employee Group Health Insurance

If you are an employer or employee, it is essential to understand the coverage under this policy. The following are the inclusions of the Employee Group Medical Insurance policy:

 Coverage for Diseases and Illness

Employee’s group health care plan covers many diseases and illnesses except pre-existing health conditions. The insurance provider compensates up to a predetermined amount for these medical expenses.

 Pre and Post Hospitalisation Charges

The employee group health policy includes pre and post-hospitalisation charges, such as ambulance expenses or after-discharge facilities. It is important to note that tests and mandatory medical processes to determine illness may or may not be covered under employee group health insurance.

 Coverage for Accidental Injury

Employee Group health insurance policy often includes coverage for accidental injuries. This may include medical expenses from accidents, including hospitalisation, medicines, surgeries and rehabilitation costs.

 Cashless Claim Settlement

Cashless claim settlement is an essential feature of employee group health insurance, where you do not have to pay upfront for your medical expenses if you are hospitalised in a hospital under the insurance company’s network. Here, the insurance company directly settles the claims with the hospital.

 Flexibility

Some group insurance policies offer flexibility in terms of including add-ons or adding family members to the employee insurance coverage. Typically, such plans offer coverage to dependents of the insured member like spouse, children and parent. Moreover, some plans may offer flexibility to add additional coverage at a cost.

 Cost-effectiveness

Compared to individual insurance, employer-sponsored group health policy is less expensive. The premiums are paid by the employer either fully or a part of it. Moreover, employees do not need to undergo medical tests to obtain coverage.

 Conclusion

Today, taking care of an employee’s health is very important for an employer. With the Indian government mandating health insurance coverage, employers now emphasise providing employee group health insurance. Employee group health insurance offers several benefits to employees, like tax benefits, cashless claims, treatment of diseases, etc. It is crucial to know such insurance policies as an employee in any organisation.

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