Do You Own Business ?? - Now its mandatory to provide Health Insurance to your Employees !!




Health Insurance Now Mandatory For All Your Employees!!!

Covid-19 Pandemic has changed the world in many parameters and the most important change is the concern related to healthcare.

Recent notification from Home Ministry has mandated all the employers (small, medium and large businesses) to provide Health Insurance cover to their employees immediately after the lockdown gets over, when they resume their businesses.

Earlier, it was not mandatory, though, many big companies were providing Group Medical Cover (GMC) to their employees to retain their talent and to get tax benefits for their company.

Last week, due to Covid-19 Pandemic, new guidelines for all the businesses were issued keeping in mind the healthcare practices for their employees. A part of the Consolidated Revised Guidelines by Ministry of Home Affairs (MHA), Government Of India, delivered on 15th April 2020, states that:

All industrial and commercial establishments, workplaces, offices etc. shall put in place arrangements for the implementation of Standard Operating Procedure (SOP) before starting their functioning. As per clause no. 5 of Annexure - II of the said SOP for social distancing for offices, workplace, factories and establishments, medical insurance for the workers to be made mandatory, as per the circular.

In my 16 years of professional practice, what I have observed is that the small and medium enterprises (having employee strength of 5 to 500) and business establishments shy away from providing GMC (Group Medical Cover) to their employees. This ultimately results in many disadvantages to themselves such as:

     1.       They lose out in retaining their talent
     2.       They miss the opportunity of saving taxes on such expenses
     3.       They also carry the risk of paying from their pockets or affect the business cashflow if any health emergency arises for any of their employees

Hence, it is more of an advantage for any businessman to pay for his/her employees’ health insurance. Group Medical Cover (GMC) is not very expensive and do not need individual health check-ups or any major formalities.

As per labour law, medical insurance is available under the Employee State Insurance (ESI) Act, 1948 to those organised sector employees whose monthly wage is Rs 21,000 or less.

Normally employees covered under the ESI within an organization are not covered under the GMC policy offered by the employer. The employer generally offers a group health insurance (GMC) policy to those who earn a salary of more than Rs 21,000.

For workers employed below the pay bracket of Rs 21,000 ESI is mandatory. And with this new guideline by MHA (Ministry of Home Affairs), the medical insurance will be available for those employees who are not covered under ESI. This means, now, both the lower pay bracket employees will get ESI and those above Rs 21,000 will get a group medical cover (GMC) from the employer.

Types of Health Insurance policies an employer can offer:

Employers have the option of taking a group medical cover (GMC) policy for their employees or can assist their employees in buying a retail health policy from insurance companies.


Benefits of Group Medical Cover (GMC)

For Employees:
      1.       No need to pay the premium as the premium will be paid by his/her employer
      2.       No need to go through medical checkup to avail the policy benefits
      3.       For young lady employees, maternity expenses are also covered
      4.       All pre existing diseases are covered from day one, which is not applicable in retail plan
      5.       Employees can add their immediate family members and their parents or parents in law (either by paying extra premium from their salary or the employer can wish to cover them)

For Employers:
     1.       It’s a good HR tool to retain the employees
     2.       Tax benefits can be claimed under Section 37(1) of IT Act as the premium paid is considered as an expense.
     3.       Business owner can stay relaxed that he/she does not have to part away from his business cashflow, if any health challenge arises to any of his/her employee.

How to go ahead now:

As it is mandated from the government that employees should be covered through Health Insurance, it is better you start thinking about it and chalk out the plan.

Following steps would help you to plan better:
    1.       First prepare the list of all your employees in excel format with the following information
-          Full Name
-          Gender
-          Date of Birth
-          Marital Status
-          Department of Work (e.g., Sales, Warehouse, Manufacturing, Accounts, etc)
    2.       Also, get the following details of your employees’ family members in excel format
-          Name
-          Gender
-          Date of Birth
-          Relationship with your Employee
3.      If you wish, and if your budget permits you can think of covering your employees’ parents too. Many corporates charge separately for this cover to their employees and you too can do it. It will be a great gesture to your employees if you cover their parents too as, otherwise it is very difficult and very costly to cover elder people.

Next, once your data is ready in excel format. Approach different health insurance companies and get the quotations for the following combinations:
·            -  Only Employees
·            -  Employees and their immediate family members (spouse and children)
·            -  Employees + Immediate Family + Parents

Finalise any one of them as per your budget and the features.

Few Important Checkpoints:
        1.       Health Insurance is not about price, but, about the features. Make sure you go through the list of benefits and features of the GMC policy before finalising
        2.       Cashless claims make the life easier during health emergencies and hence it is better to check the Network Hospital list
        3.       Claim settlement process should be smooth and trouble free. Check the history of the company on claim settlement before finalizing the company.

We, at Vitamin-M, deal with 6 different Health Insurance companies. We can get you the best comparison and best possible quote.

Thanks to digital process, your location does not matter to serve you better. 
Your company can be located in any part of India, and, we will still be able to serve you with your full satisfaction.

To know more and to get 3 to 4 different quotations for your company, you can contact

Srikant Tapadiya
(Founder: Vitamin-M Wealth Clinic)
Mob: 99729 69499
Email: vitaminmfs@gmail.com

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