Group Health Insurance For Startups - How to choose the best plan?
Group health insurance for startups - How can founders and HRs buy a cost-efficient insurance policy for their small teams.
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Updated on:
December 7, 2023
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Table of Contents
What's in?
Why should startups invest in Group health insurance?
Tips to get the best deal when buying startup health insurance
Health insurance for startups - A case study with Pagesuite
When we think of employee benefits like group health insurance we think of enterprise size companies and maybe some popular mid-size companies. When we think of startups, we generally think of flexibility, friendly work culture, and the obvious - growth. Today, the landscape of employee benefits in India has changed.
Group health insurance is for all companies of all sizes as we move toward tech-supported and more dynamic employee benefit programs.
But hey, let's talk about reality. Not all startups have the money to provide a comprehensive wellness program. And not all startups want to invest in their employees' health.
But if you have the budget and want to establish an employee-centric approach, then the first employee benefit that you should offer is a group health insurance policy. And this article will help you get started.
Why should startups invest in Group health insurance?
Here are five reasons why startups buy group health insurance policy for their team:
1. Mandatory order
The government made it mandatory from April 2020 and notified insurers to offer comprehensive health insurance policies for workers and asked employers to implement them as a part of the order №40–3/2020-DM-I (A)
2. Tax deductions
Employers can enjoy tax deductions for group health insurance. The expense for GHI is treated as ‘Profit in lieu of salary’ and can be claimed as a business expense in a profit and loss account. You can claim it if you offer to pay a full premium or copay with employees. When you share the premium with employees, you can only claim for what you pay and not employees’ contributions.
3. Attract talent
From a bird's eye view, to attract the right talent, you need to ensure you are providing career growth opportunities, competitive pay, and work flexibility and the obvious - employee benefits.
You need to provide benefits like group health insurance, leave policy, physical and mental wellness support.
Moreover, your wellness program has to be customized and inclusive of all your employees. This effectively communicates that you take care, value and recognize your employees and in turn you deserve the best skill sets and talent to help your company grow. This will serve as your 101 for employer branding to acquire the best talent.
According to Pazcare's State of employee benefits survey, more than 85% of employers feel providing employee benefits helps in employee engagement and satisfaction.
4. Retain talent
The start-up ecosystem is booming but only around 10% of the startups succeed each year according to Failory. Two things that can help with growth and success are impact-driven leadership and adept employees. And when you hire high performing employees, you retain them.
As an organisation, it is important to communicate to your employees that you care for them and show it to them with inclusive employee benefits. Offering a myriad of employee benefits is one of the proven ways companies lower their attrition rate. 78% of employees reported they’re more likely to stay with an employer because of their benefits program according to ArmadaCare.
And what's a better way to communicate it than offering startup health insurance?
All companies prefer to work with the best. However, it is all the more important for start-ups because they need to set up adept and loyal teams who will guarantee the initial kick-off and growth. The employees work for the company’s upliftment and theirs. The common mantra for start-ups when it comes to employees is ‘grow with us’.
Start-ups have to be scrupulous as they don't want to incur more and more hiring costs for the same role and would prefer employees who will stay, enjoy the work and strive towards the vision.
You have to consider the budget limitations and develop a package that will attract quality resources while also ensuring it is not too heavy monetarily that it irks the investors. To facilitate the same, start-up companies must strike the right chord in terms of compensation and benefits. Most of the time, for startups, employee benefits are just a way to compensate for not offering a high salary.
To compensate for a salary that does not meet that competitor benchmark, startups can provide ESOPS, Group medical insurance without a copay, and flexi benefits such as meal allowance, reimbursements for home office set up and more.
Tips to get the best deal when buying startup health insurance
There is no framework or flowchart to buy the right policy. Every company has its own budget and requirements. However, we have listed some of the ideal practices for startups:
1. Consider adding a co-pay
Startups can decide if they want to pay the entire premium or share it with the employees. Some companies take copay with employees to cut down on their expenses. A few companies take it up as employees can claim tax deductions on the premium paid by them.
Another rationale is that the employees of startups are younger and may comparatively have working parents. Employees tend to hesitate when companies offer a copay in group health insurance policy. With a younger workforce with working parents, it is easier to communicate and convince them about the need for an extensive medical policy and co-pay.
Startups must have a futuristic approach and opt for coverage based on the market benchmark. When you take up a smaller coverage and then increase the sum insured later it comes with a heavy premium loading.
Currently, the best coverage you can consider offering is 5 lakhs for group health insurance.
Adding parents to a policy will increase your premium as they are more likely to claim it. You can consider providing employee, spouse, children. You can always add them into your coverage when you renew.
