It is highly necessary to have health insurance in India. Medical care can be costly, and it is not everyone’s fortune to pay sudden hospital bills. Due to this reason, most companies provide their employees with health insurance. But, is group health insurance compulsory for Indian companies?
Most individuals are confused about whether employers are obligated by law to offer health insurance. Some feel that it is solely for large companies, while others assume it’s based on the employer’s discretion. But, there are set government regulations about this. In this blog, we will make clear if group health insurance is mandatory, whom it covers, and why both employees and organisations need it.
What is Group Health Insurance?
A group health insurance policy is an insurance that a company purchases for its employees. It pays for medical bills such as hospitalisation, visits to the doctor, and treatments. This implies that employees do not pay all medical bills individually.
Is Group Health Insurance Mandatory in India?
Yes, as per government regulations, Indian companies are required to offer health insurance to their workers. This regulation began in April 2020, following the COVID-19 pandemic. The government aimed to ensure that employees had medical coverage in the event of health crises.
Which Companies Are Required to Offer It?
All firms with one or more workers are required to provide health insurance. These include:
- Small firms
- Large firms
- Startups
- Shops and factories
No matter how big or small a company is, if they have employees, they must offer a group health insurance policy.
Why is Group Health Insurance Important?
There are many reasons why this insurance is a good idea:
Helps Employees Stay Healthy – If workers have medical insurance, they can get treatment quickly without worrying about money.
Saves Employees Money – Hospital charges can be costly. This kind of insurance pays for them.
Keeps Workers Contented – Workers feel secure and looked after when their employer offers health coverage.
Obeying Government Regulations – Business organisations are compelled to be law-abiding. They may be penalised if they do not offer health insurance.
Improved Work Environment – Healthy workers result in reduced sick days and improved work output.
What Does Group Health Insurance Cover
A group health policy typically covers:
- The cost of hospitalisation – If an employee is hospitalised
- Fee paid to doctors – Consultations with a doctor for treatment or checkups
- Medicines – Certain policies cover the expense of medicines
- Surgeries and treatments – In case an operation is required, insurance can cover it
- COVID-19 and other diseases – Most policies now include coverage for pandemics-related medical expenses
Some businesses also provide insurance that covers employees’ family members. This, however, is based on the company’s policy.
Who Covers the Cost of the Insurance?
Businesses typically cover the cost of group health insurance. Some businesses require employees to contribute a small portion of the cost, but most cover it in full. This makes it a desirable benefit for employees.
What If a Business Does Not Offer It?
If a company breaks the rules, they may have to:
- Pay a fine
- Get in legal trouble
- Lose employee trust
To stay away from these issues, companies need to offer health insurance to employees.
Final Thoughts
A group health insurance policy is not only a regulation—it’s an act of kindness. It makes employees feel secure and saves them money on healthcare. Because it’s required, all companies have to provide it.
If you are employed with a company, check if you are entitled to this benefit. If not, then ask your company about it!
