Are gig workers eligible for group health insurance in India?

India's gig economy has moved from a side conversation to a structural part of the labour market. Delivery riders, ride-hailing drivers, freelance consultants, and platform-based service professionals now number somewhere close to 12 million people, and that figure is expected to nearly double by the end of the decade. As that workforce has grown, so has a real and reasonable expectation among these workers, and increasingly among the companies that engage them, that basic protections like health insurance shouldn't be reserved only for people on a traditional payroll.

That expectation runs into a genuine legal and regulatory gap. Group health insurance in India, the kind of policy an HR team buys for its employees, was built around a specific legal relationship: employer and employee. Gig work was structured, deliberately in most cases, to sit outside that relationship. The result is a lot of confusion, particularly since India recently passed sweeping new labour legislation that does extend social security to gig workers, but through an entirely different mechanism than employer group insurance, funded differently, administered differently, and rolling out on its own timeline.

This blog untangles that confusion: what gig workers are eligible for today, why standard group health insurance doesn't reach them, what actually changed under the Code on Social Security, 2020, and what employers who want to cover their gig workforce anyway can actually do.

What is a gig worker?

Under the Code on Social Security, 2020, a gig worker is legally defined as a person who performs work or participates in a work arrangement and earns income from it outside of a traditional employer-employee relationship. This is a deliberately broad definition, and it's worth sitting with the phrase "outside of a traditional employer-employee relationship," because that single clause is the reason gig workers fall outside standard group health insurance eligibility.

The Code separately defines a platform worker as someone engaged through an online platform or digital marketplace to provide services, and an aggregator as the digital intermediary, think food delivery apps, ride-hailing apps, or freelance marketplaces, that connects these workers to end customers. In practice, most platform workers are also gig workers, but the Code treats them as related, overlapping categories rather than identical ones, which matters when different schemes and rules apply differently to each.

Are gig workers eligible for group health insurance?

No. Gig workers are not eligible for standard employer-sponsored group health insurance in India. This isn't a case of insurers choosing not to cover them; it's a structural eligibility issue built into how group insurance is regulated.

• IRDAI group insurance rules: IRDAI recognizes two categories of group insurance: employer-employee groups and non-employer-employee groups (like credit card holders or club members). A standard corporate health policy sits in the employer-employee category, which requires a formal, verifiable employment relationship, payroll records, an employer ID, and documented employment terms.
• Employer-employee relationship: Gig workers are, by legal definition, engaged outside that relationship. They're not on payroll, they don't hold a conventional employment contract, and platforms typically structure the engagement as a service or partnership arrangement. No employer-employee relationship means no eligibility, regardless of how exclusively someone works through a platform.
• Insurance Act requirements: Insurers underwrite group risk against a defined group with a documentable insurable interest. An employer has that interest in its payroll staff. An aggregator's relationship with its gig workers hasn't historically met the same test, which is why the Code on Social Security addresses this through a separate mechanism rather than by redefining employer-employee group insurance.

Why aren't gig workers covered under employer group health insurance?

Breaking the eligibility gap down further, four separate factors compound to keep gig workers outside standard group policies:

• No payroll relationship: Group health insurance underwriting leans heavily on payroll data, headcount, salary bands, tenure, to price and structure the policy. Gig workers don't generate this data in a form insurers can use, since they're not employees receiving a salary.
• Contractual engagement: Most aggregator platforms engage gig workers through a service agreement or partnership terms, explicitly, and often deliberately, structured to avoid characterizing the relationship as employment. This isn't unique to India; it's the same structural choice platform companies have made in most major markets, and it has direct downstream consequences for insurance eligibility.
• Insurer underwriting: Insurers assess group risk based on the stability and verifiability of the group. A gig workforce, with high turnover, variable hours, and no centralized HR record, is harder to underwrite using the same actuarial assumptions built for a stable, payroll-verified employee base, which is part of why insurers haven't historically extended standard group products to this category even where an aggregator wanted to buy coverage.
• Policy eligibility: Even where a company wants to voluntarily extend coverage to gig workers, doing so through a standard employer-employee group policy isn't straightforward, since adding non-payroll workers to that specific policy category can conflict with the very definition the policy was underwritten against. This is why voluntary employer coverage for gig workers, discussed further below, typically has to be structured as a different kind of policy altogether, not an extension of the existing employee policy.

What changed under the Code on Social Security, 2020?

The Code on Social Security, 2020 is one of four labour codes that together consolidate 29 older central labour laws into a modernized framework. It was passed by Parliament back in 2020 but only came into force on November 21, 2025, after years of state-level consultation and phased notification.

