Do I Need to Get Health Insurance for My Employees?


Having health insurance coverage makes our lives a lot easier. Depending on the kind of insurance plan you have, you don’t have to worry about visiting a doctor if you’re feeling unwell or undergo surgery because your insurer will cover the cost. During the pandemic, health insurance has been able to save the lives of millions. 

But access to medical insurance is a right most people don’t know they are entitled to. Since lockdown restrictions were lifted in 2020, the Insurance Regulatory and Development Authority of India (IRDAI) made it mandatory for all companies to offer health insurance to their employees. This was conveyed via a Circular issued on 1 April 2020. 

Key points regarding employee health/medical insurance

  1. All individuals employed in the organised sector earning Rs. 21,000 or less per month and working for a company covered by the ESI scheme, are eligible to join the Employee State Insurance (ESI) health insurance plan as per the Employee State Insurance Act, 1948. 
  2. According to the April 2020 IRDIA Circular, employers must provide medical insurance to all employees earning more than Rs. 21,000 per month.
  3. This insurance coverage is not only mandatory for the duration of the pandemic. Employers must abide by the new Standard Operating Procedures (SOPs) set and continue to provide medical/health coverage to employees. 
  4. All General and Health Insurance companies are also advised to offer comprehensive insurance policies either to individuals or groups to help organisations comply with the IDRIA circular. 
  5. Additionally, they have been asked to offer comprehensive health insurance products that are simple for the layman to understand with reasonable conditions at affordable costs. 

Find out whether your company is covered under the ESIC scheme.

What is the Employee State Insurance Corporation (ESIC)?

  1. Individuals employed in the formal sector, earning Rs.21,000 or under monthly, working for a company that is covered by the ESI scheme can enrol in the medical insurance programme offered under the ESI Act. 
  2. Both employees and employers contribute to the insurance program, and an insurance individual can avail of the benefits of the insurance from the ESIC.
  3. A person insured under the ESI Act is entitled to a number of benefits, including sickness and maternity benefits (when applicable), disablement benefits under the Occupational Injuries Scheme, medical benefits etc. Read the full list of benefits here.

What are the different health insurance options available?

  1. Individual Health Insurance: The kind of insurance you buy for yourself.
  2. Family Health Insurance: When you buy medical insurance with coverage for your entire family, it is called Family Health Insurance. 
  3. Group Insurance: This is insurance bought for you and other people as a group. When employers buy Group Health Insurance for their employees, it is called Group Insurance for Employees. 

Most Group Insurance Policies for Employees are free for the insured as the employer pays the annual insurance premiums. Some workplaces may offer add-on insurance for family members of their employees. In such a scenario, depending on the company guidelines, the employee may have to pay the additional premium.

What are the benefits of getting Health Insurance for my Employees?

With the ongoing pandemic, having health insurance is a great assurance for your employees.  

  1. Knowing what kind of coverage and benefits their insurance plan offers will help employees feel more confident about coming to work, despite the health risks involved. 
  2. Having health insurance does not mean your employees do not have to follow COVID-appropriate behaviour, but it is comforting to know that in case they (or a family member) do fall ill, their medical expenses will be covered. This will relieve stress and help increase employee productivity. 
  3. It helps them overcome the hesitancy of returning to work on-site, allowing your company to bounce back to pre-pandemic operations sooner. 
  4. Most Group Health Insurance plans now offer a blend of health and wellness benefits, so you can help your employees remain healthy and fit throughout the year.
  5. Group health coverage has a faster turnaround time on claim processing and pay-out.
  6. No medical pre-screening is required when you join a group medical insurance plan. Usually, insurers require extensive medical checks to test for any pre-existing conditions that may affect your premium. These checks are not required for group medical insurance as these plans offer the same coverage and a flat premium for all those insured. 
  7. There is no waiting period to raise a claim when you are a part of a group health coverage plan. If an employee with a pre-existing condition were to get individual medical insurance for themselves, their plan would have a waiting period clause which would require them to wait a couple of years before they can start claiming the benefits of their plan.  

With the government push to make health insurance a necessity for all companies, many insurance companies have introduced low-cost group insurance plans that small and medium-sized businesses can buy for their employees. We suggest researching the coverage offered by AkcoPolicyBazaarBajaj Finserv, and PolicyBazaar to find the perfect fit for your company size and needs. 

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