Should You Shift from ESI to Group Health Insurance?

Employment comes with several challenges, although it does provide revenue but at the time of severe emergency sometimes that revenue does not provide enough aid. This is the reason why ESIC or group health insurance is demanded by the employees to safeguard their future against eventuality.

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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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Difference Between ESIC and Group Health

ESIC is applicable for employees salaried below ₹15000 per month. Both the employer and the employee have to pay the premium under this scheme. The coverage under this scheme is provided for sickness, maternity, death due to employment, temporary or permanent disability, diseases contracted from the workplace, or any injury causing loss of earning capacity of the employee.

Group health insurance is available for a group of employees and they can buy it as per their own requirements. They can customize it based on their future needs such as free health check-up, ambulance charges, no room rent capping, maternity benefits, and additional personal accident cover.

Following are the points of comparison between ESIC and Group health insurance:

Sum Assured Cap: Under group health insurance, in case of expenses incurred for the treatment of accident of the employee, there is a definite sum assured and you can buy additional benefits to enhance the overall coverage by paying a pocket-friendly premium amount. Under ESIC there is no limit for sum assured

Cashless Benefits: Both ESIC and Group health insurance provide cashless medical treatment. However, the facility is very limited and thus available only at few government-owned hospitals, and in case of emergency, only a few network hospitals offer this benefit under the ESIC scheme. The group health insurance offers this benefit at a wide range of hospitals.

Why Must One Shift from ESIC to Group Health Insurance?

ESIC does provide coverage in the case of an emergency; however, the group health insurance policy provides additional benefits that are not covered under the ESIC. Moreover, the employee also pays a certain amount from their salary for ESIC. But under Group medical plan, the premiums are paid by the employer.

The group health insurance can be applied for the employees who earn a salary of more than ₹21000.

It is advisable to discuss with the employer the basic requirements and eligibility for group health insurance.

Following are some factors that make it a must to opt for a group health insurance:

1. Free Health Insurance

The policy comes with free benefits for the employees as they are not required to pay the premium for this insurance. It is the employer who pays the premium as a prerequisite to their employee for working with his/her company. Under this, the employee gets health coverage for their family members as well.

2. Good Coverage

You don't have to think even for once that since the policy is free for you the quality of the benefits is compromised. It is certainly not like that. The premiums are getting paid by the employer and thus the benefits are there to serve the purpose right.

The common features of group health insurance include:

  • It provides coverage against Covid-19
  • There is no waiting period
  • It provides OPD (Out-patient treatment) cover
  • It provides coverage for hospitalization expenses
  • It comes with the facility to book lab tests
  • It offers free of cost teleconsultations with medical professionals

3. Track The Process

With the help of group health insurance, the employees can keep the track of their treatment and meet their fitness goals if any.

How Do You Qualify for Group Insurance?

Insurance Regulatory and Development Authority of India (IRDAI) defines 'group' as:

  • employer-employee
  • non-employer-employee groups

The second can be formed by individuals of the same welfare associations, borrowers of a bank, customers of a specific business where insurance is provided, or professional societies.

Both types of groups can apply for the group health insurance and avail its benefits as and when required.

Eligibility Criteria for Group Health Insurance

The minimum number required to form a group and apply for group insurance is 20. It also offers an option to include the dependent family members of the employee to make the count complete.

It is advisable to check the terms and conditions of the insurer before applying for group medical insurance as the eligible minimum number varies from insurer to insurer.

Who is Not Eligible for Group Health Insurance?

Just like every other insurance policy, group health insurance also comes with some limitations. Following are the factors that affect the eligibility criteria:

Sole Proprietor

A sole proprietor without employees is not eligible for group health insurance. If someone happens to have a small business with no employees, they can purchase an individual health insurance plan to safeguard their future against any unforeseen event.

Family Business

As per the law, the spouse is not considered as an employee that is why an employer with a family business is not eligible for a group insurance plan.

Understanding the Goal of Purchasing Group Health Insurance

As per the IRDAI, one is not permitted to form a group merely for the purpose of buying low-cost health insurance coverage. If someone tries to negotiate the premium cost with the insurer before forming a group, it would be considered as a non-legitimate group.

The Final Word

Usually, the employees already covered under the ESIC scheme within the company are not given coverage under the group health insurance policy. Also, if one wishes, they can ask their employer to shift them from ESIC to group health insurance. If the employee is earning more than ₹21000 then they can get covered under the group health insurance policy.

Written By: PolicyBazaar - Updated: 04 August 2022
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