Group Health Insurance FAQ

AUTHOR

Asawari Ghatage

DATE

August 6, 2026

Fundamentals

What is group health insurance?

Group health insurance is a single policy that covers a defined group, usually a company's employees and their dependants. The employer purchases it from an IRDAI-licensed insurer and pays the premium. Every eligible member receives cover without individual medical underwriting. The policy pays for hospitalisation, day-care procedures, and pre- and post-hospitalisation expenses.

How does group health insurance work?

The employer selects an insurer, defines the sum insured and coverage terms, and pays a single premium for all eligible employees. Employees and their listed dependants access cashless treatment at network hospitals or file reimbursement claims. Plum's median pre-authorisation TAT is 45 minutes for cashless claims routed through partner insurers.

How does group health insurance work in India?

In India, group health insurance is regulated by the IRDAI. An employer buys a master policy covering all employees, with claims handled through a Third Party Administrator (TPA) or the insurer directly. Cashless treatment happens at insurer network hospitals; reimbursement covers the rest. Plum's median pre-authorisation TAT sits at 45 minutes.

What is the difference between group health insurance and individual health insurance?

Group health insurance covers many people under one master policy purchased by an employer. It skips individual medical underwriting and usually waives waiting periods for pre-existing conditions. Individual health insurance is bought by one person or family, uses medical underwriting, applies a 30-day initial waiting period, and covers pre-existing conditions only after 2 to 4 years.

Who is eligible for group health insurance?

Any registered Indian entity with a minimum group size can buy group health insurance. IRDAI defines a group as 7 or more members, which is also Plum's threshold. Eligible members include full-time employees on the payroll and, depending on plan design, their spouse, children, and parents or parents-in-law. Contract staff and interns can be added as a separate schedule at additional premium.

What are the benefits of providing health insurance to employees?

Providing health insurance protects employees from out-of-pocket medical costs, improves retention, and qualifies the premium as a deductible business expense under Section 37(1) of the Income Tax Act. It signals baseline benefit maturity to candidates. Group cover typically waives pre-existing disease waiting periods, so employees get immediate access to treatment for existing conditions.

Terminology

What is the difference between group medical insurance and group mediclaim?

There is no functional difference. Both terms refer to the same product, a hospitalisation-focused policy an employer buys to cover employees. 'Mediclaim' is the older Indian term, originally coined by New India Assurance for its 1986 policy. 'Group medical insurance' is the newer generic name. Features, exclusions, and IRDAI regulation are identical.

Is group health insurance the same as group medical cover?

Yes. 'Group health insurance' and 'group medical cover' refer to the same product, an employer-sponsored policy that pays for employees' hospitalisation and related medical expenses. Insurers and brokers use both terms interchangeably. What matters is the policy wording, sum insured, network, and inclusions rather than the label.

What is the difference between a group health insurance plan and a group health insurance scheme?

Both terms refer to the same arrangement. 'Plan' is common in insurer marketing; 'scheme' appears in older policy documents and government contexts like ESIC. Neither has a distinct regulatory meaning under IRDAI. When comparing options, focus on the master policy wording, sum insured, sub-limits, and network hospital list.

What is corporate health insurance?

Corporate health insurance is group health insurance purchased by a company for its employees and, optionally, their dependants. The employer holds the master policy and pays the premium. Coverage typically includes hospitalisation, day-care procedures, pre- and post-hospitalisation, and maternity. Plum requires a minimum group size of 7 employees to issue a corporate policy.

How is corporate health insurance different from group health insurance?

Corporate health insurance is a type of group health insurance, specifically the version sold to registered companies for employees. Group health insurance is the broader IRDAI category that also covers non-employer groups, such as bank customers, credit-card holders, or association members. For employers, the two terms mean the same thing in practice.

Coverage and benefits

What does a group health insurance policy typically cover?

A typical policy covers in-patient hospitalisation, pre-hospitalisation expenses for 30 days, post-hospitalisation for 60 days, day-care procedures, ambulance charges, ICU costs, and specified modern treatments. Most employer policies also include maternity cover, newborn cover, and pre-existing disease cover from day one. Optional add-ons include OPD, dental, and vision.