• Recognition of gig workers: For the first time, Indian law formally defines "gig worker" as a distinct legal category, someone performing work outside a traditional employer-employee relationship. This matters beyond semantics: legal recognition is the precondition for any statutory benefit scheme to attach to this group at all.
• Recognition of platform workers: The Code separately defines platform workers and aggregators, creating a regulatory hook that lets the government impose obligations directly on platform companies, food delivery, ride-hailing, freelance marketplaces, rather than trying to retrofit gig workers into employer obligations that were never designed for this kind of engagement.
• Chapter IX: The provisions specific to gig and platform worker social security sit in this part of the Code, primarily sections 109 through 114. In plain terms, this is the part of the law that says: gig and platform workers exist as a recognized category, they're entitled to social security benefits, those benefits will be funded by the platforms that engage them, and a Social Security Fund will be set up to administer this. 

It's a parallel system, not an amendment to how employer group insurance works, which is exactly why gig workers still don't become eligible for a company's existing employee health policy under this Code.

Aggregator contributions explained

The funding mechanism is the practical core of the new framework. Aggregators, not the government and not the gig workers themselves, are required to fund it.

In plain language: platforms like food delivery and ride-hailing apps have to set aside a percentage of what they earn, specifically tied to what they pay their gig workforce, and that money goes into a dedicated national fund rather than into any individual worker's personal insurance policy. Government allocations and CSR contributions can supplement this fund, so the full financing burden doesn't sit on aggregators alone.

It's worth being precise about where implementation actually stands. While the Code itself came into force on November 21, 2025, several legal analyses published in the months after noted that the exact contribution rate within the 1% to 2% band, the payment mechanics, and the reporting formats still required further central government notification before aggregators had a firm, enforceable operational obligation. Some states have moved independently and faster: Karnataka's own Platform-Based Gig Workers (Social Security and Welfare) Act, notified through rules in November 2025, has already established a state welfare board and a welfare fee separate from, and running alongside, the central Code. Telangana has drafted similar legislation. The practical reality for now is a framework that exists in law but is still being operationalized in stages, at both the central and state level.

What benefits do registered gig workers receive?

Once the framework is fully operational, the Code contemplates the following categories of benefit for registered gig and platform workers:

• Health benefits: Coverage intended to address hospitalization and medical costs, administered through central or state welfare schemes rather than a private group health policy purchased by any single aggregator.
• Accident cover: Given how physically exposed much of gig work is, delivery riders and drivers in particular, accident insurance is one of the core categories the Social Security Fund is designed to finance.
• Disability benefits: Coverage intended to provide financial support to a gig worker who sustains a disability, whether from a work-related accident or otherwise, that affects their ability to continue earning through platform work.
• Maternity benefits: Recognizing that a meaningful share of the gig and platform workforce is female, particularly in service and delivery categories, the framework includes maternity-related support as a distinct benefit category.
• Old-age protection: A pension or retirement-linked benefit, extending a form of the long-term financial security that provident fund contributions provide to formal employees, into a workforce that has historically had no equivalent.
• Life insurance: Basic life cover intended to provide a benefit to a gig worker's family in the event of death.

It's worth repeating clearly: these benefits are contemplated by the Code, but their actual availability to any individual gig worker depends on the specific scheme being formally notified and rolled out by the central or relevant state government, and on the worker being registered on the e-Shram portal, which is the mechanism through which eligibility and access are administered. A worker who isn't registered doesn't automatically receive these benefits simply because the Code exists.

Can employers still offer insurance to gig workers?

Yes. Nothing in the current framework prevents it, and companies in delivery, logistics, and on-demand services already do this to retain reliable gig talent.

What changes is the structure. Since gig workers don't qualify for a standard employer-employee group health policy, employers typically use one of these routes instead:

• Non-employer-employee group insurance, the same IRDAI category used for affinity groups like credit card holders or club members
• Group personal accident policy, which doesn't carry the employer-employee underwriting requirement that group health insurance does
• Dedicated gig-workforce insurance products, a growing category built specifically for non-payroll, high-turnover workforces

This is a different design problem than standard employee benefits. It has to account for:

• Constant workforce turnover
• Workers active on multiple platforms simultaneously
• No payroll data for insurers to underwrite against

How Pazcare helps businesses cover gig workers

Instead of forcing every kind of worker into one policy that wasn't designed for them, Pazcare helps companies design coverage that fits how their workforce is actually structured. For gig or platform workers, that means:

• Structuring a non-employer-employee group policy or group personal accident policy suited to a non-payroll, high-churn workforce
• Avoiding the mismatch of trying to fit gig workers into a standard employee health policy where they don't legally qualify
• Managing coverage across different workforce categories, permanent employees, contract staff, and gig workers, on the structure appropriate to each
• Keeping the covered roster accurate as people join and leave
• Providing claims support through the year

Pazcare is an IRDAI-licensed insurance broker that works with Indian companies to design and manage insurance programs across these different workforce categories.

Talk to a Pazcare insurance expert to review what coverage options are actually available for your gig or contract workforce, or download the Employee Health Matters 2026 guide to see how Indian organizations are structuring benefits across different types of workers.