In today’s world, where having good health is a priority for everyone, obtaining health insurance free of cost is a blessing. Group health insurance is one type of business insurance policy that employees can obtain from their employers. However, the question arises: Is group health insurance mandatory for employers to provide? Knowledge of this information is crucial for both employers and employees, as it benefits them in various ways.
Is Group Health Insurance Mandatory in India?
Yes, group health insurance is mandatory for employees in India. According to Indian government regulations, group health insurance became mandatory following the onset of the COVID-19 pandemic. The Ministry of Home Affairs made it compulsory for employers to provide a group health insurance policy to their employees as part of their guidelines issued in May 2020.
These directives were implemented after the health risks to employees were identified during the pandemic. The government aims to ensure that all employees have access to a medical facility in the event of an emergency. Since then, group health insurance has become a crucial component of workplace compliance and is provided to all employees, including contract workers and part-time staff.
Legal Framework for Group Health Insurance
Although the pandemic is unfolding rapidly, the implementation of group health insurance has been underway for some industries that were already required to provide health insurance to their employees. For example, industries governed by the Employee State Insurance Act do offer health insurance. However, ESI only applies to companies with more than 10 employees and those with a monthly salary of ₹21,000 or less per employee.
Industries outside the scope of Employee State Insurance are required to provide group health insurance to their employees. Post-pandemic, most organisations have started providing this coverage voluntarily to comply with the law and ensure employee well-being.
Benefits of Group Health Insurance for Businesses
Attracts Superior Talent
The current job market is highly competitive, and employees are looking to work for organisations that appreciate them. Providing group health insurance helps an organisation attract quality talent, as they are assured of their safety while working.
Cost-Effective Coverage
Group health insurance is a cost-effective method which provides good medical coverage to employees. The premium of this policy is quite affordable as the risk is distributed among the group of people. Moreover, the employer’s contribution towards the premium can be counted as tax-deductible, providing a greater financial benefit to organisations.
Compliance With Rules
Group health insurance has become mandatory in many corporations, particularly following the COVID-19 pandemic. Providing health insurance to employees is not only a goodwill gesture but also a legal requirement that organisations must meet to avoid penalties from the government.
Employee Productivity
Employees who receive incentives, such as group health insurance, to safeguard their well-being are more motivated towards their work. It reduces absenteeism in the workplace and enhances productivity and employee morale.
Benefits of Group Health Insurance for Employees
Free Health Coverage
Group health insurance offers employees medical coverage at no cost at all. The employees do not have to contribute any amount towards the premium, as the employer makes the whole contribution. Moreover, several group health insurance policies also extend the coverage to employees’ dependent family members.
Best Medical Coverage
The facilities provided under the group medical insurance are the best at its price. It includes coverage for hospitalisation expenses, doctor’s consultation fees, medicine costs, etc. With comprehensive medical coverage, employees can get the best healthcare services instantly during any emergency.
Annual Heal-Check Costs
Group health insurance also provides the benefit of preventive annual health check-ups. Through these check-ups, employees will be able to detect any symptoms of critical diseases early and take precautionary steps. The insurance covers the cost of these annual check-ups.
Features of Group Health Insurance
- Group health insurance provides collective coverage to all the members covered under the plan. It means the same coverage for all employees regardless of their age, socio-economic condition, health history, gender, etc.
- Several group health insurance plans provide coverage to the family members of employees. It includes their spouse, children, and dependent parents as well.
- The premiums for this business insurance policy are lower than for individual insurance. The reason for lower premiums is that the risk is distributed among all the group members.
- Group health insurance involves significant involvement from both the employer and the insurer, as it is the employer who purchases the policy for employees. Thus, they are the ones who handle all the administrative tasks on the employee’s behalf.
Summing Up
Now, employers and employees both have the answer that group health insurance is mandatory in India. The plan is beneficial for both parties, as it provides medical coverage to employees and enables employers to avoid penalties resulting from compliance issues.
However, employers must thoroughly compare their options before purchasing any group health insurance and choose a reputable insurer, such as TATA AIG, which has a history of positive claim settlement reviews. A profitable business insurance policy benefits your employees and comes within the business’s budget.
Also Read: How Investigators Catch Fake Health Insurance Claims