What is included in a typical group health insurance plan?

Standard inclusions are room rent, doctor and surgeon fees, nursing charges, ICU, diagnostics linked to hospitalisation, prescribed medicines during admission, and day-care procedures. Employer plans usually add maternity, newborn cover, and pre-existing disease cover from day one. Ambulance charges, mental health treatment as per the Mental Healthcare Act 2017, and modern treatments are also covered.

Are pre-existing diseases covered under group health insurance?

Yes. Most employer group health insurance policies cover pre-existing diseases from day one, with no waiting period, because the risk is spread across the group and individual medical underwriting is skipped. This is a key advantage over individual health insurance, which imposes a 2 to 4 year waiting period on pre-existing conditions.

What is the waiting period for group health insurance?

Employer group policies typically waive the standard 30-day initial waiting period, the 2 to 4 year pre-existing disease waiting period, and specific disease waiting periods (usually 2 years for conditions like cataract or hernia). Maternity is covered from day one in most corporate policies. Actual waiting periods vary by insurer and policy wording, so check the schedule of benefits.

What is the typical sum insured in a group mediclaim policy?

The typical sum insured in India ranges from ₹2 lakh to ₹10 lakh per employee. Mid-sized companies often sit at ₹3 to 5 lakh; large enterprises at ₹5 to 10 lakh or higher. Some policies use a floater basis where the sum insured is shared across the employee and dependants; others use per-member limits.

What riders can be added to a group health insurance policy?

Common riders include maternity cover (if not built in), OPD cover, dental and vision, critical illness, personal accident, top-up sum insured, corporate buffer, and specific disease cover. Riders extend the base policy at additional premium. Not every insurer offers every rider, so options depend on the base insurer's product menu.

What is the room rent limit in group health insurance?

Room rent limits vary by policy. Many corporate plans cap room rent at 1% or 2% of the sum insured per day for standard rooms, and 2% for ICU. Some newer plans offer 'no room rent capping' or a 'single private AC room' category. Exceeding the limit triggers proportionate deduction on other hospital charges.

Does group health insurance cover maternity?

Yes, most employer group health policies cover normal and caesarean delivery, usually with a sub-limit of ₹50,000 to ₹1,00,000, though some corporate plans offer higher limits or no cap. Employer group policies typically waive the 9-month to 4-year maternity waiting period that applies to individual policies. Newborn cover from day one is standard.

Does group health insurance cover dental and vision?

Standard group health insurance does not cover routine dental or vision, since these are outpatient expenses. Dental treatment is covered only when it follows an accident or requires hospitalisation. Employers can add dental and vision through an OPD rider or a separate outpatient benefit, which is common in flexible benefits or MNC-style plans.

What are the exclusions in a group mediclaim policy?

Standard exclusions include cosmetic surgery, dental and vision (unless from an accident), fertility treatment (unless the plan adds it), self-inflicted injury, injuries from war or nuclear risks, and treatment for substance abuse. Non-medical items like admission kits and administrative charges are excluded per IRDAI's standardised list of 199 non-payable items.

Family and eligibility mechanics

Can family members be covered under a group insurance policy?

Yes. Employer group policies typically allow the employee to add spouse, dependent children (usually up to age 25), and dependent parents or parents-in-law. Some employers pay the full premium for dependants, others share it, and some allow employees to add parents on a voluntary contribution basis. Adding family raises the group premium.

Can employees add their family to the employer's group insurance?

Yes, if the master policy allows dependant cover. The employer defines who counts as a dependant, usually spouse, children, and parents or parents-in-law. Additions happen at policy inception, at renewal, or on qualifying life events such as marriage or childbirth. Voluntary parental cover is often self-funded by the employee at a subsidised group rate.

Are domestic helps and contract workers covered under group health insurance in India?

Not by default. Group health insurance covers only the employees listed on the master policy, which usually means people on the company payroll. Contract workers, consultants, and interns can be added as a separate schedule if the employer chooses to and pays the additional premium. Domestic helps are not covered under an employer's group policy.

What happens to employee health insurance when an employee leaves?

