While most group health plans need a minimum of 20 members, startups usually have only 8-10 employees. If you are an owner of a startup then you might be contemplating the possibility of getting a group health insurance policy. However, startups can always opt for a group plan which covers both the employees’ and their immediate family members to reach the minimum limits required by the insurer.

There are several advantages to the family members being covered under group health policy, over the individual insurance policy:

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See – How many employees a company should have to buy a Group Health Insurance Policy?

A Case of Selecting Group Insurance for a Startup

Tech Solutions is a successful startup which started 2 years back in 2014. Based out of Bangalore and with employee strength of 15, it offers software development and consultation solutions to its global clients. It has good growth potential with several hardworking employees who put in long working hours each day. The company is now contemplating getting a group health insurance policy for its employees, but is doubtful if it is even possible to buy a group policy for a startup of only 15 employees.

Consulting with an advisor the company discovers that despite being a startup, it is possible and beneficial to get a group health plan.

  1. Tech Solutions can get a group health plan which will cover both their hardworking employees and their immediate family, hence meeting the requirement of minimum 20 people. Moreover, an individual is more likely to continue working in a company if their family too is in favor of the benefits accrued from the job.
  2. The expense of a group health plan may seem larger to a startup as compared to other bigger companies. However Tech Solutions can take advantage of tax benefits, for the extra amount they will spend on the group insurance.
  3. Counting the family members with the employees if the group plan is for 30 members while taking the policy, then even if the members reduce to only 20 members by next year, the policy will continue with a reduced premium.
  4. Tech Solutions is in a growth phase and expects to increase business as well as the number of employees. In case the employee strength increases from 30 to 100 by next year, then the premium amount will also increase. But the company will also be eligible for a bonus such as a premium discount, if no claims have been made in the previous year.

It is not only possible for Tech Solutions to buy a group health insurance, but also helps the startup retain its most valuable assets in this growth stage – its employees. Additionally, the group health plan brings the employee compensation policies of Tech Solutions closer to its larger counterparts.

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