Table of Contents
Common Roadblocks for SMEs
- Budget Constraints: High premiums make insurance seem unaffordable.
- Lack of Awareness: Many SMEs don’t fully understand available options.
- Confusing Policies: Hidden exclusions and fine print create uncertainty.
- Cost vs. Coverage Dilemma: Cheaper plans often mean high out-of-pocket expenses.
- Difficult Claims Process: Low settlement ratios reduce trust in insurers.
How This Guide Helps
- Breaks down group health insurance in simple terms.
- Helps SMEs balance cost and employee well-being.
- Provides actionable steps to select the right plan with confidence.
Let’s dive in!
Understanding Group Health Insurance in India
How Group Health Insurance Works
Key Benefits:
- Cost-effective: A single policy covers multiple employees, lowering per-person costs.
- Comprehensive Coverage: Includes hospitalisation, doctor visits, medications, and sometimes preventive care.
- Simplified Administration: The employer manages enrollment and claims, reducing employee effort.
Who Can Buy Group Health Insurance?
- Employers (Startups & SMEs): Companies with at least 3 employees can offer group health insurance.
- Associations & Societies: Non-employee groups with a minimum of 50 members can buy insurance.
- Micro-insurance Plans: Made for businesses with fewer than 5 employees, so small teams can also get coverage.
Why Employers Should Offer Group Health Insurance?
- In India, the IRDAI mandates that companies offer health coverage to employees. Staying compliant avoids legal risks and builds employer credibility.
- In a competitive job market, health benefits are a major hiring advantage. Candidates prioritise companies that offer security beyond salaries.
- Prioritising employees’ health makes them feel valued. This leads to higher job satisfaction and lower attrition rates.
- A healthy workforce means fewer sick days and better focus. This boosts performance and productivity and cuts absenteeism.
- Managing one group policy is more straightforward and less costly than reimbursing each employee separately.
- Premiums paid for group health insurance are tax-deductible under Section 37(1). This reduces taxable income.
By offering group health insurance, SMEs and businesses win. They protect their workforce and build a stronger, more competitive organisation.
Also read: Why Companies Should Offer Health Insurance To Employees?
Why Choosing the Right Group Health Insurance Plan is Crucial?
For Employers: Why It Matters
- Legal Compliance & Risk Mitigation: IRDAI mandates health coverage in India. Choosing the right plan keeps your business compliant and avoids legal issues.
- Better Employee Retention & Hiring: Competitive health benefits attract top talent. They reduce turnover and save on recruitment costs.
- Cost-Efficiency & Better ROI: The wrong plan = high out-of-pocket costs for both employer & employees. The right plan balances affordability with comprehensive coverage.
- Simplified Administration: A good plan cuts paperwork and speeds up claims. It saves HR’s time.
- Customisable Coverage for Employee Needs: A one-size-fits-all approach doesn’t work. The right plan offers flexibility to match workforce demographics.
For Employees: Why It Matters
- Covers hospital stays, maternity, and day-care treatments. It reduces out-of-pocket costs.
- Group policies often waive waiting periods, unlike individual plans. This ensures employees get benefits from day one.
- Big insurer networks allow cashless treatment at top hospitals.
- Some plans cover spouses, children, and parents. They offer peace of mind beyond just employees.
Choosing the right plan is about balancing cost, coverage, and ease of access. A well-structured policy empowers employees, strengthens businesses, and ensures long-term sustainability.
Suggested read: Benefits of Group Health Insurance
Key Factors to Consider When Choosing a Group Health Insurance Plan
1. Coverage Benefits
Secret Tip: Choose plans that cover pre-existing conditions without waiting. Onsurity’s group health insurance plans provide such benefits. They protect employees from day one.
Add-ons: Look at optional benefits such as dental and vision care, wellness programs, and preventive services. These can boost the overall value of your insurance plan.
Secret Tip: Choose insurers that offer customisable add-ons, allowing you to tailor the plan to your team’s specific needs. Onsurity provides flexibility in selecting add-ons, ensuring comprehensive coverage.
2. Premium Costs
Secret Tip: Consider insurers like Onsurity. They offer low-cost monthly subscriptions, starting at ₹145 per employee. This is feasible for micro-to-medium enterprises.
3. Network Hospitals
Secret Tip: Choose insurers with a vast network. For example, Onsurity’s group health plan has over 10,000 network hospitals. They enable cashless treatments across India.
