Read more of your interests, read less insurance paperwork
Ditch the paperwork with Plum's group health insurance
Click here to know how Plum helps 3000+ HRs ➝

In today's competitive work environment, offering group health insurance has become a staple for companies aiming to attract and retain top talent. Beyond serving as a critical component of an employee benefits package, group health insurance stands as a testament to an employer's investment in their workforce's health and well-being. However, a puzzling trend has emerged, highlighting a significant gap in the utilisation of these insurance policies by the employees themselves.

Underutilisation of group health insurance benefits not only diminishes the perceived value of the insurance package but also represents missed opportunities for employees to access quality healthcare with financial ease. This phenomenon poses pressing questions: Why do employees hesitate to tap into these benefits? And what implications does this behaviour have for both the individuals and their employers?

As we delve deeper into this issue, it becomes clear that the reasons behind low utilisation rates are multifaceted, ranging from lack of awareness and understanding to perceptions of complexity and fear of hidden costs. Unravelling these reasons is crucial for both companies and insurance providers like, which aims to simplify healthcare access through digital-first solutions, to develop strategies that encourage more active engagement with health insurance benefits.

In the following sections, we will explore the key factors contributing to the underutilisation of group health insurance, alongside practical solutions to enhance utilisation rates. By addressing these challenges head-on, employers can ensure their workforce is not only well-covered but also well-informed and confident in using their health insurance to its fullest potential.

Top Reasons for Low Utilisation of Group Health Insurance

Lack of Awareness and Understanding

One of the primary barriers to the effective utilisation of group health insurance is a fundamental lack of awareness and understanding among employees. Many individuals find themselves overwhelmed by the intricacies of their insurance policies, including coverage limits, inclusions, exclusions, and the process for filing claims. This confusion can lead to a reluctance to engage with the insurance benefits, as employees may feel uncertain about when and how they can use their coverage. Enhancing transparency and education around policy details is paramount in overcoming this challenge.

Perceived Complexity of Claim Processes

Another significant deterrent is the perceived complexity and bureaucratic nature of the insurance claim process. The anticipation of filling out lengthy forms, providing extensive documentation, and navigating through multiple channels can discourage employees from initiating claims. This apprehension is often compounded by stories of denied claims or prolonged processing times, further reinforcing the belief that utilising insurance benefits is more trouble than it's worth.

Preference for Personal Doctors and Services

A strong preference for personal doctors and healthcare providers not covered under the group insurance network can also lead to underutilisation. Employees might opt to pay out of pocket for healthcare services to continue seeing their preferred doctors rather than taking advantage of the insurance coverage that requires them to choose from a network of providers. This preference underscores the importance of flexibility and inclusivity in network provider selections.

Fear of Premium Increases

Misconceptions about the impact of claim submissions on premium costs can also play a role in the underutilisation of benefits. Some employees harbor the unfounded fear that utilising their insurance for claims will directly lead to increased premiums for the group, discouraging them from taking advantage of their benefits. Dispelling these myths through clear communication about how premiums are calculated and the factors influencing cost adjustments is crucial.

Satisfaction with Public Health Services

In the context of the Indian healthcare landscape, a preference for public health services over private insurance-covered options is another factor to consider. For some, the perceived quality, cost-effectiveness, or convenience of public healthcare facilities may outweigh the perceived benefits of utilising private health insurance, leading to underutilisation.

Overlooked Benefits and Add-ons

Finally, many employees fail to fully utilise their health insurance due to a lack of awareness of additional benefits and add-ons. Wellness programs, mental health support, preventive care, and other value-added services often go underutilised simply because employees are not aware of their existence or do not understand how to access them. Raising awareness and simplifying access to these benefits can significantly enhance utilisation rates.


Strategies to Enhance Group Health Insurance Utilisation

Comprehensive Onboarding and Regular Information Sessions

The foundation of increasing health insurance utilisation lies in comprehensive onboarding processes and regular information sessions. Employers should implement educational programs that cover all aspects of the health insurance benefits available to employees. These sessions can demystify the insurance policies, cover how to file claims, and highlight the additional benefits that employees might not be aware of. Utilising digital platforms for these sessions can ensure that they are accessible and can be revisited by employees as needed.

Simplifying the Claim Process

To address the perceived complexity of the claim process, employers and insurance providers must work together to streamline procedures. This simplification can involve digitalising claim submissions, reducing the need for extensive paperwork, and providing clear, step-by-step guides. Additionally, offering dedicated support, whether through a helpdesk or insurance liaisons within the company, can make navigating the claim process much more approachable for employees.

