According to the Ministry of Health and Family Welfare's October 9, 2026, press release on Tele-MANAS, the helpline had received 47,75,644 calls since its launch in October 2022.
For HR teams, this raises an important question: Does your employee health insurance help someone access mental healthcare when they need it, or does it only step in when their condition requires hospitalization?
What is employee health insurance with mental health coverage?
Employee health insurance with mental health coverage is a group medical insurance policy that provides financial protection for eligible mental illness treatment alongside physical healthcare.
Consider an employee diagnosed with severe depression who requires psychiatric hospitalization. Their group health insurance may cover eligible treatment expenses under the applicable policy. But what if the same employee needs regular counseling without being admitted to a hospital?
While eligible psychiatric hospitalization falls within the mental health insurance framework, routine outpatient therapy is not automatically reimbursable under every employee health insurance policy. Employers must examine their OPD coverage, mental wellness benefits, and available add-ons. The Ministry of Health and Family Welfare's October 9, 2026, update also reported that:
- 53 Tele-MANAS cells were operational across all 36 States and Union Territories.
- Mental health services had been integrated into more than 1.83 lakh Ayushman Arogya Mandirs.
- The District Mental Health Programme had been sanctioned for 767 districts.
These are national mental healthcare figures, not workplace-specific statistics. They demonstrate India's efforts to expand access to mental health support.
For HR teams, the goal is to provide employee health cover that supports serious psychiatric conditions while making appropriate care accessible before hospitalization becomes necessary.
What does mental health coverage include in employee health insurance?
Mental health coverage varies by insurer and policy. Two companies with the same ₹5 lakh group health insurance sum insured may offer very different access to therapy and counseling.
One policy may cover eligible psychiatric hospitalization without separate OPD counseling benefits. Another may include psychologist consultations, teleconsultations, or an EAP. Here's what HR should look for.
| Mental health benefit |
What it means for employees |
What HR should verify |
| Psychiatric hospitalization |
Inpatient treatment for medically necessary mental health conditions |
Eligibility, admission requirements, network hospitals, and limits |
| Psychiatrist consultations |
Consultations with a qualified medical specialist |
Whether outpatient visits are covered |
| Prescribed medication |
Medicines prescribed for eligible psychiatric treatment |
Pharmacy coverage, OPD eligibility, and reimbursement conditions |
| Diagnostic assessments |
Tests and evaluations required for treatment |
Whether expenses are covered under hospitalization or OPD |
| Psychological counseling |
Sessions with qualified mental health professionals |
Session limits, provider eligibility, and insurance coverage |
| Online therapy |
Digital consultations with mental health professionals |
Teletherapy availability and eligible providers |
| Pre- and post-hospitalization expenses |
Eligible treatment expenses before and after admission |
Applicable time limits and links to covered hospitalization |
| Employee Assistance Program (EAP) |
Support for emotional, personal, or workplace concerns |
Whether it is a separate wellness service and how confidentiality works |
An important distinction: EAP counseling is not necessarily an insurance claim benefit. It may be an employer-funded service with separate access rules and session limits.
Are conditions like anxiety, depression, and bipolar disorder covered?
Depression, anxiety disorders, schizophrenia, and bipolar disorder can fall within mental health coverage when treatment meets the applicable policy requirements. However, a diagnosis does not guarantee reimbursement for every associated expense.
Hospitalization for a covered psychiatric condition and weekly outpatient psychotherapy are different benefits. HR should obtain written clarification about covered treatments rather than rely on a general assurance that mental health is included.
Best employee health insurance plans with mental health coverage in India
There is no single best employee health insurance plan for every company. A 30-person startup may prioritize affordable group medical insurance and online counseling, while a larger organization may need broader hospitalization cover, OPD benefits, and mental wellness services across multiple locations.
The following insurers offer group insurance products HR teams can evaluate. This comparison draws on publicly documented offerings, but actual coverage depends on the corporate quotation, policy wording, schedule, endorsements, and employer-selected benefits.
1. Aditya Birla Health Insurance: Group Activ Health
Aditya Birla Health Insurance offers corporate health insurance through Group Activ Health. Its broader health insurance portfolio also documents mental illness hospitalization benefits. For example, its published Activ One MAX+ product information describes medically necessary mental illness hospitalization and eligible pre- and post-hospitalization expenses.
Why HR should consider it: Evaluate psychiatric inpatient coverage alongside broader employee healthcare benefits. Confirm whether outpatient counseling, psychologist consultations, and psychiatric follow-ups are included in the corporate group quotation or require separate benefits.
2. ICICI Lombard: Group Health Insurance
ICICI Lombard offers corporate group health insurance alongside digital healthcare and wellness services. Its official corporate healthcare page describes cashless outpatient services, including virtual, telephonic, and in-person consultations, pharmacy, diagnostics, and mental wellness.
Its additional wellness services include health checkups, webinars, health camps, wellness calendars, and digital health advisory tools.