4. Claim Process
Secret Tip: Choose insurers with a simple digital platform. They should also offer end-to-end claim assistance for easy claim submissions. Onsurity’s Super App ensures a smooth claims process. It provides real-time tracking and timely reimbursements.
5. Customisation Options
Secret Tip: Choose insurers like Onsurity. They offer tailored group health plans. You can adjust coverage and add-ons to suit your team’s needs.
6. Insurer’s Reputation
Secret Tip: Check for testimonials and case studies from clients. They will show the insurer’s reliability. Onsurity is trusted by more than 8,000 companies. This shows their strong credibility in the market.
7. Wellness and Preventive Care
Secret Tip: Opt for insurers that bundle wellness benefits with health insurance. Onsurity offers health insurance with wellness benefits. These include a discounted pharmacy, diagnostic services, and gym memberships, among others.
8. Regulatory Compliance
Secret Tip: Work with insurers who prioritise transparency and compliance. They should provide clear documentation and support. Onsurity ensures its plans meet IRDAI rules. This gives employers peace of mind.
9. Waiting Periods
Secret Tip: Choose plans with little or no waiting for pre-existing conditions. Onsurity’s group health insurance often provides immediate coverage, eliminating waiting periods.
10. Co-payment and Deductibles
Secret Tip: Pick plans with no or low co-pays to ease employees’ costs. Onsurity designs its plans to minimise out-of-pocket expenses for members.
By weighing these factors and using the secret tips, you can choose a group health insurance plan. It should offer good coverage, fit your budget, and meet your employees’ healthcare needs.
Also read: Group Health Insurance for Small Business
Step-by-Step Guide to Buying Group Health Insurance
Step 1: Assess Your Employee Needs
- Workforce demographics: Consider age groups, health risks, family needs, and job roles.
- Coverage Priorities: Identify key benefits of hospitalisation, maternity, wellness, or mental health coverage.
Step 2: Research & Shortlist Insurers
- Compare insurers: Look at claim settlement ratios, customer reviews, and service quality.
- Check Plan Options: Insurers must offer flexible, customisable plans for all business sizes.
Step 3: Define Coverage & Add-Ons
- Core Coverage: Ensure it includes inpatient care, OPD, pre-existing conditions, and diagnostics.
- Optional Add-Ons: Consider dental, vision, teleconsultation, and preventive wellness benefits.
Step 4: Get Quotes & Compare Costs
- Request Quotes: Get premium estimates from multiple insurers.
- Check Cost vs. Benefits: A lower premium may raise employees’ out-of-pocket costs.
Step 5: Review Policy Terms & Exclusions
- Waiting Periods & Sub-Limits: Look for plans with minimal waiting periods and clear exclusions.
- Transparency in Policy: Ensure there are no hidden co-payments, deductibles, or restrictions.
Step 6: Finalise & Implement the Plan
- Choose the Best Fit: Pick the policy that best balances cost, coverage, and service.
- Seamless Onboarding: Work with the insurer to onboard employees smoothly with clear communication.
Step 7: Educate Employees & Track Benefits
- Conduct Awareness Sessions: Explain coverage details, claim processes, and wellness benefits.
- Track Use & Feedback: Gather employee feedback and review plan effectiveness annually.
A good health insurance plan protects employees, lifts morale, and strengthens your business. Follow these steps to secure the best policy without unnecessary complexity.
Also read: Top 5 Group Medical Insurance for Family
How to Evaluate Group Health Insurance Plans?
Top Factors to Compare Before Finalising
1. Coverage Scope
- Does the plan cover hospitalisation, OPD, maternity, diagnostics, and critical illnesses?
- Are pre-existing conditions covered from day one, or is there a waiting period?
2. Claim Settlement Process
- What is the claim settlement ratio? Higher ratios indicate faster and more reliable payouts.
- Does the insurer offer cashless hospitalisation or only reimbursements?
- How long does it take to process claims?
3. Premium Costs & Value for Money
- Compare premiums to coverage. Low-cost plans often have hidden costs or limited coverage.
- Are there co-payment clauses or deductibles that increase employee costs?
4. Network Hospitals & Accessibility
- Check the size and quality of the hospital network.
- Ensure that the major hospitals in cities where employees are based include themselves.
5. Flexibility & Customisation
- Can the plan be tailored to different employee groups (senior employees, families, etc.)?
- Are there options for add-ons like dental, vision, or mental wellness coverage?
