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Considering the current medical inflation, health insurance can be a crucial tool to meet the exuberant costs arising from a medical emergency. However, a majority of people in India still do not have any type of health insurance coverage.
Only 40 crore individuals in India have some kind of health insurance protection. Out of this, only 6.7% of urban households have a member who has an employer-sponsored Group Health Insurance. This is an alarming state as the rising healthcare costs can expose individuals to financial threats and unprotected.
To reduce the cost burden and to promote health insurance usage, the Indian government has introduced various policies and regulations. One such regulation is that organisations with more than 7 employees must enroll their teams on a group health insurance plan. In light of this regulation, many organisations are actively incorporating health insurance coverage in their employee benefits package.
The businesses that do provide corporate health insurance observe a growth in productivity and employee engagement. There are many such benefits of getting group health insurance for both employers and employees.
If you are planning to provide your employees a group health insurance coverage then you must know about its workings and eligibility criteria to get the most optimal plan for your team.
What Is Group Health Insurance?
Group health insurance is a type of health insurance coverage that is provided to a group of people, typically members of an organisation or employees of a company. A group policy covers various individuals who get uniform healthcare benefits regardless of their age, gender, seniority, and geographical location. Because this type of policy is offered to many, the risk of claims made to the insurer is reduced. This is why the premium cost for a group health insurance policy is lower compared to an individual health policy.
Some of the key features of a group health insurance policy are:
- The same coverage is provided to all eligible members of the group. In the case of an organisation, the covered members are employees and occasionally their dependent family members.
- Most group health insurance policies are employer-sponsored, which means the employer pays for the policy premium but the employees are the policyholder till their term of employment. The employer can also opt to share the premium cost with employees depending on which works best for payroll.
- Most group policies cover pre-existing conditions from day one, this is not the case for individual health insurance policies.
- Group health insurance plans also provide a network of hospitals where employees can get cashless treatment, which means that the insurance company directly settles the bill with the hospital.
- The premium paid for group health insurance policy is considered a business expense and is therefore tax deductible under section 37(1) of the Income Tax Act.
- There is no waiting period for policy utilisation in most group health insurance plans. This allows employees to use health insurance coverage from day one.
Who Can Buy Group Health Insurance Policy In India?
1. Small Businesses and Startups
Most small businesses and startups in India face tough competition when it comes to making their business stand out. By offering competitive benefits like comprehensive group health insurance to employees not only can they attract and retain top talent but they can also build a reputation for their brand.
2. Fast-Growing and Mid-Size Companies
Most mid-size companies reach a point of stagnation where setting workplace culture becomes imperative. Providing competitive benefits to employees can create a people-first culture and help with reputation building, creating a lasting impact on business growth. Many fast-growing companies observe higher attrition and volatility.
By providing group health insurance to employees, these organisations can reduce attrition and build more loyalty among the workforce.
3. Established Organisation
Candidates applying to established organisations care more about benefits and culture than they do about the pay scale. Established organisations can face tough competition at the time of hiring skilled employees.
They can attract top talent by providing comprehensive health and wellness benefits that are a notch better than their counterparts. Additionally, due to their scale of operation, large organisations can get group health insurance at highly competitive rates.
4. Societies, Clubs, and Associations
Registered societies and associations can also avail the benefits of group health insurance. The insurance coverage helps existing members avail quality healthcare and also attracts potential members to join the societies and welfare associations.
In fact, most of these community-based groups market group health insurance as a member-exclusive benefit to make joining groups more lucrative and appealing to non-members.
5. Contractual and Part-Time Workers
More recently India has seen an increase in the number of contractual and part-time workers. More people are opting to work flexibly and remotely. Organisations hiring a diverse pool of talent can now provide health insurance benefits to part-time employees as well.
Eligibility Criteria for Group Health Insurance in India
If you can categorise your business in any of the aforementioned groups then you are eligible to apply for a group health insurance plan. According to the government rule, businesses with more than 20 employees are required to get group health insurance.
However, the IRDAI has recently laid down guidelines for businesses with a minimum of 5 employees who wish to apply for GHI, can get micro-insurance plans for their teams.
In addition to this, these are some more requirements for getting group health insurance in India:
1. Definition of a Group
According to the insurance regulator IRDAI, the “group” in Group Health Insurance can either be an employer-employee group or a non-employer-employee group. The non-employer group has to have a common interest. For example – a sports group or a social welfare association are also eligible to apply for group health insurance.
2. Minimum Number of Employees
The minimum number of members in a group health insurance should be 20. You can either have more than 20 employees forming a group or 20 members that include employees and their respective family members. However, this clause can differ from insurer to insurer.
For example – Onsurity provides group health and wellness benefits to teams with as few as 3 employees.
