Did you know that healthcare costs in India are soaring at an alarming rate of 14% every year? This is leaving many people anxious about their medical expenses. From hospital bills to doctor visits, the financial strain can be overwhelming.
That’s where group health insurance comes in as a real lifesaver!
When employers offer this benefit, they’re not just providing employees with a health plan—they’re offering peace of mind. For employees, this means better health and less stress. For employers, it’s a way to show they care about their team’s well-being, making them feel valued and supported.
In this article, we’ll explore why offering this benefit is a win-win situation for both employees and employers.
What’s Group Health Insurance?
Group health insurance is a type of health coverage that a company or organization provides to its employees or members. Instead of each person buying their own individual health insurance, the company buys one big insurance policy that covers everyone in the group. The company then shares the cost of the insurance with the employees, making it more affordable for everyone.
Let’s use a simple example to make it clearer!
Suppose you work at a company with 10 employees, and the company decides to buy a group health insurance policy for everyone.
Cost of Group Health Insurance
The company buys a group health insurance plan that costs ₹1,00,000 per year for the whole group of 10 employees. So, the total cost of the policy is ₹1,00,000.
Company’s Contribution
The company decides to pay 80% of the total premium (because it wants to help employees with the cost), which means it pays ₹80,000.
Employee’s Contribution
The remaining 20% of the premium (₹20,000) is split equally among the 10 employees. So, each employee would pay:
Rs. 20,000/10 = Rs. 2,000
So, each employee has to pay ₹2,000 for the whole year.
Breakdown
Total Cost of Insurance: ₹1,00,000
Company Pays: ₹80,000
Employees Pay: ₹20,000 (₹2,000 per employee)
Status of Group Health Insurance in India
In India, many companies offer group health insurance to their employees, but the quality of these plans needs to be better. Most companies provide only basic coverage, leaving employees at risk if they need serious medical help.
A recent report found that less than 5% of companies in India provide comprehensive or complete health insurance to their employees. This means that only a tiny fraction of workers get health insurance that truly covers all their medical needs.
Key Findings from the Report
- Less than 5% of firms provide comprehensive healthcare plans to employees.
- The average sum insured provided by employers in India is just Rs 3 lakh.
- 85% of employees with chronic illnesses feel unsupported by their employers.
- Only 25% of companies extend health insurance to employees’ parents.
- 56% of companies provide maternity benefits.
- Less than 1% of companies offer holistic coverage for people with disabilities.
- 12% of companies offer employer-sponsored telehealth services.
- Less than 1% of companies provide OPD (Outpatient Department) coverage.
- 57% of companies offer discounted health checkups to employees.
- 56% of companies provide dental and vision benefits.
- 60% of companies offer discounted medicines for employees.
- Only 10% of companies provide mental well-being benefits, such as:
- Telehealth services for mental health.
- Other mental wellness programs.
However, more companies are starting to realize that providing health insurance to workers is important, especially after the pandemic.
Benefits of Group Health Insurance for Employers
Let’s look at the key reasons why employers should offer group health insurance to their employees.
- Attracting and Retaining Good Employees
If a company offers group health insurance, it becomes more attractive to new workers. Many people want to join companies that take care of their health. Employees also feel more loyal to companies that provide such benefits.
When workers know their health is in safe hands, they are more likely to stay with the company. In short, health insurance helps attract good employees and keep them for longer.
- Happy Employees, Happy Workplace
When employees are happy, they work better. Health insurance makes employees feel secure because they know they have support in case they get sick. This peace of mind leads to less stress and more focus on work.
Happy employees are also less likely to take time off because they are worried about medical costs. So, a company with group health insurance will see healthier and happier workers. And when employees are happy, the workplace becomes more positive and productive.
- Cost-Effective for Employers
Group health insurance is usually cheaper than individual health insurance. Since the company buys insurance for a large number of people, the insurance company offers lower rates.
For employers, this means they can provide health coverage to employees at an affordable price. It’s also cost-effective in the long run because it helps prevent bigger health expenses that could arise if employees didn’t have insurance.
- Promotes Goodwill and Company Reputation
When a company offers health insurance, it sends a message to the public. It shows that the company cares about the health and well-being of its employees. This builds a strong reputation and promotes goodwill.
A company known for taking care of its workers is seen as a responsible and caring employer. This positive image helps the company attract talent, customers, and even investors who appreciate social responsibility.
