Group Health Insurance for Employees

Does Group Health Insurance for Employees Provide Enough Coverage?

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Health insurance protects against financial losses in the event of hospitalization. The rising costs of medical treatment have made health insurance a necessity rather than a luxury. Expensive medical treatment can exhaust your financial resources. Health insurance has now become an important employee benefit as well. For this reason, most companies are now opting for group health insurance for employees.

What is group health insurance for employees?

Group health insurance for employees covers the employees working for a company or an organization under a master policy bearing the names of the employees and other details. The master policy is issued to the employer or the organization. The premium is borne by the employer either in full or partly.

Under group health insurance, the company is the policyholder, and its employees covered by the policy are the beneficiaries. Employees are covered by the group health insurance policy as long as they work for the company providing it. The coverage ends as soon as the employee leaves the employment of the said company. 

Apart from employer-employee groups, recognized groups such as trade unions, clubs, and associations are eligible for group health insurance. Groups formed exclusively to get health insurance are not eligible for group health insurance.

Features of Group Health Insurance for Employees

The sum insured under group health insurance for employees is applied separately to each employee covered under the policy. Claim taken by any employee does not affect the sum insured by other employees. The sum insured for each employee under group health insurance plans usually ranges between Rs. 1-5 lakhs.

The cover provided by group health insurance can be extended to the family members of the employees as well. The employer can choose to include the spouse, parents, children, and other dependents of the employees in the policy. The sum insured for the family members is the same as that of the employee.

Group health insurance for employees can cover pre and post-hospitalization expenses as well, apart from in-hospitalization expenses. Pre-hospitalization expenses include diagnostic tests, doctor’s fees, and other expenses before hospitalization. Post-hospitalization expenses include medicines, fees for follow-up visits to the doctor, and other expenses incurred after discharge from the hospital. Pre-hospitalization expenses are covered for a period up to 30 days before hospitalization and post-hospitalization expenses are covered for 60 days after discharge.

There are many group health insurance plans for employees providing coverage for daycare treatments and domiciliary hospitalization. Daycare treatments do not require 24 hours of hospitalization. Chemotherapy, eye surgery, and tonsillectomy are common daycare treatments. Domiciliary hospitalization means treatment at home due to the inability of the patient to shift to a hospital or the non-availability of hospital beds.

Group health insurance for employees provides coverage for pre-existing diseases. Every employee named in the policy document gets coverage regardless of whether he/she is suffering from a pre-existing condition. Many group health insurance plans also provide critical illness cover for a plethora of life-threatening conditions. 

Maternity coverage is provided as an add-on benefit in group health insurance plans. The employer has the choice to include maternity coverage in the policy. Maternity coverage compensates for the expenses incurred on birthing the baby, including both normal and C-section deliveries. Newborn baby cover for 90 days from birth is also usually included in maternity cover. A waiting period of 9 months may be applicable depending upon the insurer. 

The low premium is an important feature of group health insurance for employees. Since the risk to the insurer is divided over a group of people, the insurer can provide group health insurance for employees at lower rates. 

Tax deductions can be claimed on the premium paid for group health insurance for employees. The tax benefits are assured under Section 80D of the Income Tax Act. The employer can claim tax deductions for the premium paid for the group health insurance policy either fully or partly. The employee can also claim tax deductions if they pay a part of the premium. The annual limit of tax deductions is Rs. 1.5 lakh.

Benefits of Group Health Insurance for Employee

Individual health insurance may not be affordable for many employees. Group health insurance for employees provides them default coverage against expensive medical treatments. Furthermore, even their family members can get coverage.

Employees suffering from pre-existing ailments either fail to get individual health insurance or get long waiting periods to avail the benefits. Group health insurance provides them instant coverage without a waiting period and no medical screening.

The employees can increase the sum insured under the group health insurance policy or add extra benefits by paying more premiums. Thus, even if an employee is dissatisfied with the sum insured or the benefits, he/she can always pay an additional premium to enhance coverage or the sum insured as per requirements.

Advantages of Group Health Insurance for Employees Over Regular Health Insurance

Group health insurance for employees is cheaper than regular or individual health insurance. The reason is the risk to the insurer in the former category is less than the risk in the latter category. A person not able to afford regular health insurance can get coverage under group health insurance.

Regular health insurance plans have long waiting periods for pre-existing diseases, and many plans do not even cover pre-existing conditions. Group health insurance for employees does not carry waiting periods for pre-existing diseases and provides instant coverage.

The premium and terms and conditions of a regular health insurance policy are based on the individual’s age and medical history. On the other hand, a group health insurance policy for employees has more to do with the organization’s financial strength in purchasing it.

A premium of a regular health insurance policy increases with the advancement in age of the policyholder. The premium of group health insurance for employees does not increase with the advancement in age of the employees.


Group health insurance for employees is affordable and provides a plethora of benefits to both the employees and the employers.

If you are searching for an inexpensive group health coverage that provides a host of benefits apart from group health insurance, then you must check out Vital at


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