Is Group Health Insurance Compulsory For Employees?

Group health insurance is the best way of helping your employees pay their hospital bills without them spending their savings. For this employer have to pay a premium amount annually and the insurance company provides financial aid to the employees insured under the plan. So, technically employee gets insurance coverage for free. Also, a group health plan has been recently made mandatory for the employees.

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*Premium starting from ₹110/Employee/Month for ₹1 Lac Sum Insured covering Health & Wellness Needs (excluding GST)
#Premium may vary on the basis of coverage type & add-ons
**All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

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Is Group Health Insurance Mandatory In India?

After the outbreak of Covid-19, the whole world has been through the worst of times. Countless lives were lost due to this deadly virus and almost everyone fell sick. The offices were closed and people were sent to work from their homes. The government enforced countrywide lockdown for months.

Insurance companies were ordered to design a covid-19 specific insurance plan by the IRDAI. Once the covid-19 specific insurance plans were out in the market, the group health plans were made mandatory post the Covid-19 lockdown in 2020.

Before getting ahead, here is a quick explanation of a group health plan:

  • When you purchase health insurance just for yourself, it is an individual health plan.
  • When you purchase health insurance for your family, it is a family floater plan.
  • When you as an employer purchase a health insurance plan for your employees, it is a group health insurance plan.

Basic Coverage Provided By Group Plan

The employees of a company can get free medical facilities if the company they work for provides a group health plan. It is because the premium amount is paid by the employer. The insurance plan comes with a limit as per the company’s affordability. The plan provides cover for hospitalization expenses if the employee gets sick or gets injured.

No specified rule mandated group health cover before 2020. After the Covid-19 lockdown, IRDAI introduced new rules and regulations. The updates are as follows:

  • IRDAI on April 1, 2020, issued a circular and made medical insurance mandatory for the employees.
  • Post lockdown the companies were asked to offer an insurance plan that could provide medical coverage so that a healthy workforce can go on.
  • The circular was issued by the IRDAI to the Insurance companies in order to implement the orders of the Ministry of Home Affairs.
  • IRDAI advised the non-life insurance companies to design a simple worded, affordable comprehensive insurance plan.

There are employer-sponsored health plans that are employee-specific. Let us move on to tell you about these plans.

Employee State Insurance & Group Health Insurance

The employees working in an organized sector in India are provided with a medical insurance plan. The medical plan is provided under the Employee State Insurance Act, 1948. The employee who work on a monthly salary of Rs. 21,000 or less can avail of the Employee state insurance. Under this insurance plan, both employer and employee have to contribute to the ESIC. Whenever required the employee can get the benefits provided by the corporation.

Since ESI is provided to the employees working on a monthly wage of Rs. 21,000 or less but the employees with monthly wage above Rs. 21,000 are provided with the group health plan. In case you want to learn more about the insurance plan you can talk to your company’s HR.

What Does A Group Health Plan Provide?

A group health plan provides several benefits to the employees of a company. They are as follows:

Free Coverage For Medical Expenses

Since the group health plan is provided by the employer and the premium amount is also paid by the employer hence the medical expenses coverage comes for free. The group health plan also provides cover for the dependents of the insured employee.

Easy To Monitor

You can easily monitor your health insurance plan’s status. Since everything is done online, you can easily monitor your insurance plan’s status. Also, you can contact your company’s HR for a better understanding.  

Quick Claim Settlement

The group health plan provided by the company offers great coverage and when it comes to claim settlement, the employee does not have to go through much hassle and the claim settlement is done easily since the expense settlement is done between the insurer and the employer.

Conclusion

After the outbreak of Covid-19, the government made it mandatory for all corporate companies to provide group health insurance policy so that employees can work without stressing about unforeseen medical expenses. However, when it comes to purchasing the right insurance plan, it is advised to purchase the plan online because it is cost-effective and you can calculate the premium rates of the desired plan online using the online premium calculator.

Written By: PolicyBazaar - Updated: 27 August 2021
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