All You Need To Know About Group And Employee Health Insurance


With rising cases of lifestyle diseases and soaring costs of healthcare facilities, health insurance has become an indispensable part of our lives. However, for some reason, the penetration of health insurance in India has remained low perennially, with estimates suggesting that not even one-fourth of the population is adequately covered against the health-related contingencies.

To address the issue, many organisations/ employers have started providing group/employee health insurance plans to safeguard its employees against unforeseen health issues, accidents, mishaps etc. In some cases, the coverage is extended to even the family members of the employees.

What is group insurance?

Before we dive into the importance and benefits of a group insurance policy, let’s first understand what a group or employee health insurance is:

Unlike an individual plan, a group health insurance offers coverage to a certain number of people or employees together under a large health insurance umbrella. In a group insurance policy, all members of the group are provided an insurance cover at a reduced cost as the insurer’s risk is spread across a big number of policyholders. Mostly, the premiums for such policies are paid by the employer, but in some cases, beneficiaries may also be asked to bear a small part of the premium.

Advantages of a group health insurance policy

Now, let us take a look at the benefits of a group/employee health insurance policy from the perspective of employees as well as the employers:

Employer’s perspective:

Tax benefits – Employers can avail several tax deductions – under various sections of the Income Tax Act of 1961 – for providing group health insurance to its employees.

Improves employee retention – Employee retention is becoming increasingly difficult in recent years. However, by providing health insurance benefits to its employees, an employer can control the attrition rate to a large extent.

Positive reinforcement – In the age of spiralling costs, providing employee health insurance may act as a positive reinforcer and will go a long way towards boosting the motivation levels of the employees.

Lower premiums – A group health insurance plan on an average has a lesser premium amount as compared with individual insurance plans. This is because the insurer’s risk is spread across a large group of beneficiaries.

Employee’s perspective:

Default health cover- Since the insurance cover under a group/employee health insurance is provided to all the group members, it is beneficial for those who otherwise cannot afford a Mediclaim policy.

Includes pre-existing medical conditions- Most individual health insurance plans exclude pre-existing medical conditions as a part of its policy. However, the same is not true for group health insurance plans since it covers all pre-existing medical conditions right from the date of joining of the employee.

Maternity coverage- Usually, normal health plans do not provide maternity benefits and you may have to purchase a separate policy for that. But group health insurance plans very often provide maternity coverage, which can be of great help to the female employees of a company.

Common features of employee health insurance policies

Although it varies from one organisation to another, here is a list of common features and inclusions that are invariably found in most employee health insurance policies.

  • Covers pre-existing illnesses and maternity-related complications
  • Offers cashless facilities in its network of hospitals
  • Covers medical benefits not only for the insured employee, but also his/her spouse, dependent children and parents
  • Ancillary charges such as day-care, ambulance charges, oxygen, operation theatre rent, etc are also covered
  • Additional charges like room rent, diagnostic tests, drugs, and medications are also included

How does a group health insurance works?

Usually, a group or employee health insurance offers a fixed amount of sum to the employees in case he/she or any of its family member is hospitalised or diagnosed with a health condition covered by the policy. The sum assured is generally based on the salary package of the employee and can be increased by paying an extra amount of premium.

In a nutshell, if you have both an individual health insurance as well as a group health insurance policy, it’s advisable to claim from your group insurance first. In case you want to ensure adequate health coverage for your family, you can purchase a Group Jeevan Suraksha policy offered under the pocket insurance category from Bajaj Finserv by paying an affordable one-time premium. These are short-term insurance plans designed to cater to the precise requirements of the consumers.

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