6. Waiting Periods & Exclusions
- Look for plans with minimal or no waiting periods for essential treatments.
- Check for hidden exclusions, like disease-specific restrictions or sub-limits on certain treatments.
7. Wellness & Preventive Health Benefits
- Does the plan include annual check-ups, fitness programs, teleconsultations, or mental health support?
- Are there additional benefits like discounted medicines or diagnostic tests?
8. Regulatory Compliance & Tax Benefits
- Ensure the plan is IRDAI-approved and meets all legal requirements.
- Check if the premiums are tax-deductible for employers.
Red Flags to Watch Out For
- Low Claim Settlement Ratios – Indicates difficulty in getting claims approved.
- Hidden Exclusions – Unexpected coverage gaps can lead to high out-of-pocket expenses.
- Restrictive Network – Limited hospital coverage can cause inconvenience during emergencies.
- Long Waiting Periods – Delayed coverage for critical illnesses or maternity benefits.
A well-evaluated group health insurance plan balances comprehensive coverage, easy claims, and cost-effectiveness. Use this checklist to compare policies. Make a decision that benefits your business and employees.
Recommended read: Tax Benefits of Group Health Insurance
Cost of Group Health Insurance Plans
Key Factors Affecting Premium Costs
- Larger groups get lower per-employee premiums due to risk distribution.
- Smaller businesses may face higher costs unless they opt for micro-insurance plans.
2. Employee Demographics
- Older employees or those with pre-existing conditions may increase premium rates.
- A younger workforce may result in lower overall premiums.
3. Coverage Scope & Benefits
- Comprehensive plans with hospitalisation, OPD, maternity, and wellness add-ons have higher premiums.
- Plans with higher deductibles or co-payments tend to lower premiums but increase employee costs.
4. Claim History
- Companies with frequent high-value claims may see premium hikes at renewal.
- Businesses with a low claim ratio can negotiate better pricing.
5. Industry Type & Risk Exposure
- High-risk industries (construction, healthcare, etc.) often pay higher premiums.
- Corporate or desk-based jobs typically have lower premiums.
Also read: Employer Employee Insurance
Estimated Cost Ranges for Group Health Insurance in India
Business Size | Estimated Premium Per Employee (₹/Year) |
Small (2-50 employees) | ₹10,000 – ₹25,000 |
Medium (51-200 employees) | ₹7,000 – ₹18,000 |
Large (201+ employees) | ₹5,000 – ₹15,000 |
Note: Costs vary based on insurer, policy coverage, and custom add-ons.
How to Reduce Group Health Insurance Costs?
- Negotiate with Insurers – Compare quotes and negotiate better rates. Choose Wellness-focused Plans. They promote health and fitness. They can lower claims and premiums.
- Customise Coverage – Choose only necessary benefits to control costs. Adjust Sum Insured Smartly avoids over-insuring while ensuring adequate protection.
The key to finding the best-value group health insurance plan is to balance cost and coverage. By optimising plan features and choosing the right insurer, businesses can provide affordable, high-quality healthcare to their employees.
Common Mistakes to Avoid While Choosing a Plan
1. Focusing Only on Low Premiums
- The Mistake: The cheapest plan often means low coverage and high deductibles. It may also have hidden exclusions.
- The Fix: Balance affordability with full coverage to avoid high costs for employees.
2. Ignoring Policy Exclusions & Fine Print
- The Mistake: A one-size-fits-all approach can leave employees without key coverage, like maternity, mental health, and OPD.
- The Fix: Assess employee demographics and healthcare needs before selecting a plan.
3. Not Considering Employee Needs
- The Mistake: Ignoring exclusions, like sub-limits on room rent, co-pay clauses, and waiting periods for pre-existing conditions.
- The Fix: Carefully review policy terms, exclusions, and limitations before finalising.
4. Overlooking Claim Settlement Ratios
- The Mistake: Choosing an insurer with a low claim settlement ratio can result in delayed or denied claims.
- The Fix: Choose insurers with a strong, reliable claims record. It ensures hassle-free reimbursements.
5. Choosing a Plan with Limited Network Hospitals
- The Mistake: A small hospital network may lead to limited access to cashless treatment.
- The Fix: Make sure the insurer has a wide hospital network, especially in employees’ cities.
6. Ignoring Flexibility & Customisation
- The Mistake: Sticking to rigid plans that don’t fit all employees.
- The Fix: Choose policies with flexible add-ons, like dental and vision. Also, include wellness programs.
