Employee health coverage for organisations: Types of Employee Insurance Plans

Employee Health Coverage for Organisations

While group and corporate health insurance plans have been around for decades, they were only a few options that Indian employers had. Although some companies choose to protect the well-being and proactiveness of their employees, most employers opted not to cover this plan because it was not mandated.

This was the status quo until recently. The pandemic was the catalyst for a change in government policy on employee health coverage. Therefore, although you can still opt for individual insurance plans, organisations now have the option of an employee-health coverage plan.

Understanding Employees Health Coverage

A group insurance plan, also known as an employee health policy, is basically a package of benefits that employees receive against the employer paying premiums to the policy provider. Both the employer and employee benefit from this arrangement. The former has an assured financial reserve for hospitalisation costs. The employer also receives lucrative tax benefits.

These plans provide employees with comprehensive coverage that protects them against unexpected hospitalisation expenses. They also cover specialist consultation fees. They also include dependent coverage that allows you to extend your protection to all members of your family, but with a premium increase.

Types of Employee Insurance Plans

There are two main types of Indian employee health insurance plans.

  • ESI, or Employee State Insurance, is a type of medical insurance that covers workers in the organized sector. Employee State Insurance Act (1948), which mandates that those earning less than Rs. This plan is available to anyone earning less than 21,000 rupees per month. Both the employer and employee contribute to the plan.
  • Employees earning more than Rs. Group Medical Coverage (GMC) is available to 21,000 employees. This plan allows for a minimum of seven employees to be covered by one group policy. These GMCs were made mandatory by India’s pandemic-initiated lockdown of 2020.

Is Indian law requiring employees to have health insurance?

It is important to remember that Indian employers did not have to provide such coverage for employees before 2020. The pandemic caused this to change. The uncertainty in our everyday lives was magnified by the COVID-19 pandemic. To stop the spread of the virus, the government mandated a national lockdown and work-from home protocols. These events were a catalyst for making employee health insurance mandatory.

All companies were required to offer health insurance coverage to employees in an official circular issued by the Insurance Regulatory and Development Authority of India on 15 April 2020. This circular was part the Standard Operating Procedure (SOP), which outlined the new norms that would apply to workplaces after work resumes. The government gave insurance companies the mandate to create attractively priced, easy-to-understand comprehensive employee health insurance policies that could be purchased to protect the health of their employees. This mandate was put in place to provide adequate financial protection against hospitalisations due to COVID-19 or non-COVID-19 conditions.

Will an Employee Health Insurance Policy be mandatory for both of you?

This question can be answered simply by answering “yes”. Although the pandemic provided the impetus to make such coverage mandatory, the benefits of such plans are well-known even before that transition. Comprehensive health insurance plans for employees can boost morale and increase employee retention. Employees who know they are covered for medical expenses will be more productive. Employers can get a substantial tax rebate if they have group or employee-level health insurance policies. Group insurance plans offer greater coverage and benefits, while also covering more people.

Employees enjoy premium-free coverage, and their employer pays the premiums. This makes this type of insurance the most popular. This coverage is further extended by OPD and dependent coverage. Employers and policy providers handle the insurance claim settlement. Employees are exempt from this hassle. The benefits of employee health coverages extend to both the employee as well as the employer.

Find the right insurance provider

The government of India has made mandatory employee health insurance. However, choosing the right insurance provider can make all the difference in an organisation’s costs and benefits. Employers can choose from the best group insurance plans at Bajaj Finance Limited. Bajaj Finance Limited provides employers with the best group health insurance solutions. Policies from trusted insurers such as Aditya Birla Group and Manipal Cigna are available. These plans include cashless and high claims settlement ratios. They also come with a large network of hospitals that make it easy to access their benefits.

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