Group cover ends on the employee's last working day, unless the employer extends it as part of the exit terms. The employee can convert the group policy to an individual retail policy from the same insurer within 30 to 45 days under IRDAI portability rules, subject to insurer approval. Waiting periods served under the group policy are usually credited.

Buying and procurement

How do I choose a group health insurance plan?

Start with headcount, budget per employee, and desired sum insured. Compare insurers on claim settlement ratio, cashless network breadth, pre-authorisation TAT, and sub-limits (room rent, maternity, ambulance). Then check policy wording for pre-existing disease cover, day-one maternity, and portability. Working with a broker like Plum simplifies comparison and negotiation.

What are the different types of group health insurance policies?

Common types are employer-employee policies (the standard corporate plan), group personal accident, group term life, and non-employer group policies (bank-customer, association, credit-card). Within employer-employee, sub-types include base group mediclaim, top-up or super top-up plans, voluntary parental cover, and OPD-inclusive plans. IRDAI regulates all of these under the group insurance category.

How can I buy group health insurance online?

Contact a licensed digital broker such as Plum or an insurer's corporate desk, submit employee count, age band, and desired sum insured, and receive quotes. Compare terms, sign the proposal digitally, and pay the premium online. Policy issuance and employee onboarding happen through the broker's platform. Plum issues policies for groups of 7 or more.

How are group health insurance quotes calculated?

Insurers price group premiums using headcount, age distribution, sum insured, dependant structure (self, family floater), sector risk, city tier, and prior claims experience. Plans with maternity, day-one pre-existing disease cover, and higher room rent limits carry higher premiums. Broker negotiation and multi-insurer bidding can bring the final rate down.

What information do I need to get a group insurance quote?

Insurers need employee count, age distribution by band, dependant structure (self, spouse, children, parents), city of employees, sum insured requirement, and any specific coverage needs like maternity or day-one pre-existing disease cover. Prior claims data is required at renewal. Company registration details are collected at proposal stage.

Who are the top group health insurance providers in India?

Leading corporate health insurers in India include ICICI Lombard, HDFC ERGO, Bajaj Allianz, Star Health, Niva Bupa, Aditya Birla Health Insurance, and Care Health. Public sector options include New India Assurance and National Insurance. Ranking varies by claim settlement ratio, network size, and product design. Plum places policies across all major insurers.

How long does it take to buy group health insurance?

End-to-end, buying group health insurance takes 3 to 10 working days. Quote turnaround is 24 to 48 hours once employee data is submitted. Proposal signing, premium payment, and policy issuance take another 3 to 5 working days. Plum onboards new companies faster when data is provided in the standard employee schedule format.

What is the minimum number of employees required to buy group insurance?

IRDAI defines a group as 7 or more members for group health insurance. Some insurers accept 5, and a few offer micro-group plans starting at 3. Plum's minimum is 7 employees. Smaller teams can consider group personal accident, individual retail health insurance, or wait until the headcount reaches the group threshold.

Can I buy group health insurance for a 5-employee company?

A 5-employee company falls below the standard IRDAI group threshold of 7. A few insurers offer micro-group products for 3 to 6 lives, but options are limited and pricing is less competitive. Plum's minimum is 7 employees. Smaller teams typically use individual retail health insurance until they cross the group threshold.

How do I compare group health insurance providers?

Compare insurers on incurred claim ratio (published by IRDAI annually), claim settlement ratio, network hospital count in your operating cities, pre-authorisation TAT, sub-limits, and policy wording exclusions. Also check TPA versus in-house claims handling, and the insurer's grievance record. Plum's median pre-authorisation TAT is 45 minutes across partner insurers.

What documents are required to purchase group health insurance?

Documents include the company's incorporation certificate, GST registration, PAN, address proof, and a signed proposal form. For the employee schedule, insurers need name, date of birth, gender, relationship (self, spouse, child, parent), and sum insured category. Bank details are needed for premium payment. Existing policy documents are required at renewal.

Is online purchase of group insurance reliable?

