The business landscape in India has become extremely competitive. For small businesses to survive in the market, it is crucial to retain manpower. A very effective way to make employees cared for and valued is by opting for group health insurance.
By investing in good group health insurance for employees, businesses can safeguard them and build a better reputation in the market. How health insurance is beneficial, what its requirements are for small businesses and who can buy them are some of the aspects discussed below.
Requirements for Small Business Health Plan
The IRDAI has set regulations which make small business organisations, startups and other smaller business institutions eligible for a group insurance plan. However, there are certain pre-requisites that they must fulfil.
1. Minimum Employees
The minimum employee requirement for group insurance is 20. However, IRDAI group insurance guidelines allow smaller businesses with a minimum of 5 employees to opt for a GHI.
To protect and preserve their employees, they can opt for micro-insurance plans, such as the ones offered by TATA AIG. In the event of any medical emergency, the employees may receive financial compensation and assistance.
2. Group Definition
For GHI, a group can be an employer-employee or a non-employer-non-employee. No matter what kind of group it is, there must be a common interest amongst them.
For instance, a sports group or a social welfare association group. A group that does not share a common interest or goal may not be eligible to enjoy the benefits of group insurance.
3. Intention
Another crucial requirement for buying employee insurance plans is the intention. IRDAI guidelines suggest that the intention should be to protect the health of employees.
Thus, if the insurance price is negotiated even before the forming the group, it will not be a legitimate thing to do. Thus, the intention should not be to get a discounted insurance premium but the security of the employees.
4. Full -Time Employees
While issuing group insurance, many insurers require the employees to be employed full-time at an organisation. Thus, an organisation with seasonal or part-time workers may not receive the benefits of group insurance.
5. 70% Requirement
Insurers may have a condition that 70% of the employees must enroll for the group insurance for it to be activated. Thus, if less than 70% of the workers opt for it, the insurance company may refuse the coverage.
Why Do Small Businesses Require Group Health Insurance?
● Health Security for Employees
Opting for health insurance offers health security to the employees. In the event of any medical emergency, they get financial assistance, enabling them to get the best treatment. Thus, it fosters a feeling of safety and security among the employees.
● Retain the Workforce
When small businesses offer group insurance to workers, they win the employees’ trust. In such cases, the employees continue to work with the organisation for prolonged periods. Thus, the company is able to retain its talented employees.
● Build Reputation
An organisation that offers group insurance for its workers and families is able to stand out in the industry. They build a positive reputation in the market and the employees see the organisation as an entity that values the employees and looks after their well-being.
● Enhance Employee Productivity
Having a group health insurance for small business secures the workers’ health and increases their confidence in the organisation. When employees feel safe, they give their best to their job, which increases their productivity and benefits the organisation.
● Business Expansion
Small businesses that plan to expand require group insurance to offer financial security to their employees and make them feel safe. Group insurance is also an excellent employee benefit for startups to attract potential talent from the industry. Thus, by retaining the existing workforce and attracting new talented workers, businesses can consider expansion in the near future.
Summary
Small businesses that have a minimum of 5 employees can opt for group health insurance for the employees. If the company wishes it can also include the family members in the group plan to increase the number of covered employees.
Group health plans are not only beneficial to the employees, but they also offer multiple benefits to the company. From discounted premiums to tax savings and reputation, small businesses can gain great benefits from such investments.
Frequently Asked Questions
Is group insurance tax benefit applicable to the employees?
Yes, the tax benefit of a group insurance plan is available for the employees if they have contributed towards the premium of the plan.
Which group is not eligible for group insurance?
Individual entrepreneurs and family businesses that consist of family members are not eligible to opt for group insurance.
