What's the minimum employees required for group health insurance?

If you are an entrepreneur, it’s a no-brainer that your workers are the asset of your organization and a key element to your company's success. Hence, it becomes imperative for you to offer them far-reaching employee benefits including group health insurance plans. However, picking the right health care coverage plans can get complicated if your questions go unanswered. You might have plenty of inquiries regarding group health insurance plans, how they work, what is the minimum number of employees required, how they are better from individual health care coverage and a lot more. We have got you covered!

What is group health insurance?

Group Health Insurance is the health insurance given by employers to all employees in the form of employee benefits. All employees get the same insurance and the employer decides what coverage they want to offer. In India, the general cover is between 3 lakh to 5 lakhs. Employees can claim this insurance for certain hospitalisation expenses.

Read - A complete guide to Group Health Insurance

Minimum number of employees for group health insurance in India

As per Insurance Regulatory and Development Authority of India (IRDAI), a company with 7 or more lives is qualified to get group health insurance. However, it is up to the insurers to decide the minimum size they want to cater to.

• Public insurers: Offer group health insurance to companies with more than 100 lives
• Private insurers: Usually offer policies to businesses with 50 lives or more

Who counts toward the ‘minimum lives’?

It’s important to note that insurers look at the number of lives, not just full-time employees. Here's how companies meet the criteria:

• You can include employees’ family members (spouses, children, parents) to reach the required number.
• If you have 5 employees, and each adds one parent, that counts as 10 lives.
• Many insurers require 100% enrollment of dependents in companies with fewer than 200 employees.

Who may not be eligible?

• Part-time or freelance workers typically aren’t eligible. However, if your company has less than 7 employees but has a workforce majorly working part-time, then you can get group health insurance.
• People over 65 years of age may not qualify unless the insurer has special provisions. But if your workforce is primarily made of old people, there are provisions to get group health insurance.

Still unsure? Contact your insurer or a group insurance broker for clarity on exceptions and inclusion rules.

What happens if the employee size goes lesser than the minimum size after group health insurance is issued?

The limit applies only at the time of issuance of a group health insurance policy. If the number decreases after you get your group health insurance it won’t be a problem. However, when you go renewal, which happens annually, you need to have the minimum size that your insurer dictates.

What does “lives covered” mean in group health insurance?

In group health insurance, “lives covered” refers to the total number of individuals included under the policy not just the employees and this is used to meet the minimum count even when employee headcount is low.

This includes:

• Employees (full-time, permanent staff).
• Dependents:
  • Spouse
  • Children
  • Parents (sometimes in-laws, depending on insurer and policy).

So, Lives = Employees + Dependents.

Why is “lives covered” important?

1. Meeting the minimum employees for group health insurance requirement

• As per IRDAI guidelines, at least 7 lives are required to issue a group health policy.
• This doesn’t mean you need exactly 7 employees. You can include dependents (spouse, kids, parents) to meet the requirement.

Example: If you have 5 employees and each adds their parents, that makes 15 lives covered → Eligible for group health insurance.

2. Flexibility for small business health insurance minimum employees

• Startups or small businesses with less than 10 employees often worry about eligibility.
• By adding dependents, even a company with only 5–6 employees can cross the minimum lives threshold.
• This makes group health insurance accessible to small teams who otherwise wouldn’t qualify.

3. Better coverage for employees and families

• Employees value health insurance more when their families are included.
• Covering dependents makes the policy more attractive and boosts satisfaction, retention, and employee well-being.

Group health insurance by Pazcare

We offer group health insurance to companies with just 7 employees. But that’s not even the best part. We offer the best prices in the market and also a bunch of additional benefits like:

• Mental wellness & therapy support
• Unlimited doctor consultations
• Super top-up options
• Annual health checkups

Get in touch with our insurance experts to know more!

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