What is group health insurance?
Group health insurance is a single policy that covers all employees of an organisation under one master contract. Unlike individual policies where each person negotiates their own terms with an insurer, a group policy pools the risk of the entire workforce. The result is broader coverage, lower premiums per head, and fewer exclusions — making it the cornerstone of any meaningful employee benefits programme.
In India, group medical cover (GMC) is now the default expectation at most companies above 10 employees. Yet thousands of SMEs still operate without it, either because the process seems complex or because they underestimate its impact on hiring and retention.
How does it work?
The employer purchases a master policy from a licensed non-life insurer. Every employee named on the policy — and optionally their spouse, children, and parents — is covered for a defined sum insured. When a covered person is hospitalised, the insurer settles the bill either directly with the hospital (cashless) or reimburses the employee after discharge.
Premiums are calculated on the group as a whole rather than on individual health histories, which is why insurers are willing to cover pre-existing conditions from day one — a critical difference from individual retail policies that impose 2–4 year waiting periods.
Key inputs that determine your premium include:
- Group size — larger groups attract better per-head rates
- Age profile — a younger workforce means a lower risk pool
- Sum insured — typically ₹1 lakh to ₹10 lakh per employee
- Add-ons selected — maternity, OPD, dental, and mental health riders increase the premium
- Claims history — at renewal, your loss ratio shapes next year's pricing
What does a standard group health policy cover?
A baseline group mediclaim policy covers:
- Inpatient hospitalisation (minimum 24 hours) for illness or injury
- Pre-hospitalisation expenses up to 30 days before admission
- Post-hospitalisation expenses up to 60 days after discharge
- Day-care procedures that don't require 24-hour admission (cataract, dialysis, chemotherapy, etc.)
- Ambulance charges up to a defined limit
- Room rent (subject to limits — check your policy wording)
Common optional add-ons include maternity and newborn cover, OPD consultations, dental and vision care, mental health therapy sessions, and critical illness lump sums.
Why group health insurance beats individual policies for employees
Individual retail health plans in India come with waiting periods for pre-existing conditions, sub-limits on room rent and specific treatments, and copayment clauses that shift a portion of every claim back to the policyholder. Group policies routinely waive all three.
More importantly, employees who are covered by their employer don't have to worry about paperwork, policy selection, or premium outgo from their own salary. The employer bears the cost as a business expense — which is also 100% tax-deductible under the Income Tax Act.
What are the minimum eligibility requirements?
Most Indian insurers require a minimum of 7 employees to issue a group health policy. Some modern insurers, including Onsurity, support groups as small as 2 members. There is no upper limit — groups of several thousand are managed under a single master contract, often with sub-group structures for different business units or locations.
New joiners can typically be added mid-term on a pro-rated premium basis. Employees who leave the company are removed at the next renewal or immediately, depending on the policy structure.
How to get started
The process of buying group health insurance has become significantly simpler in the last few years. A digital-first broker or insurtech like Onsurity can quote, bind, and issue the master policy within 48–72 hours for groups under 100 employees. You'll need:
- A list of employees with names, dates of birth, and relationship (self/spouse/child)
- The desired sum insured and any add-ons
- Company GST registration or CIN
Once the policy is live, employees receive e-cards they can present at any of the insurer's network hospitals for cashless treatment. Claims administration — a historically painful step — can now be handled digitally through apps and dedicated claim support teams.
Group health insurance is not a luxury. It is the minimum standard of care your team deserves, and the single benefits investment with the clearest return on employee wellbeing and retention.