Yes, when purchased through an IRDAI-licensed corporate broker or insurer. IRDAI's Insurance Broker Regulations 2018 mandate the same due-diligence standards for online and offline placement. Policy issuance, claims handling, and grievance rights are identical. Plum is an IRDAI-licensed broker and issues policies through partner insurers with full digital documentation.

How do I procure a corporate health insurance policy in India?

Define headcount, sum insured, and coverage requirements. Approach 2 to 3 IRDAI-licensed brokers or insurer corporate desks for quotes. Compare proposals on premium, network, claim settlement ratio, and policy wording. Sign the proposal, pay premium, and receive the master policy. Employee onboarding follows via the broker or insurer's HR portal.

Should I work with a broker or buy corporate insurance directly from the insurer?

A broker represents you, not the insurer, and can compare quotes across multiple insurers, negotiate terms, and support claims. Direct purchase from an insurer limits comparison to that insurer's products. Broker services are typically free to the employer, since IRDAI regulates commission structures. For most companies, a broker adds value.

Compliance and regulation

Is health insurance mandatory for employees in India?

Health insurance is mandatory in two situations. Workers earning up to ₹21,000 per month must be covered under ESIC. The April 2020 MHA order requiring group health cover during COVID lockdown resumption was revoked on 23 March 2022. For employees above the ESIC threshold, group health insurance is not legally required but is standard practice.

Is it compulsory for companies to provide health insurance in India?

Not universally. Companies employing workers earning up to ₹21,000 per month must enrol them under ESIC. The Code on Social Security 2020, effective 21 November 2025, retains ESIC as the statutory scheme. For higher-earning employees, health insurance is not compulsory, but market expectation across the organised sector treats it as a baseline.

What is the post-COVID rule on employee health insurance in India?

The Ministry of Home Affairs order dated 15 April 2020 (Order No. 40-3/2020-DM-I(A)) required employers resuming workplace operations to provide medical insurance to workers. That order was withdrawn on 23 March 2022 when the NDMA revoked Disaster Management Act provisions. The parallel IRDAI circular of 16 April 2020 remains in force.

What is IRDAI's role in regulating group health insurance in India?

The Insurance Regulatory and Development Authority of India (IRDAI) licenses insurers and brokers, approves product wordings, sets minimum sum insured and coverage standards, publishes annual claim settlement data, and handles grievance escalations. Group health insurance falls under IRDAI's Group Insurance Guidelines and product filing regulations. All employer policies are IRDAI-approved.

ESI and ESIC comparison

What is the difference between ESI and group health insurance?

ESI (Employees' State Insurance) is a statutory contributory scheme run by ESIC under the Code on Social Security 2020, covering workers earning up to ₹21,000 per month. It provides medical, disability, and maternity benefits at ESIC-empanelled facilities. Group health insurance is a voluntary employer-bought policy with a private insurer, wider network, and higher sum insured.

Can a company offer both ESI and group health insurance?

Yes. ESI is statutory for eligible employees (earning up to ₹21,000 per month) and cannot be replaced. Group health insurance can be offered on top, either to the same employees for wider access or to those above the ESI wage threshold. Many Indian companies with mixed-salary workforces run both in parallel.

How does group health insurance compare to ESIC in India?

ESIC provides statutory cover to workers earning up to ₹21,000 per month through government-empanelled hospitals, funded by 3.25% employer and 0.75% employee contribution. Group health insurance is voluntary, offers a private-hospital network, higher sum insured, cashless treatment, and faster claim processing. Plum's median pre-authorisation TAT is 45 minutes.

Cost and premium

How much does employee health insurance cost per employee in India?

Group health insurance costs around ₹5,000 to ₹15,000 per employee per year for a ₹5 lakh sum insured, depending on age profile, dependant coverage, and add-ons like maternity or OPD. Younger workforces and self-only cover fall at the lower end. Family floater plans with parents cost more.

What is the average cost of group health insurance per employee in India?

The average premium is ₹7,000 to ₹12,000 per employee per year for a ₹5 lakh floater covering employee, spouse, and up to 2 children. Adding parents raises the premium to ₹15,000 to ₹25,000 per employee. Rates vary by insurer, group age profile, location, and prior claims experience.