4. Include contractual employees
Startups tend to work with contractual employees to get the initial kick-off and then create in-house teams. Adding more lives may give you an advantage to negotiate with insurers. You can also include your interns in your policy. All you have to do is create an employee ID for them.
25% of the startups revise their employee benefits program 3 to 4 times a year. - State of employee workplace report by Pazcare
5. Platform to manage employee benefits
Managing group health insurance for employees is manual and monotonous as it involves managing TPA, insurer, employee queries and claim process. It is necessary for startups to look for tech-based platforms to manage, and track it to avoid having multiple resources work on it.
With Pazcare you get a dashboard to manage all your employee benefits for free when you buy a group policy. And you employees can easily raise claims with Pazcare app.
How Pazcare enabled Pagesuite to provide comprehensive healthcare benefits for their employees?
Pagesuite had a simple funda - we want to be a company that cares for our employees and family.
So we went for an extensive group health insurance policy that includes employees, spouse, 2 kids and parents with a coverage of 5 lakhs.
With many years of experience in the HR field and having worked with many insurance partners, I agree Pazcare stands above many. The differentiator has been the cost, technology platform, ease of transactions, smooth coordination, right advice at the right time by the Pazcare team. Patrick Pinto, Associate Director, HR, Pagesuite
Pagesuite has a holistic approach to employee benefits by providing mental wellness support and upskilling opportunities too. They have an initiative called “Friday’s Got Better” wherein employees work for half days on Friday.
The other half-day is dedicated to learning the courses they have picked up, or for team engagement, knowledge sharing sessions, coffee or beer time. They provide 5 days of compassionate leave for any death in the immediate family and additional paid leaves for covid impacted employees.
And what’s the result?
Pagesuite was able to create a sense of belonging and a safe place to work with their employee benefits. It was a game changer when employees could easily access their benefits with Pazcare app. It helps them retain our employees.
They have established an image that they as a company not just provide the best of compensation in the market, but also care for their wellbeing and their family too. It helped them in attracting top talent as today candidates not just look at compensation but also other perks & benefits.
Health insurance for startups by Pazcare
✌️ We offer the best health health insurance for startups with even 2 employees.
💰 We give the best pricing for startups, along with zero-day onboarding.
👨💻 Our experts will help you with understanding and designing the best policy for you 👇
From coverage to claims; a smooth insurance experience!
Why should startups invest in Group health insurance?
Tips to get the best deal when buying startup health insurance
Health insurance for startups - A case study with Pagesuite
When we think of employee benefits like group health insurance we think of enterprise size companies and maybe some popular mid-size companies. When we think of startups, we generally think of flexibility, friendly work culture, and the obvious - growth. Today, the landscape of employee benefits in India has changed.
Group health insurance is for all companies of all sizes as we move toward tech-supported and more dynamic employee benefit programs.
But hey, let's talk about reality. Not all startups have the money to provide a comprehensive wellness program. And not all startups want to invest in their employees' health.
But if you have the budget and want to establish an employee-centric approach, then the first employee benefit that you should offer is a group health insurance policy. And this article will help you get started.
Why should startups invest in Group health insurance?
Here are five reasons why startups buy group health insurance policy for their team:
1. Mandatory order
The government made it mandatory from April 2020 and notified insurers to offer comprehensive health insurance policies for workers and asked employers to implement them as a part of the order №40–3/2020-DM-I (A)
2. Tax deductions
Employers can enjoy tax deductions for group health insurance. The expense for GHI is treated as ‘Profit in lieu of salary’ and can be claimed as a business expense in a profit and loss account. You can claim it if you offer to pay a full premium or copay with employees. When you share the premium with employees, you can only claim for what you pay and not employees’ contributions.
3. Attract talent
From a bird's eye view, to attract the right talent, you need to ensure you are providing career growth opportunities, competitive pay, and work flexibility and the obvious - employee benefits.
You need to provide benefits like group health insurance, leave policy, physical and mental wellness support.
Moreover, your wellness program has to be customized and inclusive of all your employees. This effectively communicates that you take care, value and recognize your employees and in turn you deserve the best skill sets and talent to help your company grow. This will serve as your 101 for employer branding to acquire the best talent.
According to Pazcare's State of employee benefits survey, more than 85% of employers feel providing employee benefits helps in employee engagement and satisfaction.
4. Retain talent
The start-up ecosystem is booming but only around 10% of the startups succeed each year according to Failory. Two things that can help with growth and success are impact-driven leadership and adept employees. And when you hire high performing employees, you retain them.
