Group Health Insurances: Everything You Need to Know

Group Health Insurances
Group Health Insurances

by 5paisa Research Team Last Updated: Aug 24, 2023 - 12:54 pm 1.2k Views
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The following blog explores the need and importance of group health insurance provided by employers. Moreover, it explores the areas covered by generic group insurance, and a list of the available group health insurance companies can choose for their employees.


Adulthood, no matter how much one dreads it, is eventually inevitable. Part of growing up is to plan for the future. Grim as it sounds, one never knows what the future holds, so it is better to be safe than sorry. If you’re new blood in the job market and are looking to learn more about the group health insurances for employees, continue reading the following article to get your queries answered. 

Statistically speaking, by the time we reach the financial year 2030, India will expect a rise in group health insurance by a whopping number of 450 million people. It is also to be noted that in the financial year of 2021, a total of 514 million Indians were part of a group health insurance plan.

Meanwhile, it is also important to mention that according to the Economic times, in 2021, about 30% of the country’s individuals lacked any sort of health insurance plan.


Group health insurance chart


What is Group Health Insurance: How Does it Work?

Group health insurances are healthcare plans offered to members of a particular group. The group members typically are under an employment contract with a company or are members of an organisation. The healthcare plans offered by your company usually cover hospital and healthcare bills of employees and their families, depending on the plan they choose. When a group health insurance plan is offered by the employer, the employees receive the plans at a reduced cost. Moreover, through group insurance, the employers reap the benefits in terms of taxes. 

In order for any group insurance to be applicable, they require at least a total of 70% in terms of group participation. The factors that affect the cost of group insurance depend on the type of insurance plan, the insurance provider, and the terms of the contract. Therefore, it is hard to generalise group insurance plans as a whole. 

Need for Group Health Insurances: Why is it Important?

Apart from the obvious reason that a health insurance plan is a practical option for any future mishap, there are several benefits of participating in group health insurance. Some of these are listed below:

Provider Insured Amount (INR) Lives Covered

Premium (INR per month)

SBI General Insurance

1 Lakh



(10 employees, 7 spouses, 3 kids)

National Insurance

1 Lakh



(10 employees, 7 spouses, 3 kids)

Magma HDI

1 Lakh



(10 employees, 7 spouses, 3 kids)
Leading Private Insurer 1 Lakh 10 employees only 159

For Employee:

●  In case of pre-existing diseases, group health insurance typically covers the employee’s medical bills from the moment they join an organisation. Therefore, there is no waiting period to ensure in terms of pre-existing diseases, like it is in individual health insurance plans.
●  Group health insurances cover a wider range of diseases as compared to individual health insurances. This may even include mental health psychological disorders. 
● Group insurances also cover a longer range of maternity-related bills. This would include a normal delivery as well as a C-section.

For Employers:

●  Providing your group health insurance for employees allows the employers to get the perk of tax benefits.
●  Employees are more likely to stay at the present company if the employers provide an attractive health coverage plan. This not only incentivizes the employees but also improves work experiences.

Eligibility Criteria

Some of the eligibility criteria in terms of group health insurances are listed below for the employers to keep in mind while choosing group health insurances for employees:

●  As per the IRDAI (Insurance Regulatory and Development Authority of India), if a particular business or company consists of more than 20 employees, they are eligible for group health insurance.
●  Companies can also opt for microinsurance plans wherein the minimum limit is 5 members.
●  Group Health Insurance can also be provided if a company has more than 20 members, these members can include family members of the employees as well. Hence, employers also provide group health insurance policies for family members.
●  Groups other than an employer-employee association who are eligible to buy group health insurance are- an association with common similarities, such as people with credit cards, part of a professional association like the employee welfare associations, depositors of a bank, etc.
●  A group cannot be formed solely for the purpose of availing a group health insurance plan. 
●  An individual can join a group’s healthcare at a limited number of established dates such as the first of every month, anniversary, at the commencement of their employment contract etc.

Available Group Health Insurances in the Market

Individuals looking to gain more knowledge on group health insurances or any other form of insurance must check out the 5paisa insurance blog to gain more info relating to the details of insurances. The available insurances are present in a wide variety of ranges, that companies or professional groups can seek out to avail good group health insurance policy for employees in India. Some of them are listed below:


In a nutshell, a stitch in time saves nine. Hence, availing or participating in a group insurance plan is a smart option when one keeps in mind the importance of planning ahead and the safety of their loved ones. Group insurances are beneficial as they provide you with a wide range of benefits as compared to individual life insurances, that too at a lower cost. Moreover, employers get to provide quality of life to their employees along with additional tax benefits. 

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