Why HR should consider it: It may suit companies seeking to combine hospitalization coverage with everyday healthcare services. Confirm whether psychologist consultations, online counseling, and cashless OPD are included in the actual corporate quotation or require additional benefits.
3. HDFC ERGO: Group Mediclaim Insurance
HDFC ERGO offers customizable group medical insurance. Its group mediclaim documentation addresses psychiatric and psychosomatic disorders, but employers should obtain current policy wording and written confirmation rather than rely on older documents or generic product descriptions.
Why HR should consider it: Compare its hospitalization protection and customization options. Request written confirmation of psychiatric hospitalization coverage, associated expenses, pre-existing disease provisions, and outpatient mental healthcare benefits.
4. Star Health: Star Group Health Insurance
Star Health offers employer-sponsored group medical insurance, including Star Group Health Insurance. Its group insurance offering allows customization, with benefits and sub-limits specified in the policy schedule. The insurer also publishes information about mental illness coverage and its regulatory obligations.
Why HR should consider it: Include Star Health when requesting comparative quotations for employee medical insurance. Ask for the relevant policy clauses and clarification on whether outpatient consultations, therapy, and prescribed medication are covered outside hospitalization.
Which employee health insurance plan should HR choose?
Compare actual coverage rather than relying on product brochures or premiums alone. If two insurers offer similar prices but only one includes an OPD package with accessible counseling, that difference matters.
A lower premium may save money at renewal without providing the healthcare access employees need. The right employee insurance plan balances financial protection, treatment access, coverage limits, confidentiality, and claims support.
Is mental health treatment covered under group health insurance in India?
Yes. Indian law and IRDAI directions require insurers to provide for mental illness treatment on the same basis as physical illness. However, HR teams must distinguish between the legal requirement and the benefits specified in the insurance contract.
What does the Mental Healthcare Act, 2017, say?
Section 21(4) of the Mental Healthcare Act, 2017, requires insurers to make provisions for medical insurance for mental illness treatment on the same basis as treatment for physical illness.
The Insurance Regulatory and Development Authority of India (IRDAI) reinforced this requirement through its October 18, 2022, circular, Providing cover for Mental Illness under Health Insurance policies (reference: 327/IRDAI/HLT/MHCA/CIR/220/10/2022). The circular is available in IRDAI's official circular repository.
Insurers cannot simply treat mental illness as an entirely excluded category of healthcare. However, this does not guarantee unlimited counseling sessions, free therapy, or reimbursement for every outpatient mental health expense.
Does group health insurance cover outpatient therapy?
Not necessarily. An employee managing anxiety through regular psychologist visits may not receive reimbursement if their group policy only covers eligible hospitalization-related expenses.
A peer-reviewed study, Mental Health Insurance in India: An Examination of Policy Implementation Post-MHCA 2017, published in the Indian Journal of Psychiatry, examined 235 policies from 30 insurance companies. It found that 88 policies, or 37.5% of those assessed, covered mental illness in some form. The researchers also found that 11 of the 30 companies offered some form of outpatient coverage for mental illness.
However, OPD benefits varied considerably. Some were restricted to premium policies, discounted consultations, or capped reimbursements.
These findings reflect the policies assessed in the study, not a current audit of every insurer's corporate group products.
For HR: Don't stop at confirming mental illness coverage. Ask what happens when an employee needs treatment without hospitalization.
Can employees file a health insurance claim for mental health treatment?
Yes, provided the treatment and expenses are eligible under the employee health insurance policy. For psychiatric hospitalization, employees should:
- Check whether the treating hospital is part of the insurer's cashless network.
- Inform the insurer or TPA according to the policy's claim-intimation requirements.
- Submit required medical records, bills, prescriptions, and discharge documents.
- Verify applicable coverage limits and exclusions.
- Track the employee health insurance claim through the insurer, TPA, or benefits platform.
For outpatient therapy, employees should confirm whether coverage is available through insurance reimbursement, cashless OPD, or a separate employer-funded wellness program.
HR should also establish a confidential support process so employees are not required to disclose sensitive treatment details to their reporting managers.
How to compare employee health insurance plans for mental health benefits
A policy may look comprehensive on paper but still leave employees paying for the treatment they use most frequently. HR should evaluate these factors before selecting a plan.
| Comparison factor |
Questions HR should ask |
| Psychiatric hospitalization |
What treatments are covered? Are there sub-limits or admission requirements? |
| OPD mental healthcare |
Are psychiatrist consultations and psychologist sessions included? |
| Therapy limits |
Are there session caps, per-visit reimbursement limits, or annual expenditure limits? |
| Waiting periods |
How are pre-existing mental health conditions treated? Are applicable waiting periods waived under the group policy? |
| Hospital and provider network |
Are psychiatric facilities and qualified professionals accessible across employee locations? |
| Medication and diagnostics |
Are eligible prescriptions, assessments, and follow-up consultations covered? |
| Claims process |
Is cashless treatment or digital claims submission available? |
| Confidentiality |
What information reaches HR, managers, insurers, and wellness vendors? |
| Additional benefits |
Can the employer add counseling, EAP, crisis support, or mental wellness programs? |
| Cost |
What is included in the base premium, and what requires additional spending? |
Don't compare mental health coverage only by sum insured
Consider two companies offering ₹5 lakh employee health cover. Company A provides standard hospitalization coverage without a separate outpatient counseling benefit. Company B offers the same sum insured plus a defined number of counseling sessions through an employer-funded wellness program.
