- Calculate Group Health Insurance
- Factors Affecting The Cost
- Average Cost in India
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Group Health Insurance in India
According to WHO, each year close to 55 million Indians are pushed into poverty due to out-of-pocket expenses on healthcare. 17% of Indian households face catastrophic healthcare costs and are barely ever able to recover from the expenses. About 40% of Indians are not covered under the Indian government schemes! Also, they are not financially stable to invest in retail health insurance schemes. It is evident that health insurance is no more a luxury, but a necessity. Corporations across the country recognize the need for health insurance across various social-economic strata.
A recent report titled ‘The State of Employee Benefits 2024’ revealed that group health insurance drives India’s health insurance story. To support this statement here are some simple statistics,
- 1 Crore Indians availed retail health insurance plans in the past 3 years
- as compared to
- 10 Crore Indians who were added to group health insurance during the same tenure
Companies are pushing an employee-centric work environment and focusing on employee retention. One major reason for employee retention is healthcare perks. Knowing the cost of group health insurance per employee is one key factor in designing job offers for employees. This article is a window into how companies calculate group health insurance costs to provide efficient medical support.
Key Takeaways
- About 40% of Indians are not covered under the Indian government schemes!
- 1 Crore Indians availed retail health insurance plans in the past 3 years
- As compared to 10 Crore Indians who were added to group health insurance during the same tenure
- Factors like adequate coverage and company size contribute to the cost of group health insurance
Group Health Insurance Is A Non-Negotiable: IRDAI Mandate
COVID-19 nudged the Government of India to mandate employers provide group health insurance to their employees. IRDAI further provided guidelines ensuring every employee is protected against medical emergencies and is covered against expenses such as OPD care, diagnostics, and more.
This move benefits employers as providing group health insurance to employees helps them retain employees and offers companies tax rebates under section 17 of the Income Tax Act.
Factors Affecting Group Health Insurance Cost Per Employee
To calculate group health insurance the below-mentioned factors are important and affect the cost per employee directly.
Provide Adequate Coverage
Most small to mid-size organizations in India offer a minimum sum insured amount of INR 1 to 3 Lakhs which isn’t considered enough. However, the latest statistics are showcasing a 66% increase in the median sum insured.
Employee Strength and Company Size
According to ‘The State of Employee Benefits 2024’ some of the top companies in India spend just 2% of their salary budgets on employee healthcare and benefits.
Cost Sharing Under Group Health Plans
Limitations such as co-payments, deductibles, and sub-limits under a group health insurance plan contribute to group health plan costs born by the employer.
Family Coverage Option
It depends from employer to employer the kind of coverage they wish to provide to their employees. Some group health plans cover ESCP (employee, spouse, child, parent) policies while others may offer ESC (employee, spouse, child) or ESC+P (employee, spouse, child + voluntary parent) policies.
Add-on Coverage Options
Providing coverage against critical illnesses, accidental injuries and hospitalizations, and other such add-ons adds or subtracts the overall costs for group health insurance plans per employee.
Average Cost Of Employer-Provided Group Health Insurance Per Employee In India
Multiple factors govern the cost of group health insurance plans per employee such as:
- Sum insured amount
- Coverage benefits
- OPD care
- Add-ons
- Coverage for pre-existing diseases
- Family cover size, and more
The average group health insurance cost ranges between INR 10,000 to 25,000. While younger employees of an organization may avail of cheaper group health plans, older employees with pre-existing ailments might have to face the upper end of group health premiums.
Wrapping It Up
Group health insurance is essential for the overall well-being of an employee and organizations are paying attention to such details. Employee retention increases manifold when employers take care of their employees and their families. Purchasing a group health plan affects the budgets of corporations and thus it is important to calculate group health insurance cost per employee.
To enquire about group health insurance for your organization, call PolicyX insurance experts today and get the best suggestions.
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How Much Does Group Health Insurance Cost Employer Per Person?: FAQs
1. How is group health insurance cost calculated per employee?
Group health insurance cost per employee is based on many factors such as the sum insured, company size, family coverage offered, riders and add-ons, etc.
2. What is the minimum number of employees required to purchase a group health insurance?
As per IRDAI, a minimum of 20 employees is mandatory to purchase a group health insurance.
3. Who pays the premiums for a group health insurance plan?
Group health insurance plan premiums are paid by employers offering their employees cost-effective plans to safeguard their health and manage their finances better.
4. Do employees have to undergo a health check-up to purchase a group health insurance plan?
Employees do not have to undergo a pre-medical health check-up to avail of a group health insurance plan.
5. Are pre-existing health conditions covered under group health insurance plans?
Depending on the type of group health insurance purchased by your employer, pre-existing conditions may be covered from day 1 of health coverage or be covered after serving a specific waiting period.
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Written By: Simran Kaur Vij
Simran is an insurance expert with more than 4 years of experience in the industry. An expert with previous experience in BFSI, Ed-tech, and insurance, she proactively helps her readers stay on par with all the latest Insurance industry developments.
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