Promoting Wellness and Preventive Care Benefits

Encouraging the utilisation of wellness programs and preventive care benefits is not only beneficial for employees' health but can also lead to increased engagement with the insurance policy overall. Employers can promote these benefits through regular health and wellness events, incentives for participation, and clear communication about how these services can be accessed and utilised. Highlighting stories of positive outcomes from these programs can also motivate employees to take advantage of them.

Transparent Communication About Costs and Benefits

One of the key strategies in dispelling myths around premium increases and encouraging more active utilisation of insurance benefits is transparent communication. Employers should provide clear information about how insurance usage affects premiums and elucidate the collective benefits of high utilisation rates. This transparency can help alleviate fears of individual claims leading to cost penalties for the group.

The Role of Employers in Encouraging Utilisation

Employers play a critical role in ensuring their employees are not only covered by group health insurance but are also comfortable and informed about using their benefits. This responsibility includes regularly updating employees about any changes to their insurance plans, providing resources for assistance with the claims process, and actively promoting the use of preventive and wellness benefits.

Successful employer-led initiatives often include creating a culture that prioritises health and well-being. By integrating health insurance utilisation into broader health and wellness programs, employers can demonstrate their commitment to their employees' health, thereby encouraging more active engagement with insurance benefits. Examples of such initiatives include health fairs, regular wellness challenges, and partnerships with healthcare providers for on-site health screenings.

Employers can also leverage feedback from employees to continually improve the insurance offerings and the support provided for utilisation. This ongoing dialogue ensures that the group health insurance plan remains responsive to the needs of the workforce, maximising its value for both the employees and the employer.



The underutilisation of group health insurance remains a complex puzzle, with multifaceted reasons contributing to this phenomenon. From a lack of awareness and understanding to the perceived complexity of claim processes, and from personal preferences for healthcare providers to misconceptions about premium increases, the barriers are significant but not insurmountable. Addressing these challenges requires a concerted effort from both employers and insurance providers, like, which is dedicated to simplifying healthcare access through innovative, digital-first solutions.

Strategies to enhance utilisation encompass comprehensive onboarding, simplifying the claim process, promoting wellness, and preventive care, and ensuring transparent communication about the costs and benefits of insurance usage. Employers, in particular, play a pivotal role in this endeavour. By fostering a culture that values health and well-being, providing clear and continuous education on insurance benefits, and actively encouraging the use of available services, employers can significantly impact the health outcomes of their workforce and the overall value derived from group health insurance benefits.

In essence, maximising the utilisation of group health insurance is not just about improving health outcomes; it's about creating a more informed, engaged, and healthy workforce. The benefits of such an approach extend beyond the immediate financial savings to foster a culture of well-being, loyalty, and productivity. As we move forward, the focus should remain on breaking down the barriers to utilisation, enhancing communication and support, and continuously evolving the insurance offerings to meet the changing needs of the workforce. By doing so, companies can ensure that their investment in employee health insurance is fully realised, benefiting both the organisation and its employees.

Group health insurance represents a crucial component of employee benefits, and its effective utilisation is paramount for ensuring that employees not only have access to quality healthcare but are also empowered to take charge of their health and well-being. The journey towards higher utilisation rates may be challenging, but with the right strategies and a commitment to education and support, it is undoubtedly achievable.


Q. How do cultural factors and societal norms influence employees' willingness to utilize group health insurance benefits?

A. Cultural views shape health insurance use in India. Traditionally, many prefer family advice over formal healthcare. This mindset impacts insurance engagement. Employers can bridge this gap. They should communicate benefits clearly and culturally. Trust builds through familiar channels, enhancing utilization.

Q. What specific challenges do smaller companies face in providing and promoting the use of group health insurance compared to larger corporations?

A. Small businesses struggle with insurance costs and options. They have less negotiating power with providers. This results in fewer benefits for employees. Solutions include group alliances for better terms. Education on benefits helps too. Small efforts make big differences in employee wellness.

Q. How does the quality and accessibility of healthcare services within the insurance network impact employees' utilisation rates?

A. Quality and access drive insurance use. If network hospitals are limited or far, employees hesitate. They prefer known, quality care, even if out-of-pocket. Insurers should expand networks and include reputable clinics. Transparency about hospital ratings helps. Informed choices boost confidence and usage.