- Boosts Productivity
Employees who have health insurance are healthier and take fewer sick days. If an employee is sick but cannot afford treatment, they might come to work anyway. This can lead to low productivity and the spread of illness in the workplace.
But with health insurance, employees are more likely to seek medical help early, which can prevent serious illnesses from affecting their work. Healthy employees are more energetic and productive, helping the company grow. So, group health insurance not only keeps workers safe but also boosts the company’s performance.
- Tax Benefits for Employers
One of the biggest advantages for companies offering group health insurance is the tax benefits. According to Indian tax laws, businesses can claim deductions for the premiums they pay for their employees’ health insurance.
This means that the money spent on group health insurance helps reduce the company’s tax burden. This is a win-win situation. Employers get to save money on taxes and provide a great benefit to their employees at the same time.
Benefits of Group Health Insurance for Employers
If you’re wondering why group health insurance is great for employees, here are the top reasons!
- Budget-Friendly
One of the best things about group health insurance is that it’s affordable. Individual health insurance can be expensive, but with group health insurance, the company usually pays most of the cost.
This means employees only pay a small part of the premium, making it much cheaper than individual health insurance. It’s a budget-friendly option because employees get the protection they need without breaking the bank.
- Coverage for Family
Many group health insurance plans don’t just cover employees—they also cover their families. This means that employees can get health insurance for their spouse, children, and sometimes even their parents.
Health insurance for your family can be very expensive if you have to buy it separately, but with a group plan, it’s much more affordable. Family coverage is a huge benefit because it keeps everyone in your household protected from big medical costs, all under one plan.
- Great Motivation Tool
When an employer offers health insurance, it shows that they care about their employees. This kind of benefit is a great motivator. Employees who feel supported are more likely to be happy at work, work harder, and be loyal to the company.
Health insurance is a big reward for employees because it gives them peace of mind and helps them focus on their jobs without worrying about medical costs.
- Coverage for Pre-Existing Conditions
One of the most important benefits of group health insurance is that it covers pre-existing conditions. Pre-existing conditions are health problems that someone already has before they get insurance. Many individual health plans don’t cover these conditions, which can be a big problem if someone needs treatment.
However, with group health insurance, employees can be covered for these conditions from day one. Whether it’s diabetes, asthma, or any other health issue, employees don’t have to worry about being denied coverage. This makes group health insurance especially important for people who already have health problems.
- No Waiting Period for Benefits
Another big plus of group health insurance is that there is usually no waiting period for getting full benefits. Many individual health insurance plans make you wait for months before you can use certain benefits.
But with a group plan, you get instant coverage as soon as you sign up. This is especially helpful for employees who may need immediate medical care.
Tips for Employers When Offering Group Health Insurance
To make sure you’re getting the most out og group health insurance, here are some simple yet smart tips for employers:
- Choose the Right Plan for Your Team
Not all group health insurance plans are the same. Some are more basic, while others offer extra benefits. Before picking a plan, consider your team’s needs. Are they mostly young and healthy, or do they have families and need more comprehensive coverage? Choose a plan that fits your employees’ health needs and your budget.
- Include Family Coverage
Offering health insurance for employees’ families is a game-changer. It boosts employee satisfaction and shows that you care about their loved ones too. Make sure your plan covers spouses, children, and, if possible, parents. This extra benefit helps employees feel secure about their family’s health, making them more loyal to your company.
- Keep Employees Informed
Employees need to understand what their health plan offers. A plan is only valuable if employees know how to use it! Hold information sessions to explain coverage, co-pays, and how to file claims. Clear communication leads to happy employees who know they can rely on the health benefits provided.
- Offer Preventive Care Benefits
Encourage healthy habits by including preventive care like health check-ups, vaccines, and screenings in the insurance plan. Preventive care helps catch health issues early and reduces future medical costs. Plus, healthier employees mean a more productive workforce!
- Review Your Plan Regularly
Healthcare needs change, so it’s important to review your plan every year. Look at what’s working and what’s not. Ask your employees for feedback and see if any adjustments are needed to make the plan even better.
Conclusion
In conclusion, offering group health insurance is a smart investment for both employers and employees.
From the employer’s point of view, offering group health insurance helps attract top talent, reduce turnover, and boost productivity. For employees, it provides affordable healthcare, financial security, and peace of mind. Together, it creates a situation where both employer and employee thrive, fostering loyalty and a healthier workforce.
