What is the Average Cost of Health Insurance for Small Business Owners in India? 

  • postauthorEditorial Staff
  • postdateDecember 1, 2021
  • postreadtime4 min read
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Small businesses are tightly-knit. Every employee becomes an indispensable part of the business. It’s only natural that you would want to take care of their health if something happens to them. Moreover, employees want to be part of small businesses that take care of their employees. That is why it makes sense for employers to offer health insurance to their employees. This article will explain about the average cost of health insurance for small business owners in India. Before that, we need to know some basic features of group health insurance.  

Features of Health Insurance for Small Businesses 

Cost of Health Insurance for Small Business Owners

Number of employees 

IRDA is the regulatory body for the insurance sector in India. It has stipulated that a business needs at least 20 employees to take a group health insurance plan. However, you can include the members of your employees in the plan so that there are at least twenty people covered. You can then opt for a group health insurance plan. For businesses that have less than 20 employees, they can opt for micro insurance policies. 

Medical cover for employees and their families 

Group health insurance covers the medical expenses of the employee, their parents, spouse, and children. You can get cover for pre-existing conditions and disorders as well. Premium insurance schemes also cover ancillary charges such as ambulance costs.  

In addition to the above, the expenses for treatments such as diagnostic tests, blood, OT charges, oxygen, anesthesia, and in some plans, chemotherapy as well. 

COVID-19 cover 

The pandemic has devastated the world. The situation is grim in India. Fortunately, almost all group health insurance schemes provide cover for COVID-related expenses. 


Most insurance companies have tie-ups with major hospitals. When you go to network hospitals, you will get cashless hospitalization. If it’s not a network hospital, then you will be reimbursed later. Additionally, in many schemes, employees can get coverage on the cost of seeing specialists and medical practitioners. 

Customized cover 

You can get additional cover depending on your organization’s needs. For example, businesses with female employees can get maternity coverage for their employees.  


  • You won’t get cover for alternative treatment options such as Homeopathy, Ayurveda, faith healing, etc. 
  • Many schemes don’t cover the medical expenses of parents, while some only cover if the parents are dependent on the employee. 
  • Corporate group health insurance employees are limited in nature. They do not provide comprehensive coverage. 
  • Congenital diseases are not covered in most cases. 

Tips for Choosing a Group Health Insurance Plan

Here are some things you should keep in mind when you are choosing a group health insurance plan:  

  • Carefully go through the scheme details before selecting one. Do not opt for a cheap plan just for the sake of having insurance. Usually, cheap plans provide the bare minimum. 
  • Make sure that the coverage is enough. It should help employees in case of medical emergencies and illnesses. A minimum of Rs. 5,00,000 coverage is suggested.  
  • Many insurance providers have networks with major hospitals. This ensures that you can get cashless hospitalization. Before selecting a scheme, check out the network of the insurance provider. See if there are reputed network hospitals in your city.  
  • Read policy details carefully before opting for one. There can be loopholes in the policy using which insurance providers can refuse coverage. 

Average Cost of Health Insurance for Small Business Owners 

The cost of health insurance for small business owners depends on the kind of scheme you choose and the customizations you make. Digit offers average health insurance cost per year at Rs. 1500 per employee. There is no age-based co-payment required. However, most insurance providers will be able to offer you a quote only after knowing specifics about your business.  

Every provider has different schemes ranging from affordable to premium. With premium schemes, you can get benefits such as expenses for diagnostic tests, x-ray, OT charges, oxygen, pre- and post-hospitalisation charges, etc. You will have to shell out more for premium schemes. However, it can be worth the money because of the coverage your employees will get.                  


Small businesses shouldn’t think twice about taking health insurance for their employees. They are the lifeblood of every organization and have to be taken care of in health emergencies.

Moreover, apart from offering only health insurance, a comprehensive healthcare plan has the added benefit of attracting and retaining employees even better. Onsurity’s healthcare plan is one such plan which comes with all benefits like group health insurance, discounted medicines, health checkups, fitness tracking, and more. It is perfectly designed for companies, SMEs, and businesses.

Contact us to get an instant quote today. 

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