Group medical insurance plans offered by a company as the employer provide financial protection against healthcare contingencies to the employees. In some companies, the coverage extends to the families of the employees. Group medical insurance policies are attractive benefits, the employer offers to employees.
Though medical insurance is one of the crucial social welfare areas, group medical insurance is not a mandatory requirement across all sectors, be it the organized sector or unorganized sector, and for businesses across their sizes. However, many organizations, business groups, banks, housing societies, and large companies offer group health insurance policies to their employees and their families as a part of their employee welfare program. Most companies see this as an employee retention and tax incentive tool.
For businesses with more than 50 full-time employees, it’s mandatory to provide health insurance coverage to employees. They may have to pay penalties for not providing health insurance benefits to employees. Companies with less than 50 full-time employees are not legally obliged to provide health insurance coverage to employees. However, providing the benefit of health insurance to employees can help businesses to save taxes. Companies also have the flexibility to pay a premium at their convenience, either monthly, quarterly, half-yearly, or yearly.
Additional Read: How does a Group Health Insurance benefit an organization?
What is important to understand
When referring it to as a ‘tax incentive’ tool, it’s important to understand that group medical insurance plans can be of two different types – contributory and non-contributory. Contributory plans are employer-sponsored medical insurance plans wherein an employee has to pay part of the premium. On the other hand, non-contributory plans require the employer to bear the entire premium cost on behalf of employees.
Depending on the type of plan chosen, the employer can avail of the tax benefit according to the cost they have incurred. However, industry experts recommend that small businesses having less than 50 full-time employees’ can avail themselves of group medical insurance coverage for their employees if they meet all the coverage requirements to make it beneficial for the company as well.
Offering health insurance benefits to employees can help in increasing productivity at work, and retaining the good talent required for the growth of the business. The well-being of employees can contribute a lot to the success of the business.
Also, offers Group health insurance plans at a subsidized rate as the risk spreads across a large number of employees. This policy can provide a fixed amount of healthcare coverage to employees. By covering the cost of hospitalization and healthcare treatments needed due to an illness or an injury. Coverage can include other members of the family including dependent parents, with similar benefits. However, policy coverage and benefits may vary.
Who can be covered under Group Medical Insurance?
Group medical insurance is a type of health insurance that provides coverage to a group of people, typically employees of a company, organization, or association. Under a group medical insurance policy, members of the group are covered for various medical expenses, including hospitalization, surgery, and medication costs.
The individuals covered under a group medical insurance policy typically include all eligible employees, along with their dependents, such as spouse, children, and parents. In some cases, the policy may also cover retired employees and their dependents.
Employers typically procure group medical insurance policies to furnish healthcare benefits to their employees. The employer and the employees share the expense of the policy. Employers may choose to offer different levels of coverage to their employees, depending on their needs and budget.
Group medical insurance policies often offer lower premiums and more comprehensive coverage compared to individual health insurance policies. The risk becomes more affordable for everyone because it is spread across a larger group of people.
Written By-
Mayank Sharma
MBA Finance
He is a professional who brings extensive knowledge and expertise to the field of group health insurance. He has dedicated 7years to helping individuals and businesses navigate the complexities of insurance. Having worked closely with numerous clients and insurance providers, he deeply understands the nuances of group health insurance policies. With a reputation for providing insightful and informative content, he leverages his industry experience to educate readers about the importance of group health insurance and its benefits. Through their articles, Mayank Sharma aims to empower individuals and businesses to make informed decisions about their healthcare coverage, ultimately promoting healthier and more secure communities.
