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Who is Eligible for Group Health Insurance?

Team AckoJul 22, 2021

Providing Group Health Insurance for employees is an excellent opportunity for employers and non-employers to provide access to private medical care when medical costs are on the rise. Whether it is a small business, startup, welfare association or a group with a common interest, the security of a group insurance scheme helps in boosting the morale of employees and the brand of your organization. But, are you and your business/group eligible for Group Health Insurance Plan? Read ahead to learn more about the eligibility criteria for a Group Mediclaim Policy (GMC).

Group Health Insurance Eligibility

Eligibility Criteria for Group Health Insurance

Whether you are an emerging startup, organizations small and large, social/cultural association or a group with a common interest, you are eligible to apply for a Group Health Insurance Plan. Organizations or groups with more than 20 employees can opt for a group health cover. However, the insurance industry regulator, the IRDAI has stated that micro-insurance plans can be availed by groups of less than 5 employees/members.

Here are some of the guidelines that you must consider before buying a group health insurance scheme:

Definition of a Group

The Insurance Regulatory and Development Authority of India (IRDAI) defines “group” as an employer-employee group or non-employer-employee group. A non-employer-employee group can be a group with a common interest. For example, a group of credit card holders, members of the same cultural or social association, savings bank account holders of a bank, among other such groups are eligible to apply for a group health insurance plan.

Minimum Number of Employees

The minimum number of employees or members of the group should be 20 to be eligible to buy a group insurance policy. However, you can include dependent family members of the employees to achieve the minimum number of persons of 20. Also, the criteria for the minimum number of employees or members might differ between different insurance companies. Check with the insurer about the criteria to qualify for the plan.

The Intention of Buying Group Health Insurance

To buy low-cost health insurance coverage, you cannot form a group. IRDAI states that if a person is negotiating the price with the insurer before forming a group, it will be considered as a non-legitimate group. Ideally, a group of members with a common interest or a group of individuals coming together to engage in an economic activity like employees of a company are eligible to opt for a group health cover.

Who is Not Eligible for Group Health Insurance?

Like all insurance plans, the Group Mediclaim Coverage (GMC) also comes with certain limitations. The following offers an insight into who is not eligible for the group health scheme:

Sole Entrepreneur

A sole entrepreneur with no employees is not eligible for the group cover. Instead, a self-employed small business owner with no employees can buy an individual health insurance plan to protect against planned and/or unplanned hospitalization.

Family Business

As a family business looking for a group health insurance plan, the spouse is not considered as an employee and hence, does not qualify for a group cover. But, if there are other employees (members and non-members of the family) of the family business, then the spouse can be covered under the plan.

Eligible Dependents

Eligible dependents can be part of the group health insurance scheme, and as an employer or non-employer, you have the option to contribute to the cost of covering dependents or give the option to employees to include dependents at an extra premium.

Finding Affordable Group Health Insurance Plan

While it is important to buy a low-cost group health insurance plan, it is important to know about other services such as customer care, the process of raising claims and wider coverage the insurer can offer. Here are a few practical tips to find an affordable employee health insurance plan for your company:

Compare Various Plans

Make it a priority to compare various plans available in the market. Ensure you understand the features, the type of services and the cost of the plan carefully before you apply for the plan. You can compare the group health insurance plans online for ease of comparing several plans.

Opt for a Digital Insurance Provider

Consider buying the plan from a digital insurance provider such as ACKO for a hassle-free experience. Since most of the operation is digitized, the savings are passed on as a low-cost group health insurance plan. Apart from being low-priced insurance plans, ACKO strives to provide a seamless and paperless experience, making complicated processes such as filing a claim easier and faster.

Conclusion

A Group Health Insurance Plan is designed to offer health insurance to employees by employers or to members by an association or to a group with a common interest. The Insurance Regulatory and Development Authority of India (IRDAI), which is the regulator of the insurance industry, states that there should be at least a minimum of 20 employees or members to form a group. 

However, the group health insurance eligibility is not restricted only to groups of 20 persons. Insurers can issue micro-insurance for groups of less than 5 persons. Whether you are an emerging startup, small business or a group of members with a common interest and organizations big and small are eligible for group health insurance.

Frequently Asked Questions

Here are a few important frequently asked questions about the Group Health Insurance Plan:

FAQs

How does a company or an organization qualify for Group Health Insurance Plan?

The regulatory authority of the insurance sector, the IRDAI, defines groups as employer-employee or non-employer-employee groups. The latter can be a group of individuals of the same welfare associations, professional societies, borrowers of a bank and customers of a specific business where insurance is offered as an additional benefit. These defined groups are eligible to apply for the Group Medical Coverage (GMC).

What is the eligibility criteria for an employee to avail of the Group Health Insurance Policy?

In both the employer-employee and non-employer groups, the respective employer or associations/societies may define the type of employees who are eligible for the health insurance plan. Typically, the employer or the association decides the eligibility criteria for health insurance coverage for their employees.

Which type of group is not eligible for the group health scheme?

The IRDAI states that a person negotiating “group” prices for the health insurance plan and then finding members to insure is not considered as a legitimate group.

Can a husband and wife apply for a group health scheme?

Most employers allow employees to avail health insurance coverage for their dependent family members. In the case of a business run by both the husband and wife, they may be eligible for group health insurance coverage if they meet are the parameters set by the insurer. However, in the case of a sole proprietor, the spouse and the sole proprietor do not qualify as a group, hence, cannot opt for the group scheme.

How many employees are required to get a Group Health Insurance Policy?

Typically, startups, non-employer groups with more than 20 employees or organizations small and large can opt for the group health insurance scheme. That being said, the IRDAI has stated that micro-insurance policies can be issued to less than 5 member groups. Each insurer has its respective criteria for the eligibility of the GMC. Ensure that you check the eligibility criteria to qualify for the Group Health Insurance Policy.

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