How is the premium calculated for a corporate health insurance plan?

Insurers calculate premium using group size, age band distribution, dependant structure, sum insured, city tier, industry risk, coverage add-ons (maternity, OPD, day-one pre-existing disease cover), and prior claims experience at renewal. First-year quotes are underwritten on group demographics; subsequent renewals factor in the loss ratio.

How much does group insurance cost for a 10-person startup?

A 10-employee startup with self-only cover at ₹3 lakh sum insured typically pays ₹50,000 to ₹1,20,000 per year in total premium. Adding spouse and children raises it to ₹1,50,000 to ₹3,00,000. Age profile and city drive most of the variation. Plum's minimum group size is 7 employees.

Is group health insurance affordable for small businesses?

Yes. For a 10-person company with self-only cover at ₹3 lakh sum insured, premiums start around ₹5,000 to ₹8,000 per employee per year, which is roughly ₹400 to ₹700 per month. Group rates are lower than equivalent individual retail policies. Plum offers group cover starting at 7 employees.

Who pays the premium in employer-provided health insurance?

The employer pays the premium for the employee's base cover. Dependant premium may be fully employer-paid, employee-paid, or shared, depending on the company's benefit design. Voluntary parental cover is usually employee-funded at the subsidised group rate. Under IRDAI rules, only the master policyholder (the employer) is billed by the insurer.

Tax treatment

Is employee health insurance taxable as a perquisite in India?

No. Under Section 17(2) of the Income Tax Act, group medical insurance premium paid by an employer for its employees is specifically excluded from the definition of a taxable perquisite. Employees do not pay income tax on the benefit. The exclusion applies to hospitalisation cover, not to standalone reimbursement of medical expenses.

Is GST applicable on group health insurance premiums in India?

Yes. Group health insurance premiums attract 18% GST as of 2026. This is unchanged despite the September 2025 exemption on individual and family floater health insurance, which the 56th GST Council reduced to 0% effective 22 September 2025. Employers can claim Input Tax Credit on group premiums where legally mandated coverage applies.

Can an employer claim tax deduction on group health insurance premiums in India?

Yes. Group health insurance premium is a deductible business expense under Section 37(1) of the Income Tax Act, since it is incurred wholly and exclusively for business purposes. It is not claimed under Section 80D, which applies only to individuals. The deduction reduces the company's taxable profit for that financial year.

Can employees claim Section 80D deduction on employer-paid health insurance?

No. Section 80D of the Income Tax Act allows deduction only for premium paid by the individual taxpayer from taxable income. If the employer pays the premium, the employee has made no payment and cannot claim 80D. Employees can claim 80D only on premium they personally pay, such as for parents or a top-up policy.

Corporate health insurance specifics

What should a CFO consider when buying corporate health insurance?

Key factors are premium cost per employee, sum insured adequacy for the workforce, claim settlement ratio, cashless network reach in operating cities, pre-authorisation TAT, and policy wording (sub-limits, exclusions, day-one pre-existing disease cover). Also consider Input Tax Credit eligibility, renewal risk if the loss ratio spikes, and broker service quality.

What is a typical corporate mediclaim policy structure?

A typical structure includes a floater sum insured of ₹3 to 5 lakh per family, cover for employee plus spouse and up to 2 children, optional parental cover, day-one pre-existing disease and maternity, and a defined room rent limit. Cashless treatment runs through insurer-empanelled hospitals; reimbursement covers the rest.

What is a claim settlement ratio and why does it matter when buying corporate insurance?

Claim settlement ratio is the percentage of claims an insurer settles out of the total claims received in a financial year. IRDAI publishes it annually. A higher ratio, typically above 90%, indicates reliable payout behaviour. For corporate insurance, it signals how likely employees are to receive claim reimbursement without dispute.

Can a corporate insurance policy be customized?

Yes. Employers can customise sum insured tiers, dependant coverage, sub-limits (room rent, maternity, ambulance), waiting period waivers, and add-ons (OPD, dental, wellness). Custom flexibility depends on the insurer's product menu and group size. Larger groups get more customisation. IRDAI approves the final product wording before policy issuance.

