Starting a business is exciting and adventurous for new business owners. However, as recruitment starts and people start joining the organisation, the employer immediately becomes responsible for their employees’ well-being. 

Since employees are the building blocks for any growing business, purchasing a group health insurance policy for employees is crucial. 

But how many employees does an organisation need to become eligible for buying group health insurance? In this article, all the necessary parameters for purchasing group insurance are explained to help business owners make informed decisions. 

What is the Minimum Employee Requirement to Get Group Health Insurance?

Before you buy business insurance online, you must understand the eligibility criteria, features and benefits.

According to IRDAI, the minimum number of employees required to buy a group health insurance policy for an organisation is 20. Moreover, smaller groups and businesses with fewer than 5 members can also invest in micro-insurance plans.  

This way, even small organisations can take the initiative to protect their employees and fulfil their legal obligations towards the employee protection rules set by IRDAI. 

Moreover, there is a reason why this threshold of employee numbers exists, such as:

  • For risk pooling, insurance companies require a concrete number of employees to assess their risk profile and calculate the premium amount. 
  • Insurance companies also need to consider the number of employees under administrative feasibility. It is not feasible to have one or two employees or a large number of employees who become unmanageable. 

Parameters for Employee Group Health Insurance

Sum Insured

The sum insured is the amount allocated to insured employees to cover their medical expenses in the event of an emergency. It should be ensured that the sum insured amount provided to employees is adequate to cover their necessary expenses, especially in light of rising inflation and uncertain medical situations. 

Network Hospitals

Another key factor to consider when employers buy business insurance online for employee health coverage is checking the network of hospitals. A vast network of hospitals helps facilitate smooth claim settlement and expedite medical assistance, especially during emergencies. 

Premium 

Affordable premiums are a key aspect of a group health insurance policy; however, it is always wise to compare premiums from multiple insurers. 

Comparison helps businesses evaluate the benefits provided by insurers and select the best-suited for their employees’ requirements. 

 Claim Procedure

Another important parameter to consider for a group health insurance policy is its claim procedure. This includes how cashless and reimbursement claims are handled, the document requirements, and the support provided. 

Employers should choose an insurer that has a clear and easy claim procedure, such as TATA AIG. Not only is their claim procedure straightforward they also have a dedicated team of claim experts for support. 

Add-on Covers

When you compare or buy business insurance online for employees, it is essential to check for add-on coverage. Having the option of add-on cover provides customisation and added protection to the employees according to their medical coverage requirements. 

Why Should Employers Offer Group Health Insurance?

Here is why employers should provide a group health insurance policy regardless of the number of employees they have. 

Employee Retention

When employers buy business insurance online for their employees’ health protection, it creates a sense of loyalty among employees. Thus, it makes employee retention easier as they work for the organisation with more dedication and a sense of responsibility. 

Improved Employee Productivity

Providing a group health insurance policy to employees helps improve their productivity. As employees feel safe and valued, they give their best efforts in uplifting the company. This, in turn, helps increase the company’s operational efficiency and profitability. 

Fulfil Legal Obligations

Another reason employers may purchase a group health insurance policy is to fulfil their legal obligations. Employers are required to provide health insurance protection for their employees under the regulations of the IRDAI. 

Tax Benefits

Buying a group health insurance policy for employees is financially beneficial for employers, as they can claim tax benefits on their premium contributions towards employee health insurance as business expenses, under Section 37(1) of the Income Tax Act. 

Public Reputation

When employers buy business insurance online, such as health protection for their employees, they establish a positive brand image. This helps build goodwill for the business, attracting new talent, investors, and a favourable public perception. 

Summing Up

A group health insurance policy is essential for any business organisation, not only from a legal perspective but also for its financial stability. Although the number of employees is an important factor to consider when buying a group health insurance policy, it should not be the only factor to consider. Businesses must mandatorily insure their employees for medical emergencies.