Employer Employee Insurance
Financial Assistance to Employees During Emergency
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Employer-employee Insurance or Group Health Insurance can provide timely financial assistance to employees during health emergencies. It can also help retain the talent pool in a business establishment and generate goodwill for the brand. People-first organisations must insure their workforce with such a cover, as it offers numerous benefits for both the employers and the employees. Read ahead to know more about this scheme.
What is an employer-employee insurance scheme?
An Employer-employee Scheme is a type of health cover that employers buy for their employees. Such a policy serves as a valuable employee benefit by providing financial security in case of medical emergencies. This initiative can enable companies to not only retain existing employees but attract new talent for business growth.
An Employer-employee Insurance Policy can financially protect not just your team but also their covered family members. Depending on the policy, the coverage can include accident-related injuries, medical emergencies, hospitalisation costs, and other covered expenses. In a nutshell, Employer-employee Insurance is a way of offering health-related financial cushioning for your team.
How does an Employer-employee Insurance scheme work?
Employer-employee Insurance scheme works as a comprehensive health cover for every covered member of an organisation sponsored by the employer. Employers can purchase a Group Medical Cover (GMC) or Group Personal Accident (GPA) Cover for their workforce. The GPA policy can also be a Group Health Insurance add-on.
Typically, the employer pays the premium for every covered employee under the policy. The objective of an Employer-employee Insurance Policy is to offer financial help to your team members in case of medical issues. Thus, it works as an employee benefit offered by the company.
What's Covered
| Type of group insurance policy | What it covers |
|---|---|
| Group Medical Cover (GMC) | A Group Medical Cover serves as a master health/medical insurance policy for all members of a business establishment. This coverage can be extended to the family members of an employee as well. |
| Group Personal Accident (GPA) | A Group Personal Accident Cover financially protects the workforce of an organisation against accident-related injuries and death. |
Employer-employee insurance policy eligibility
Here is the key eligibility criteria for an employer-employee insurance policy. Note that different insurers might have different specific criteria.
A company, corporation, sole proprietor, partnership firms, and private and public companies are eligible to purchase policies for their employees.
An employer must have at least five salaried employees working for them.
The shareholding strength of an employee in the organisation, including all their family members, can’t be above 51%.
There must be a transactional service and a salaried relationship between the employee and employer, respectively.
Benefits of Employer-employee Insurance for employees
Here is how Employer-employee Insurance benefits employees of an organisation. The coverage can vary depending on whether it is a Group Medical Cover (GMC), Group Personal Accident (GPA) Cover, and GMC with GPA add-on.
1. Medical cover
Employees covered under the policy get insurance coverage for medical emergencies, illness, etc., as per the terms and conditions.
2. Family cover
In certain situations, the coverages under Employer-employee Insurance may extend to the family members of an employee as well. This can include dependent parents, children, and spouse based on the terms of the policy.
3. Accident cover
Employees covered under the GPA policy receive financial protection against injuries or death due to an accident. In case of accidental death, the nominated family member of the employee receives the compensation amount.
4. Tax benefits
If employees contribute towards the premium, they get tax benefits as per Section 80C of the IT Act, 1961 for the amount paid by them.
5. Cashless services
A covered employee can receive cashless services at any of the hospitals under the insurer’s hospital network. A cashless service allows the policyholder to attain healthcare at a medical facility without having to pay cash upfront as the bill (covered amount) is settled between the insurer and the hospital.
Benefits of Employer-employee Insurance for employers
Here are the benefits of Employer-employee Insurance for employers.
1. Employee relation
Employers can financially secure employees against medical uncertainties by offering insurance coverage. It can help improve the employee-employer relationship, resulting in higher workforce motivation.
2. Employee retention
A health cover can make employees feel that they are taken care of. Hence, employees are less likely to think about switching to a different company. As a result, you can reduce the attrition rate of your organisation.
