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Is Group Health Insurance Mandatory for Employees in India?


Summary

Group Health Insurance Mandatory

Group health insurance: Group health insurance compensates the employees in case of hospitalization due to illness or accident. Group health insurance would be given to a group for which the premium would be paid by the employer of the group. Group health insurance is usually taken by employers to cover their employees as a part of employee benefits. The premium under the group health insurance policy would be borne by the employer whereas the employees would enjoy the health insurance coverage.

During the COVID lockdown period, the government of India has made group health insurance mandatory for their employees in those companies operating during the lockdown. IRDA has thereby launched a separate group health insurance policy that covers the covid treatment. The insurance regulatory and development authorities of India have made group health insurance mandatory for companies operating during the covid period. The group health insurance policy is known as the Group Health Assure, which can be offered to a group of people working in an organization during the covid period.

Is group health insurance compulsory?

Yes, as per the government of India mandate every organization working during the covid lockdown period should have a group health insurance policy for its employees. In addition to this, the Insurance regulatory and development authority of India has directed all the insurance companies to cover the covid-related hospitalization expenses. The COVID-related treatment is an exclusion in the health insurance policies and therefore IRDA has made it clear that every insurance company should cover the covid related treatment even though it is a pandemic.

Group Health Assure:  IRDA has launched a group health insurance policy known as Group Health Assure to provide group health insurance cover in particular for COVID hospitalization to the employees working during the covid lockdown period. The group health assure policy covers the hospitalization expenses related to covid and other allied expenses.

The policy would also cover the following treatments:

  • Covid hospitalization expenses up to the sum insured mentioned under the policy
  • Home care treatment expenses if it is recommended by the treating doctor. The home care treatment decision has to be taken by the treating doctor for the claim to be payable.
  • Medical expenses towards alternative treatment such as AYUSH would be paid under the group health assure policy.
  • Pre hospitalization medical expenses and post hospitalization medical expenses.

The entry age under the group health assure policy was 18 years minimum and 65 years maximum as per the product design and underwriting policy of the company. Dependent children can be covered from day 1 of age to 25 years of age under the same policy. In addition to this there would be no room rent coverage under the group health assure policy.

Advantages of taking group health insurance for employees: Even though taking group health insurance policy is not mandatory now, it is advisable to take the group health insurance policy by the employers to avail the below advantages.

  1. Free health insurance: The major advantage for employees is that they get free health insurance. In normal times the premium to be paid for a retail health insurance policy would depend on the age, medical history and sum insured chosen by the insured customer. In case of group health insurance the premium would be paid by the employer whereas the employee gets to avail the coverage on free.
  2. Option to add family members: The other advantage of group health insurance is that the family members also can be added. If the policy was taken on a family floater basis, the family members can be added during the inception of the policy or during the policy period if there is any event happening such as childbirth and marriage. This advantage is possible under the group health insurance policy and the premium might be paid by the employer. Parents and parents in law can also be added under the group health insurance to avail the protection against covid and other illnesses.
  3. No waiting period: Another advantage of group health insurance is that there would be no waiting period under the policy. Most of the diseases are covered from day 1 which is beneficial to the employees or their family members having adverse health conditions. Every retail or personal health insurance policy would have a waiting period ranging from 30 days to 4 years. There are many waiting periods such as initial waiting period, specific disease waiting period, pre existing disease waiting period and maternity waiting period. All these waiting periods can be waived off under the group health insurance policy. But for the covid group health insurance policy, there would be a waiting period of 15 days which varies from one insurance company to another.
  4. Maternity and newborn cover: Maternity and newborn cover is available under the group health insurance policy which benefits the spouse of employees or female employees working in the organization. The maternity and newborn cover would only be available if it is selected at the time of purchasing the group health insurance policy. This cover can be availed immediately or after a certain waiting period known as maternity waiting period.
  5. Preventive health care benefits: Preventive health care benefits such as Health camps arranged by the insurance companies would benefit the customers as they would be knowing their health conditions and it would help them to take remedial actions. Preventive health care benefits act as a boon to the employees as their health conditions would be known to themselves to take any corrective action.
  6. Cashless hospitals: The major advantage of mandatory group health insurance is the cashless claim settlement facility which can be availed in any of the network hospitals for cashless hospitals empanelled with the insurance company. Cashless claim settlement facility can be availed on production of health cards which would be shared by the insurance company to all the members of the group health insurance policy.

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Susheel Agarwal

Namaste. I'm Abhinay Nedunuru, a Fellow of the Insurance Institute of India with a passion to make insurance simple and crisp. I write mostly on insurance and investment. I have a passion for teaching and training in particular to insurance. I'm currently doing my PhD from IIM in Marketing Management.