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OPD (Outpatient Department) covers medical care where the employee is not admitted to hospital: consultations, diagnostic tests, and minor procedures done in a single visit. IPD (Inpatient Department) covers care that requires a hospital admission of 24 hours or more. Most group health insurance plans in India include IPD cover by default; OPD cover is a separate, optional benefit.
For HR teams designing employee benefits, understanding this split matters because the claims process, reimbursement limits, and tax treatment differ significantly between the two.
What is OPD in health insurance?
OPD stands for Outpatient Department. An OPD claim covers any medical service where the employee receives treatment and returns home the same day without formal hospital admission. Under a group health insurance policy, OPD benefits are typically offered as an add-on benefit or rider, not as core coverage.
Common OPD expenses covered under group policies:
- Doctor consultation fees (general practitioner or specialist)
- Diagnostic tests: blood work, X-rays, MRI, ultrasound when prescribed by a doctor
- Prescription medications purchased at a pharmacy
- Physiotherapy sessions
- Dental and vision care, where included in the policy schedule
OPD claims are almost always reimbursement-based. The employee pays at the point of care, collects original bills and prescriptions, and submits a claim to the insurer or TPA for reimbursement. Cashless OPD is not standard across most group health policies in India, though a few insurers have introduced it for specific hospital chains.
What is IPD in health insurance?
IPD stands for Inpatient Department. An IPD claim is triggered when an employee is formally admitted to a hospital for a minimum of 24 consecutive hours for treatment, surgery, or observation. IPD cover is the core benefit in every group health insurance policy and is not an optional add-on.
IPD coverage typically includes:
- Room rent (subject to per-day limits or room category caps in the policy)
- ICU and HDU charges
- Surgeon, anaesthetist, and specialist fees
- Nursing and ward charges
- Medicines, consumables, and implants used during the admission
- Pre-hospitalisation expenses up to 30 days before admission
- Post-hospitalisation expenses up to 60 days after discharge
IPD claims can be settled cashlessly at network hospitals. The insurer settles the bill directly with the hospital after the employee presents the group health card or policy number at the time of admission. If treatment is taken at a non-network hospital, or if cashless is not approved, the employee claims reimbursement after discharge.
Where do daycare procedures fit?
Daycare procedures are a distinct third category. These are treatments that require a brief hospital admission but are completed in less than 24 hours, such as cataract surgery, chemotherapy, dialysis, or lithotripsy. Under the IRDAI Master Circular on Health Insurance (dated May 29, 2024), daycare procedures are covered under the IPD benefit in group health policies, not under OPD. Insurers are required to maintain a list of approved daycare procedures in their policy schedule.
OPD vs IPD: key differences at a glance
Note: Individual retail health insurance policies (not group) are exempt from GST effective September 22, 2025. Group health insurance premiums remain at 18% GST.
Should HR teams include OPD cover in group health insurance?
IPD cover is non-negotiable in any group health policy. The decision to add OPD cover depends on three factors:
1. Employee utilisation patterns
If your workforce skews younger and healthier, IPD claims will be infrequent. OPD spend, on the other hand, happens regularly: annual health checks, one or two doctor visits per year, pharmacy bills. An OPD rider converts these routine costs into a claimable benefit, which improves perceived value of the policy among employees.
2. Premium vs benefit ratio
OPD riders typically add 10% to 20% to the base group health premium, depending on the insurer and the per-employee OPD limit. If the OPD limit is INR 3,000 to INR 5,000 per employee per year, calculate whether actual utilisation at your organisation justifies that premium outlay. For companies with 50 or more employees, aggregated OPD utilisation data from the previous year can inform this decision accurately.
3. Claims experience and insurer partnership
Plum works with group health insurance partners including ICICI Lombard, HDFC ERGO, Bajaj General Insurance, Star Health, Niva Bupa, and Aditya Birla Health Insurance. OPD rider availability, sub-limits, and cashless access vary across these insurers. Reviewing the policy schedule, not just the brochure, is necessary before committing to an OPD rider.
How OPD and IPD claims work in practice
Understanding the claims process helps HR teams set employee expectations before an illness occurs.
OPD claims process
- Employee visits doctor or diagnostic centre and pays out of pocket
- Collects original bills, prescriptions, and doctor's letterhead
- Submits documents to insurer or TPA within the filing deadline specified in the policy (typically 30 to 90 days from the date of service)
- Reimbursement is credited to the employee's registered bank account
HR teams should share the claim filing deadline and the minimum bill amount (if any) during onboarding, since most OPD rejections occur because employees file after the deadline or submit photocopies instead of originals.
IPD claims process (cashless)
- Employee or family member informs Plum or the insurer's TPA helpline before planned admission, or within the specified hours of emergency admission
- Hospital sends a pre-authorisation request to the insurer with estimated treatment cost
- Insurer approves or queries the request; Plum's median pre-authorisation TAT is 45 minutes
- Employee receives treatment; insurer settles the final bill directly with the hospital at discharge
- Non-medical charges (food, attendant bed, telephone) are payable by the employee
Frequently asked questions
Is OPD cover mandatory under IRDAI rules?
No. The IRDAI Master Circular on Health Insurance (May 29, 2024) does not mandate OPD cover in group health policies. Insurers are required to offer it as an option and to disclose its terms clearly, but inclusion is at the employer's discretion.
Can employees claim both OPD and IPD expenses for the same illness?
Yes, in certain cases. Pre-hospitalisation and post-hospitalisation expenses, such as diagnostic tests and follow-up consultations, are covered under the IPD benefit even if they occur outside the hospital. OPD benefits cover routine outpatient visits that are unrelated to a hospitalisation episode. There is no double-claiming for the same bill.
What happens to OPD claims if an employee resigns mid-year?
Coverage ends on the last working day unless the employer has structured a COBRA-style continuation benefit. Any OPD bills dated before the exit date and submitted within the policy filing window are still reimbursable.
Are teleconsultations covered under OPD?
This depends on the specific insurer and policy year. Several insurers added teleconsultation coverage post-2021. Check the policy schedule or addendum for the specific definition of 'consultation' before communicating this benefit to employees.
How Plum approaches OPD and IPD cover
Plum structures group health insurance for organisations starting at 7 employees. Every policy includes IPD cover as the core benefit. For companies that want to add OPD, Plum's team compares available rider terms across insurer partners, including sub-limits, reimbursement timelines, and whether diagnostic labs are in-scope.
For IPD claims, Plum's in-house claims desk manages pre-authorisation directly with partner hospitals. The median pre-authorisation turnaround is 45 minutes. Claims NPS among Plum-insured employees is 79, based on post-settlement surveys.
To understand how OPD and IPD cover works for your specific team size and industry, see group health insurance for companies or explore how group health insurance works.