3. The Intention of Buying Group Health Insurance
As per the IRDAI guidelines for group health insurance, if you negotiate the price with the insurer before forming a group, it will be considered not legitimate and will therefore not be eligible for group health insurance. Ideally, a group of members engaged in an economic activity or having a common interest are only eligible to purchase a GHI policy.
Who Is Not Eligible for Group Health Insurance?
1. Solopreneurs
A self-employed small business owner with no employees can not buy a group health insurance plan. As mentioned above a minimum of 20 employees or members sharing a common interest is the only kind of group that is eligible to opt for group health cover. You can alternatively opt for individual health insurance and customise the policy as per your requirements.
2. Family Business
Only when a family business is made up of both family and non-family members then they can opt for a group cover. And in case the family business exclusively only consists of family members then they are deemed not eligible for group health benefits.
However, they can purchase a family floater plan or separate individual health insurance policies to get health coverage. Both of these plans are also eligible for tax deductions under section 80D.
Suggested read: Top 5 Group Medical Insurance for Family
Top 5 Benefits Of Group Health Insurance
1. Financial and Health Security
Healthcare costs in India are rising at an annual rate of 14%. This makes paying for certain treatments and surgeries financially taxing. It is becoming nearly impossible for middle-income households to afford quality healthcare due to the exuberant medical costs.
This is where providing group health insurance to your employees can be fruitful as it can offer financial and health security to employees and their family members.
2. Reduces Absenteeism
Illnesses and injuries are the most common reasons for absenteeism at workplaces in India. When your team is not dwindling with sickness and stress they are more likely to be present at work.
Also, when employees get the best healthcare facilities they recover faster and rejoin their place of work sooner. Getting them medical coverage is one way to ensure it. Group health insurance policies offer comprehensive health coverage that can take care of most medical and wellness needs of the employees.
3. Pre-Existing Conditions
Indians are most prone to certain health conditions, like – diabetes, hypertension, respiratory illnesses, etc. However, most individual health insurance policies come with a long waiting period for pre-existing conditions or they do not protect against certain pre-existing conditions.
Group health insurance on the other hand has no such waiting period or coverage restriction for pre-existing conditions. Coverage for pre-existing conditions can help employees avail treatment from day one of the policy.
4. Tax Benefits
Another crucial benefit of corporate health insurance is that the premium paid towards this type of policy is tax deductible. Both the employer and the employees can claim tax deductions on the premium paid towards the group health insurance.
The employers can claim a deduction for this business expense under section 37(1) and the employees (if they contribute toward the premium payment) can file for deductions under section 80D of the Income Tax.
5. Workplace Productivity
Employee benefits have been time and again linked with productivity and improved morale at work. Happy and healthy employees are the most productive and engaged at work. When you provide health insurance to your employees, they tend to feel more assured and financially secure. They feel more dedicated towards their jobs, contributing more and being more present.
Now that we know what group health insurance is and what are the benefits of getting them, let’s talk about who can buy a group health insurance policy and what factors determine the eligibility of whether or not a group can avail health insurance benefits.
Also read: 10 Reasons Why Companies Should Offer Health Insurance To Employees
Onsurity – The Most Affordable Group Health Insurance Plus Wellness Benefit
Now that you know what are the requirements for purchasing group health insurance then let us introduce you to the most comprehensive and affordable group health coverage.
At Onsurity, we believe that quality healthcare should be accessible to all. And to democratise health insurance, we have made highly customisable and lucrative group health and wellness plans for business teams of all sizes.
Additionally, you do not need to lock in your working capital for an entire year in group health insurance premiums. You can get Onsurity health and wellness benefits for your team on a monthly subscription basis with membership starting at just Rs. 145 per employee.
FAQs
1. How many employees do you need for a group policy?
According to IRDAI, a minimum of 20 employees or members are required to form a group to be eligible for a group health insurance policy. However, businesses with as few as 3 employees can also get a group health insurance plan from Onsurity for a monthly subscription of Rs. 145 per employee.
2. Who is eligible for group insurance cover?
Members forming a group to contribute to an economic activity or for a shared common interest are eligible for group health insurance cover.
3. Does group health insurance cover family members?
Yes, Most employers provide group health insurance to employees and their family members. Alternatively, the employees also have the option to add their dependent family members to avail of their group policy benefits at a nominal cost.
4. Can employees claim tax deduction for group health insurance?
Employees can only claim a tax deduction for group health insurance policy if they have made a partial payment towards the insurance premium.
5. What are group insurance plan requirements for small businesses?
Small businesses with a minimum of 20 members (can include both employees and dependent family members of employees) are eligible for GHI policy. Or small businesses with a minimum of 3 employees can buy an Onsurity health and wellness package that includes health insurance coverage.
6. Which type of group is not eligible for group health insurance?
Solo entrepreneurs and family businesses consisting of only family members are not eligible for group health insurance.