Group Health Insurance glossary
Co-payment (Co-pay) in Group Health Insurance
Co-payment (co-pay) is the fixed percentage of an approved health insurance claim that the insured employee pays out of pocket, while the insurer pays the rest. On a group plan, a 10% co-pay means the employee bears ₹10,000 of a ₹1,00,000 approved claim and the insurer settles the remaining ₹90,000.
On a ₹1,00,000 approved claim, a 10% co-pay is the employee’s share at the hospital — the insurer settles the remaining ₹90,000.
How co-payment works in a group/employer plan
When you buy group cover for your team, the policy wording states whether a co-payment applies and at what rate — commonly 10% or 20%. The co-pay is applied to the approved claim amount, after the insurer has already removed non-admissible items and any sub-limit or room rent excess. Whatever share is left, the employee pays the co-pay percentage of it and the insurer pays the balance.
Co-pay is a cost-sharing lever, not a coverage cut — the treatment is still covered. Because the insured shoulders part of every claim, a higher co-pay lowers the premium the employer pays, while a zero co-pay plan costs more but gives employees a cleaner, out-of-pocket-free experience on approved claims.
Group policies can also scope the co-pay narrowly: applying it only to parents or older dependents, only to specific ailments, or only above a defined age band. The exact clause always lives in the policy wording, so confirm it before you communicate the benefit to your team.
A worked example (20% co-pay)
An employee is hospitalised and the final bill is ₹2,50,000. The insurer disallows ₹30,000 of non-medical items (gloves, admin charges), leaving an approved claim of ₹2,20,000. The plan carries a 20% co-payment.
Approved claim
Employee pays (20% co-pay)
Insurer pays (80%)
The employee also settles the ₹30,000 disallowed items, so their total out-of-pocket at discharge is ₹74,000. Swap the same claim to a zero co-pay plan and the employee’s share drops to just the ₹30,000 non-admissible items.
Why co-payment matters for employers
Co-pay is the quiet variable that decides how a benefit actually feels to your team. Two plans with the same sum insured can deliver very different employee experiences — one where a claim is effectively free, and one where a hospitalisation still lands a five-figure bill on a stressed employee.
It is also a budgeting tool. Adding or raising a co-pay is one of the cleanest ways to bring a premium inside budget without dropping the sum insured or cutting family cover. The trade-off is that you move cost from a predictable annual premium to an unpredictable moment — the day an employee is in hospital.
The risk is a communication gap: if employees discover the co-pay only at the billing desk, the benefit can generate resentment rather than goodwill. Whatever rate you choose, state it plainly in your onboarding material so the cover is understood before it is needed.
How Onsurity handles co-payment
Onsurity structures group plans around clarity. Co-pay terms are stated up front, and many plans can be built with no voluntary co-payment, so an approved cashless claim leaves employees paying nothing beyond genuinely non-admissible items. Where a co-pay does apply, it is spelled out in the member’s policy details inside the Onsurity Super App — not buried in fine print.
Because settlement runs cashless at 10,000+ network hospitals, the insurer’s share is paid straight to the hospital and the employee only settles their co-pay portion at discharge — no large upfront outlay, no waiting on reimbursement. Day-1 cover options mean the benefit is live from the joining date, with no waiting period on eligible claims.
HR sees every plan’s co-pay, sum insured and claims status in one place on the TeamSure dashboard, while the Good Doctors claims concierge — real doctors — guides employees through pre-authorisation and discharge, so nobody is surprised by their share of the bill.
Frequently asked questions
Is co-payment the same as a deductible?
No. A deductible is a fixed rupee amount the insured pays before the insurer contributes anything. Co-payment is a percentage of the approved claim the insured pays on every eligible claim, with the insurer paying the rest. A plan can carry both.
Does a co-pay apply to every claim?
Usually yes, on each approved claim, unless the policy limits it to specific conditions. Some group plans apply co-pay only to named ailments, or only to employees or dependents above a certain age. Always read the co-pay clause in the policy wording.
Does a higher co-pay lower the premium?
Yes. Because the insured shares more of each claim, the insurer’s payout falls, so a higher co-pay typically reduces the premium. Employers use this lever to fit a plan to budget, but it shifts more cost onto employees at the point of care.
Can an employer choose a plan with zero co-pay?
Yes. Many Onsurity group plans can be structured with no voluntary co-payment, so employees pay nothing beyond non-medical or excluded items on an approved cashless claim. This gives a cleaner benefit, at a higher premium than an equivalent co-pay plan.
Who pays the co-pay amount at the hospital?
The insured employee settles the co-pay share directly, alongside any non-admissible items, before discharge. On a cashless claim the insurer pays its portion to the hospital and the co-pay is billed to the patient.
Related terms
Comparing co-pay options for your team?
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