Both employees have medical insurance, but their access to routine mental healthcare differs. For someone who needs early professional support, additional counseling can make care easier to access.
HR should evaluate hospitalization protection and everyday mental healthcare separately, then assess how the benefits work together.
How can HR teams add mental health benefits to employee health insurance?
Adding mental health coverage shouldn't begin and end with asking whether psychiatric treatment is included. The goal is to help employees access appropriate care without unnecessary financial or administrative barriers.
1. Assess employee mental health needs
Employees working long hours may need stress management and counseling, while distributed teams may benefit from online consultations. Employees managing diagnosed conditions may require ongoing psychiatric care.
Use anonymous surveys, voluntary feedback, and aggregated wellness insights to identify gaps. Avoid collecting individual diagnoses or asking employees to disclose their treatment histories. The objective is to understand employees' needs, not identify who is seeking treatment.
2. Identify gaps in existing insurance coverage
Review your group health insurance policy with your insurer or broker. Check the policy wording and Customer Information Sheet (CIS) for psychiatric hospitalization, OPD consultations, medication, pre-existing conditions, and treatment limits.
Your current employee insurance policy may already cover psychiatric hospitalization but exclude regular psychologist consultations. Identifying this gap allows you to negotiate a targeted benefit without replacing an otherwise suitable policy.
3. Compare insurance benefits with counseling and EAP services
Group health insurance and an Employee Assistance Program serve different purposes.
Group health insurance
Employee Assistance Program (EAP)
Provides financial coverage for eligible medical treatment
Provides emotional and psychological support
Covers eligible psychiatric hospitalization
May offer short-term counseling for personal and workplace concerns
Claims depend on policy conditions
Access depends on the employer's agreement with the provider
Can include OPD treatment when covered
Can support employees who do not require hospitalization
Generally operates through insurers and TPAs
Usually operates through a specialized wellness or counseling provider
Combining both can provide financial protection for serious conditions while making everyday mental healthcare more accessible.
4. Set a budget for insurance and additional wellness benefits
A comprehensive mental health program doesn't require purchasing every available add-on. Separate the budget for medical insurance from additional wellness services.
For example, HR could retain its existing group health insurance policy and allocate additional funds to counseling, online consultations, or an EAP. When evaluating costs, consider:
- Annual cost per employee.
- Number of counseling sessions included.
- Additional charges beyond the included session limit.
- Availability of online and in-person sessions.
- Access to qualified professionals across locations and languages.
- How unused benefits and additional session requests are handled.
The goal is to build a program employees can realistically access, not simply increase the number of benefits listed in the HR handbook.
5. Communicate coverage, confidentiality, and access to employees
Even a well-designed employee health insurance policy has limited value if employees don't know how to use it.
Explain what mental healthcare is covered, how to book consultations, whether upfront payment is required, and how to submit claims. Clarify what information is shared with insurers and healthcare providers, whether managers are informed, and what utilization reports the organization receives.
Where possible, HR should receive aggregated program reports rather than identifiable counseling records. Communicate benefits throughout the year, not just during onboarding or annual renewal.
How Pazcare helps employers build better mental health benefits
Employee health insurance should be a safety net, not another administrative responsibility for HR. Pazcare helps employers bring group health insurance and everyday healthcare benefits together, making it easier to build a benefits program that considers both physical and mental wellbeing. Through Pazcare's corporate wellness offerings, companies can explore additional support such as:
- Mental wellness services: Access to qualified therapists through employer-selected wellness packages.
- Customizable benefits: Wellness programs designed around employee requirements and company budgets.
- Digital access: Employees can access available insurance and wellness benefits through the Pazcare app.
- Claims assistance: Support for employees and HR when eligible insurance claims require follow-up.
These wellness benefits are separate from the underlying insurer's contractual coverage and depend on the package selected by the employer.
A good employee benefits program should encourage participation, not just look comprehensive on paper. Divya, a Pazcare customer, shared her experience with the company's wellness activities:
"My team enjoys the wellness activities conducted by Pazcare. They actually participate and look forward to it."
Another customer, Singram Sharma, shared:
"I got a GMC policy for my 4-month-old startup with amazing wellness benefits. Love everything about it."
Want to make mental healthcare a meaningful part of your employee benefits?
Talk to a Pazcare employee benefits expert to explore group health insurance and wellness benefits that work for your team.
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