Group Health Insurance

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Can startups buy group medical insurance?

Most group health insurance plans need a minimum of 20 members, but many early startups usually have only 8-10 employees. If you own a startup, you can always pick a group health insurance policy that covers both employees and their immediate family members. In doing so, you can reach the minimum limits set by the insurer.

There are several advantages to covering family members under a group health policy instead of buying individual policies for employees:




Cost The premiums of group medical health policies are 20-30% lower than that of individual policies for the same age.
Medical Tests No medical tests are required for anyone to be added to the policy.
Pre-existing Conditions Any pre-existing condition, unless explicitly excluded, is covered from day one.
Maternity Cover Maternity cover is included as part of the policy.

Case Study: Selecting Group Insurance for a Startup

AlphaseTech Solutions is a successful startup, operational since 2018. It is based out of Bangalore and has an employee strength of 15. The company offers software development and consultation solutions to global clients. 


The company wanted to get a group medical insurance policy for its employees. However, it was not sure if a startup with only 15 employees could buy a group health policy. An insurance advisor revealed that AlphaseTech could buy a group health plan for its employees and their immediate family members. This would help it meet the requirement of 20 people. Moreover, AlphaseTech was likely to retain more employees if their families were also happy with the benefits of the job.


While the expense of a group health plan may seem greater to a startup than to larger companies, AlphaseTech could avail of tax benefits for group insurance.


For example, when buying the policy, employees and their family members might total 30. In the next year, even if the total members decreases to 20, the policy could still be continued, with a lower premium.

Bonus to buffer growth

AlphaseTech expects to increase its business size as well as number of employees. If its employee strength increases from 30 to 100 by next year, then its premium amount will also increase. However, the company will be eligible for a discount on this premium if claims made in the previous year were reasonable.

Additional Read: How are premium rates determined for employee group health insurance plans?

Thus, AlphaseTech can not only buy group health insurance, but can also retain its most valuable assets — its employees. Additionally, a group health plan brings AlphaseTech’s employee benefits closer to that of its larger counterparts.

Can startups buy group medical insurance?

Do note that you can buy a group health insurance even if fewer than 20 lives are to be insured. SecureNow specialises in this segment and has products for smaller groups as well. Do drop us a message.