What is parental leave and is it linked to health insurance in India?

Parental leave is paid time off given to new parents around the birth or adoption of a child. It is governed by labour law and employer policy, not by insurance. Health insurance is a separate benefit that covers medical costs associated with delivery, newborn care, and complications of pregnancy. The two connect around childbirth: leave provides paid time off, and insurance covers hospital costs, but they are administered under different frameworks.

What does parental leave cover in India?

Parental leave in India covers three distinct categories:

• Maternity leave: 26 weeks of paid leave for the birth of the first two children (12 weeks for the third and beyond), for employees at establishments with 10 or more employees. Governed by the Maternity Benefit Act, 1961 (consolidated into the Code on Social Security, 2020 effective 21 November 2025).
• Paternity leave: No statutory requirement in the private sector, though many employers offer 5 days to 12 weeks as company policy. Central government employees receive 15 days of paid paternity leave.
• Adoption leave: 12 weeks of paid leave under the Maternity Benefit Act for adoption of a child below three months of age.

Surrogacy and commissioning parent leave are also covered under the Maternity Benefit Act, at 12 weeks for a commissioning mother.

How does parental leave relate to health insurance?

Parental leave is paid time off; health insurance is a separate policy that covers medical costs during and around delivery. The connection is timing: an employee on maternity leave typically claims delivery and newborn expenses under the group health policy during the same period. The two benefits do not offset or reduce each other, and both are drawn from separately.

Does health insurance continue during parental leave?

Yes. An employee on paid parental leave remains covered under the employer's group health policy. Since leave is paid, the employee retains employment status, and cover continues without interruption. Unpaid or extended leave beyond statutory entitlements may require the employer to specifically confirm continued cover with the insurer.

What are the statutory paid maternity benefits?

Under the Code on Social Security, 2020, employees eligible for maternity benefit are entitled to:

• 26 weeks of paid maternity leave (12 weeks for the third and subsequent children).
• A medical bonus of Rs 3,500 if no pre-natal or post-natal medical care is provided free by the employer.
• Creche facilities at establishments with 50 or more employees.
• Nursing breaks until the child is 15 months old.
• Protection from dismissal during pregnancy or maternity leave.

How do private employer policies typically extend beyond the statutory minimum?

Large private employers and GCCs typically offer parental leave beyond the statutory minimum:

• Extended maternity leave: 26 to 30 weeks paid, sometimes with an option for additional unpaid leave.
• Meaningful paternity leave: 4 to 12 weeks paid, well above the statutory silence in the private sector.
• Adoption and surrogacy leave: Extended and gender-neutral coverage.
• Return-to-work support: Phased return, work-from-home options, and lactation rooms.

Does the group health insurance policy influence parental leave design?

Not directly. The two benefits are administered separately: HR designs and pays leave, while the insurer underwrites the health policy. However, employers reviewing parental benefits often consider both together as part of a family-building support package. Group health policies with Day 1 maternity waivers align well with generous parental leave policies, since employees can plan family expansion around continuous employment without waiting for cover to kick in.

How Plum approaches this

Plum focuses on the health insurance side of the parental benefit picture, structuring maternity cover with Day 1 waivers, newborn baby cover, and reasonable delivery sub-limits so the insurance side supports whatever parental leave policy the employer has designed. Across Plum's group book, claims NPS runs at 79 and cashless pre-authorisation on delivery claims clears in a median of 45 minutes. Plum places group cover from a minimum of 7 employees, working with partner insurers including ICICI Lombard, HDFC ERGO, Bajaj Allianz, Star Health, Niva Bupa, and Aditya Birla Health Insurance, and coordinates with the employer's HR team on the interaction between parental leave and health cover.

Frequently asked questions

Is paternity leave mandatory in India?

Not in the private sector under central law. Central government employees receive 15 days of paid paternity leave. Private employers set their own paternity leave policy.

Do employees receive full salary during maternity leave?

Yes, under the Maternity Benefit Act (now under the Code on Social Security, 2020), the employer pays the employee's average daily wage during the leave.

Does the group health policy pay for newborn care?

Yes. Most group policies include newborn baby cover from Day 1 for a stated period, covering congenital conditions and early-stage complications.

Can maternity leave be extended beyond 26 weeks?

The statutory minimum is 26 weeks paid; many employers offer additional paid or unpaid leave, up to a total of 12 to 18 months in some cases.

Does adoption leave apply to older children?

Under the Maternity Benefit Act, the 12-week adoption leave applies to adoption of a child under three months of age. Employer policies may extend leave for older adopted children.

Is the medical bonus of Rs 3,500 still applicable?

Yes, where the employer does not provide free pre-natal or post-natal medical care, the medical bonus of Rs 3,500 continues under the Code on Social Security, 2020.