The employees are the pillars of a company or an organisation. An employer does his best to attract the best employees and keep them intact with the organisation. These include paid leaves, paid vacations, team outings, gifts etc,. Along with this an employer can leverage some basic benefits like health insurance coverage and organising wellness programs for employees. Offering group health insurance plans or (also known as group medical insurance - (GMC)) can build a sense of safety and keep the employees motivated towards the long term goals.
What is Group Health Insurance?
Group health insurance or corporate health insurance plans provide health insurance coverage to the members or the employees of a company or organisation. These are purchased as employee benefit packages by the employer.
81% of employees believe employers have a responsibility to foster trust through benefits including Group Health Insurance.
What makes a Group health insurance plan different?
In group health insurance, the insurer’s risk is spread among the fellow policy holders, as a result of which the members receive it at reduced premium costs compared to individual health insurance plans. Hence making them affordable and cheaper than individual plans available on the market. Also differences like-insurers, plan types, costs, and terms also exist between them.A Group health insurance premium policy can provide maternity coverage to pre-existing diseases coverage. Apart from these they also cover a variety of diseases.
- Premiums are 30–50% cheaper than individual plans.
- Coverage ceases when employment ends, though portability options may be available.
How does Group Health Insurance work?
Group health insurance plans are purchased by companies or organisations as part of their employee benefits program. Once enrolled, employees receive health coverage under a master policy negotiated between the employer and the insurer.
Here’s how it works:
- Employer-Paid or Shared Premium: The employer pays the premium either fully or partially on behalf of employees.
- Minimum Participation Requirement: Generally, at least 70% of eligible employees must opt-in for the plan to be activated (as per insurer guidelines).
- Family Coverage Included: Most group policies extend coverage not just to the employee, but also to their spouse, children, and dependent parents making it a comprehensive health safeguard.
- Coverage Duration: The insurance remains valid only while the employee is part of the organisation. Upon resignation or termination, coverage ends unless there’s an option for portability or conversion to an individual plan.
- Cashless Network Hospitals: Employees can avail cashless treatment at a wide network of hospitals affiliated with the TPA (Third Party Administrator) or insurer.
What is covered in Group Medical Insurance plan?
Group medical insurance typically covers a range of health-related expenses for employees under a single policy. The exact coverage can vary depending on the policy details, but common inclusions are:
- Hospitalization Expenses: Costs associated with hospital stays, including room charges, doctor fees, medical tests, and surgeries.
- Daycare Procedures: Treatments that do not require 24-hour hospitalization due to technological advancements.
- Pre and Post-Hospitalization: Medical costs incurred before and after hospitalization.
- Maternity Benefits: Coverage for maternity expenses, which may include both pre-natal and post-natal care as well as delivery costs.
- Newborn Baby Cover: Newborn is covered from day one under maternity benefit (up to a certain period/amount).
- Ambulance Fees: Charges for ambulance services used in case of an emergency.
- Pre-existing Diseases: Conditions that exist before obtaining insurance might be covered after a waiting period specified by the insurer.
- Annual Health Check-ups: Free preventive health check-ups, usually offered once a year.
- Dental and Optical Care: Some policies extend to include dental treatments and vision care, though these are less common and might come with limitations
- Alternative Treatments: Costs for non-allopathic treatments such as Ayurveda, Homeopathy, Unani, and Siddha, if recognized under the policy.
It's essential for companies to review the specifics of their group medical insurance policy to understand the coverage details fully, as these can be tailored to the needs of the organization and its employees.
Advantages of Group Health Insurance
For Employers:
- Attract and retain top talent
- Lower premium costs through pooling
- Tax-deductible under Section 37
- Helps in fulfilling compliance (e.g., COVID-related SOPs)
For Employees:
- Immediate coverage from day one
- Coverage for family members
- Often no medical checkup needed
- Pre-existing diseases may be covered
Tax deductions for a Health Insurance premium plan
A win-win situation for the employee and employer is created as some of the plan creates eligibility to get tax deductions under the Income Tax act. Tax deductions for health insurance premium paid by the individuals come under the Section 80D of the Income Tax Act.
For an insurance premium paid for self, spouse and dependent children an individual can claim a deduction of Rs 25,000.Also, an additional deduction on health insurance up to Rs 25,000 for parents’ are applicable if the parents are less than 60 years of age. When the age is more than 60 years, the deduction benefit increases to Rs 50,000.If both individual and parents are 60 years or above, the maximum deduction available under this section goes up to Rs 1 lakh.
If employees contribute toward the group insurance premium (e.g., in co-pay or top-up plans), their portion is eligible for deduction under Section 80D.
They can claim tax relief up to standard 80D limits for themselves and dependents.
Group Health Insurance during Covid
In the current situation, especially as the world is fighting a Covid-19 pandemic, health insurance has become the need of the hour. As a result the government has made the group health insurance for the employees mandatory as a part of COVID operating guidelines.
In the recent Insurance Regulatory and Development Authority of India(IRDAI) circular, it states that "Reference is invited to Order No. 40-3/2020-DM-I (A) dated 15th April 2020 issued as part of the Consolidated Revised Guidelines by Ministry of Home Affairs (MHA), GOI. As per the said order, inter alia; the following are stipulated:All industrial and commercial establishments, workplaces, offices etc. shall put in place arrangements for the implementation of Standard Operating Procedure (SOP) before starting their functioning. As per clause no. 5 of Annexure - II of the said SOP for social distancing for offices, workplace, factories and establishments, medical insurance for the workers to be made mandatory, as per the circular”
In this circular, the insurers have been advised to offer comprehensive health insurance policies to individuals or groups to enable the organisations to fall in with the Government’s directions. Also the regulatory board has advised that these comprehensive health insurance plans be created with simple wordings and conditions and at an affordable cost for the stated organisations.It is noted that under Covid-19 coverage a variety of Insurance providers cover hospitalization charges, treatment expenditure, ICU expenses and many more.
To wrap it up
Group health insurance or corporate health insurance policies are purchased as employee benefit packages by the employer. The cost of the premium is much lesser in the Group Health Insurance policy when compared to an Individual health Insurance policy. This is because the insurer’s risk is spread among the fellow policy holders. In the current Covid-19 pandemic era a Group Health Insurance policy can cover from hospitalization to treatment for Covid-19 which can make an employee be less worried about him and the family and focus on the long term goals of the company
Ready to Offer Group Health Insurance That Truly Cares?
At Pazcare, we simplify group health insurance plan for modern Indian businesses. From seamless onboarding to flexible wellness add-ons and mental health support, we help you craft an employee benefits package that actually matters.
- Tailor-made group health insurance plans
- Covers families, pre-existing conditions & maternity
- HRMS integration + Live dashboards
- Mental wellness, OPD, and dental add-ons
- Trusted by 2,000+ growing companies across India
👉 Talk to our benefits expert and build a healthier, happier workplace today.
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