7. Failing to Educate Employees About the Plan
- The Mistake: Employees often don’t understand their benefits, so they use them less.
- The Fix: Run awareness sessions. Communicate clearly about coverage, claims, and wellness benefits.
Avoiding these mistakes will make your group health plan valuable. It will protect employees and optimise costs. Choose wisely to create a win-win for your business and workforce.
Suggested read: How Is Group Health Insurance Premium Calculated?
Top Group Health Insurance Providers in India
Insurer | Key Features | Best For |
Onsurity | Affordable, flexible plans starting at ₹145/month, wellness benefits, 10,000+ network hospitals. | SMEs & startups looking for cost-effective, digital-first insurance. |
Star Health Insurance | Large hospital network (14,000+), specialised disease-specific covers, no-claim bonuses. | Businesses seeking high hospitalisation coverage and customisation. |
Care Health Insurance | Extensive network (11,400+ hospitals), no upper age limit, wellness benefits. | Companies with a diverse workforce, including senior employees. |
HDFC ERGO | Quick claim processing, 13,000+ hospitals, wellness services, OPD benefits. | Organisations needing fast, reliable claims settlement. |
Niva Bupa (Max Bupa) | Covers pre-existing conditions after a waiting period, extensive hospital network, and digital claims. | Businesses prioritising pre-existing condition coverage. |
How to Choose the Best Group Health Insurance Provider?
- Compare claim settlement ratios – A high ratio ensures faster reimbursements.
- Check hospital network size – More hospitals = better access to cashless treatments.
- Review customisation options – Ensure the plan fits your workforce’s needs.
- Look for additional benefits – Some insurers offer wellness programs, OPD, and teleconsultations.
The best group health insurance provider depends on your business size, employee needs, and budget. Compare options carefully to ensure seamless healthcare benefits for your workforce.
How Onsurity Simplifies Group Health Insurance Selection
1. Affordable & Flexible Plans
- Budget-friendly pricing: Plans start at just ₹145 per employee per month.
- Monthly subscription model: No long-term lock-ins, making it easy for businesses to scale.
2. Comprehensive Health Benefits
- Hospitalisation Coverage: Cashless treatments at 10,000+ network hospitals.
- Wellness Add-ons: Teleconsultations, discounted medicines, health check-ups, and fitness programs.
- Pre-existing Condition Coverage: Available without long waiting periods.
3. Seamless Digital Experience
- Instant Policy Activation: Get coverage within minutes via the Onsurity app.
- Paperless Claims Process: Employees can file claims digitally with real-time tracking.
- 24/7 Support: Dedicated assistance for claims and healthcare queries.
4. Designed for SMEs & Startups
- Covers teams as small as 3 employees: Perfect for growing businesses.
- No hidden costs: Transparent pricing with customisable benefits.
Onsurity makes group health insurance simple, cheap, and digital-first. It ensures better healthcare access for businesses of all sizes. Onsurity offers customisable, no-hassle health benefits for your team. They work for both startups and established SMEs.
Conclusion: Secure Your Workforce, Strengthen Your Business
By focusing on complete coverage, simple claims, and low costs, businesses can make healthcare easy, stress-free, and helpful.
Your Next Steps
- Assess your team’s healthcare needs
- Compare insurers & plan options
- Select a plan that balances coverage & cost
- Communicate benefits clearly to employees
The right health insurance plan empowers your workforce. It fuels long-term success for startups, SMEs, and large enterprises.
Ready to choose the best plan for your team?
Compare top insurers today. Secure a healthier, more productive future for your business.
FAQs
1. What are the most common group health insurance plans?
2. What is the most popular type of group health plan?
3. Who can avail of group health insurance plans in India?
4. Can members of the group add additional coverage or family members?
5. How is the premium determined for group health insurance plans?
- Group size
- Age distribution
- Occupation risk
- Claim history
6. What is the typical coverage offered under group health insurance plans?
- Inpatient hospitalisation
- Pre and post-hospitalisation
- Daycare procedures
- Maternity benefits
- Pre-existing diseases
7. How do I choose the right group health insurance plan for my organisation?
- Understand the demographics and specific health requirements of your workforce.
- Evaluate plans from different providers to find the best fit.
- Ensure the insurer has tie-ups with reputable hospitals accessible to your employees.
- Opt for insurers with a high claim settlement ratio for hassle-free claims.
- Look for plans that allow tailoring of benefits to suit your organisation’s needs.