What is the renewal process for corporate health insurance?

Renewal starts 60 to 90 days before policy expiry. The employer shares updated employee data and prior year claims experience with the broker. The insurer quotes revised premium based on the loss ratio (claims paid divided by premium collected). Employers can negotiate, add or drop coverage, or switch insurers with portability of served waiting periods.

Best and top recommendations

What is the best group health insurance policy in India in 2026?

There is no single 'best' policy. The right choice depends on headcount, age profile, sum insured requirement, dependant coverage, and location. Insurers with strong 2026 offerings include ICICI Lombard, HDFC ERGO, Bajaj Allianz, Star Health, and Niva Bupa. A licensed broker like Plum compares all of these against your specific requirements.

What are the top 5 group health insurance plans for Indian companies?

Frequently placed 2026 options include ICICI Lombard's Group Health Shield, HDFC ERGO's Group Medisurance, Bajaj Allianz's Group Health Guard, Star Health's Group Health Insurance, and Niva Bupa's Group Health Plus. Rankings shift based on group size, sector, and location. Compare on claim settlement ratio, network, and sub-limits before selecting.

Which insurer has the best claim settlement ratio for group insurance in India?

IRDAI publishes claim settlement ratio in its annual report. In recent years, HDFC ERGO, ICICI Lombard, Bajaj Allianz, Aditya Birla Health Insurance, and Niva Bupa have each reported ratios above 95% for health insurance. Group insurance ratios are typically higher than retail because employer claims involve less individual underwriting dispute.

What is the best corporate health insurance for a 50-person company?

For 50 employees, most major insurers compete on price and terms. Best-fit selection depends on age profile, dependant coverage, and sub-limit preferences. Companies of this size often get better rates by working with a broker who can negotiate across ICICI Lombard, HDFC ERGO, Bajaj Allianz, Star Health, and Niva Bupa.

What is the best employee health insurance plan for a startup?

For a startup with 7 to 50 employees, look for a plan with day-one pre-existing disease cover, day-one maternity, no room rent capping, and a strong cashless network in your city. Plum's minimum group size is 7 employees, and its median pre-authorisation TAT is 45 minutes. Match sum insured to team salary bands.

How do I evaluate which group insurance is best for my business?

Score options on premium per employee, sum insured, claim settlement ratio, network hospital coverage in your operating cities, sub-limits (room rent, maternity, ambulance), day-one pre-existing disease cover, and grievance record. Weight the criteria by workforce demographics. Ask the broker for peer-benchmark data. Plum's claims NPS is 79, which measures employee satisfaction with the claim experience.

Startup and small business

What is the best group health insurance for startups in India?

The best plan for a startup covers pre-existing diseases from day one, includes maternity from day one, offers a cashless network in your operating city, and starts at a manageable sum insured of ₹3 to 5 lakh. Plum specialises in startup group health cover with a minimum group size of 7 employees.

What is the minimum team size to buy group health insurance for a startup?

The minimum team size is typically 7 employees, in line with IRDAI's group definition. Some insurers accept 5, and a few offer micro-group plans from 3 lives at higher rates. Plum's threshold is 7 employees. Startups below this can start with individual retail policies until they scale.

Can a 2-person company get group health insurance in India?

Not typically. A 2-person company falls below the IRDAI group threshold of 7 members. A few insurers offer micro-group plans starting at 3 lives, but 2-person groups are rarely accepted. Founders and their first hire usually use individual retail health insurance until the team reaches the minimum group size.

What is the best group health insurance for small businesses in India?

For small businesses of 7 to 50 employees, the best plan has day-one pre-existing disease cover, a ₹3 to 5 lakh sum insured, a broad cashless network, and no burdensome sub-limits. Working with a broker like Plum, whose minimum group size is 7 employees, gives access to competitive rates across major insurers.

What insurance does a startup founder need beyond group health?

Beyond group health insurance, founders typically need group term life insurance (financial protection for employees' families), group personal accident cover (disability and accidental death), and Directors and Officers (D&O) liability insurance for the founding team. Depending on the business, cyber liability, professional indemnity, and commercial property insurance may also apply.

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