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Who is not Eligible for Group Medical Insurance in India?


Summary

not-eligible

Group medical insurance is a form of health insurance taken by a group of members under a single master policy. The group medical insurance would compensate the members in case of any hospitalization due to illness or disease up to the limit mentioned under the policy.

The eligibility for group health insurance differs from one insurance company to another, but most of insurance companies have the minimum number of lives required for group health insurance conditions. These conditions have to be satisfied by the customer before taking the group medical insurance policy in India. The company’s health insurance requirements decide the coverage under the group health insurance policy in India.

Let us understand who is not eligible to get group medical insurance in India:-

  1. Family members forming a group: The members of a family forming a group and requesting group health insurance are not allowed as the group is formed with the sole purpose of availing health insurance policy.

    The major requirement for group health insurance is that the company should be registered or there should be an employee-employer relationship or non-employee-employer relationship. But in the case of family members forming a group and satisfying the mere requirement of group health insurance policy conditions, they would not hold.

    For instance, if you think of forming a group with your family members to avail the group health insurance policy, then the same would not be permitted by the insurance companies as there is no employer-employee relationship. The groups formed for the sole purpose of taking group health insurance would not be considered under the group health insurance policy.

  2. Family businesses without registration: The other case is when the family businesses without registration want to avail the group health insurance policy. There are many family businesses in India which are thriving without any government accredited registrations and are working solely on identification basis. These family businesses do not have registration under the companies act or any other relevant act preventing them from being considered as businesses.

    For instance there are many small hotels in India which are run by families but without proper registration. These hotels cannot avail the group health insurance policy as they are not having an employee-employer relationship. These family businesses can purchase group health insurance policies if they registered as an entity and satisfy the minimum lives requirement. The minimum lives required to avail a group health insurance policy is 7 in most of the insurance companies.

  3. Sole Entrepreneur: In case of sole entrepreneur, the family members cannot avail the group health insurance policy as they would not be the employees of the organization. If the family members are a part of the organization then they can be included in the group health insurance policy otherwise they would be considered as dependents and can only be added as dependents to the proprietor.

    Most of the business entities in India are registered as sole proprietorship where the owner of the entity would carry out most of the activities of the entity and the family members might assist him/her in his day to day activities. To avail group health insurance in case of sole proprietorship there should be at least 7 lives under the policy.

  4. Forming groups only for insurance purposes: The other case when the group health insurance policy would be denied is when a group is formed solely for the purpose of taking a group health insurance policy. Group health insurance policy is given to the groups which have a common goal and work for an entity. If a group is formed solely to avail group health insurance, then it would not be considered as the group by the insurance companies. The associations or NGOs can be considered for the group health insurance even though they do not have the employer-employee relationship. This is because the groups are not formed with the sole purpose of availing group health insurance.
  5. Minimum number of lives: The group health insurance eligibility criteria in India is to satisfy the minimum number of lives criteria. The minimum number of lives that are required to avail group health insurance is 7 in most of the insurance companies. As per the rules of Insurance regulatory and development authority of India, it is mandatory to have at least 7 lives under the group health insurance policy.

The minimum number of lives conditions is different for different insurance companies and it is advisable to check with the insurance company before purchasing the group health insurance policy.

Minimum number of lives condition applicability: The minimum number of lives condition is applicable only at the time of taking the group health insurance policy and would not be considered only if the policy is in force. For example if company A has taken a group health insurance policy with  7 lives but after 1 month of period, one employee has left the organization bringing down the total number of lives to 6 below the requirement level.

In this case the insurance company would not cancel the group health insurance policy even though the requirement is not satisfied. It is important to note that the minimum number of lives requirement is only at the time of taking the group health insurance policy.

Addition of family members in the group health insurance policy: The other important thing to note is that the addition of family members under the group health insurance policy would be permitted if the policy was taken including the family members.

For instance if the policy is taken only for the employees of the organization, later the family members cannot be added to the group health insurance policy even on payment of an additional premium as the policy is taken only for the employees of the organization. Hence, it is advisable to check with the insurance company before taking the group health insurance policy to make sure that your requirements are being met.

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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.