3. Attracting talent
An employer can highlight Employee Health Insurance as a key benefit of working at the organisation. Many candidates look for good medical coverage along with other factors while joining a company. Hence, it can help to attract talented employees.
4. Employee productivity
Top Employee Health Insurance Policies provide preventive healthcare support. Initiatives such as fitness tracking applications, discounts on medicine, etc., may come as a part of a policy. These measures can help improve the lifestyle of your employees, making them more productive in the long run.
5. Tax exemption
An employer can attain tax exemption on the premium paid for an Employer-employee Policy. The premium can be declared as a business expense.
Tax benefits of Employer-employee Insurance scheme
Here are the details related to Employer-employee Insurance tax benefits.
Tax benefits for an employer
As per Section 17(3) of the Income Tax Act, the premium paid by an employer for employees’ health insurance comes under “Profit in lieu of Salary”. Hence, the employer can show that premium amount as a business expense to obtain tax benefits.
In simple words, annual premiums of Employer-employee Policies are general business expenses, hence deductible from the payable tax.
Tax benefits for an employee
If an employee pays any part of the premium, they can also avail of tax exemptions as per the Income Tax Act of India.
Similarly, if there are any top-up plans opted for by an employee, the paid monthly premium will also fetch tax benefits under the IT Act.
Types of arrangements in the Employee-employer Insurance scheme
There are two major kinds of arrangements under an Employee-employer Insurance scheme.
Proposed by an employer for an employee
The following are the key factors of the first kind of Employer-employee Insurance cover. Please note that these are only general factors; exact details can vary.
1. The policy is assigned to the employee (policyholder) as per the employer-employee agreement.
2. The organisation holds the right to impose restrictions and prevent an employee from misusing the policy.
3. After the expiry of the group plan, the employee can convert the group policy to an individual policy as per applicable terms and conditions.
Employees customise the policy
The following are the key factors associated with the second type of Employer-employee Insurance cover.
1. The employer proposes a basic plan to employees with the freedom to customise.
2. The employee can customise the insurance policy based on their personal requirements and preferences.
3. The employee has to pay for the additional coverage.
How to buy Employer-employee Insurance online from ACKO
We offer the option to customise Employer-employee Insurance for maximum impact. Hence, you can satisfy the insurance needs of every member of your team. Here is how you can buy Employer-employee Insurance online from ACKO.
Step 1
Click on “Schedule a Demo”, available at the top of this page.
Step 2
Choose a Demo slot.
Step 3
Follow the instructions.
Or you can also write to us at [email protected] to initiate the process.
Frequently Asked Questions
The following are frequently asked questions regarding Employer-employee Insurance policies.
Can employers choose to reimburse their employees for policy premiums?
Employers can reimburse their employees for the policy premium if the same is mentioned in the terms and conditions of the policy.
Who isn’t eligible to purchase Employer-employee Insurance?
There are two major categories of non-eligibility for Employer-employee Insurance.
A single entrepreneur who doesn’t have any full-time employees working for their venture.
A business group having only members of a single family and no non-family employees.
Is it mandatory to buy Employer-employee Insurance in India?
After the initial COVID-19 lockdown, the government (as per this notification) has made it mandatory for employers to offer medical insurance to their employees. Moreover, the companies have also become proactive in financially securing their employees against health-related problems, accidents and other emergencies.
Can part-time employees benefit from Employer-employee Insurance?
While part-time employees can request health insurance coverage from their employers, the approval depends on the company policy. However, employers are not legally obligated to provide medical/health insurance to part-time employees.
Can two-partner firms buy Employer-employee Insurance in India?
Yes, partner firms can also purchase Employer-employee Insurance, given they fulfil all other eligibility criteria.
Disclaimer: The plans, services, features, processes, and other details mentioned on this page are subject to availability and changes. Please check the applicable policy wordings before making any insurance-related decisions. Feel free to reach out to us at [email protected] for any queries.
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