As an organisation, it is important to communicate to your employees that you care for them and show it to them with inclusive employee benefits. Offering a myriad of employee benefits is one of the proven ways companies lower their attrition rate. 78% of employees reported they’re more likely to stay with an employer because of their benefits program according to ArmadaCare.
And what's a better way to communicate it than offering startup health insurance?
All companies prefer to work with the best. However, it is all the more important for start-ups because they need to set up adept and loyal teams who will guarantee the initial kick-off and growth. The employees work for the company’s upliftment and theirs. The common mantra for start-ups when it comes to employees is ‘grow with us’.
Start-ups have to be scrupulous as they don't want to incur more and more hiring costs for the same role and would prefer employees who will stay, enjoy the work and strive towards the vision.
You have to consider the budget limitations and develop a package that will attract quality resources while also ensuring it is not too heavy monetarily that it irks the investors. To facilitate the same, start-up companies must strike the right chord in terms of compensation and benefits. Most of the time, for startups, employee benefits are just a way to compensate for not offering a high salary.
To compensate for a salary that does not meet that competitor benchmark, startups can provide ESOPS, Group medical insurance without a copay, and flexi benefits such as meal allowance, reimbursements for home office set up and more.
Tips to get the best deal when buying startup health insurance
There is no framework or flowchart to buy the right policy. Every company has its own budget and requirements. However, we have listed some of the ideal practices for startups:
1. Consider adding a co-pay
Startups can decide if they want to pay the entire premium or share it with the employees. Some companies take copay with employees to cut down on their expenses. A few companies take it up as employees can claim tax deductions on the premium paid by them.
Another rationale is that the employees of startups are younger and may comparatively have working parents. Employees tend to hesitate when companies offer a copay in group health insurance policy. With a younger workforce with working parents, it is easier to communicate and convince them about the need for an extensive medical policy and co-pay.
Startups must have a futuristic approach and opt for coverage based on the market benchmark. When you take up a smaller coverage and then increase the sum insured later it comes with a heavy premium loading.
Currently, the best coverage you can consider offering is 5 lakhs for group health insurance.
Adding parents to a policy will increase your premium as they are more likely to claim it. You can consider providing employee, spouse, children. You can always add them into your coverage when you renew.
4. Include contractual employees
Startups tend to work with contractual employees to get the initial kick-off and then create in-house teams. Adding more lives may give you an advantage to negotiate with insurers. You can also include your interns in your policy. All you have to do is create an employee ID for them.
25% of the startups revise their employee benefits program 3 to 4 times a year. - State of employee workplace report by Pazcare
5. Platform to manage employee benefits
Managing group health insurance for employees is manual and monotonous as it involves managing TPA, insurer, employee queries and claim process. It is necessary for startups to look for tech-based platforms to manage, and track it to avoid having multiple resources work on it.
With Pazcare you get a dashboard to manage all your employee benefits for free when you buy a group policy. And you employees can easily raise claims with Pazcare app.
How Pazcare enabled Pagesuite to provide comprehensive healthcare benefits for their employees?
Pagesuite had a simple funda - we want to be a company that cares for our employees and family.
So we went for an extensive group health insurance policy that includes employees, spouse, 2 kids and parents with a coverage of 5 lakhs.
With many years of experience in the HR field and having worked with many insurance partners, I agree Pazcare stands above many. The differentiator has been the cost, technology platform, ease of transactions, smooth coordination, right advice at the right time by the Pazcare team. Patrick Pinto, Associate Director, HR, Pagesuite
Pagesuite has a holistic approach to employee benefits by providing mental wellness support and upskilling opportunities too. They have an initiative called “Friday’s Got Better” wherein employees work for half days on Friday.
The other half-day is dedicated to learning the courses they have picked up, or for team engagement, knowledge sharing sessions, coffee or beer time. They provide 5 days of compassionate leave for any death in the immediate family and additional paid leaves for covid impacted employees.
And what’s the result?
Pagesuite was able to create a sense of belonging and a safe place to work with their employee benefits. It was a game changer when employees could easily access their benefits with Pazcare app. It helps them retain our employees.
They have established an image that they as a company not just provide the best of compensation in the market, but also care for their wellbeing and their family too. It helped them in attracting top talent as today candidates not just look at compensation but also other perks & benefits.
Health insurance for startups by Pazcare
✌️ We offer the best health health insurance for startups with even 2 employees.
💰 We give the best pricing for startups, along with zero-day onboarding.
👨💻 Our experts will help you with understanding and designing the best policy for you 👇
From coverage to claims; a smooth insurance experience!
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